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Capital One recently rolled out a new card for business owners, the Capital One Spark Cash Plus, shaking up its roster of previously offered credit cards for business.
The Capital One Spark Cash Plus has replaced the older Capital One Spark Cash Card, which offered business owners 2 percent cash back on all purchases. The Capital One Spark Cash Plus offers the same 2 percent back on all purchases, and the fact that it’s a charge card means there’s no preset spending limit. Plus, big spenders will benefit from the yearly spending bonus and a two-tiered sign-up bonus.
However, the Capital One Spark Cash Plus does charge a $150 annual fee, which is rather high for a business credit card with hardly any cardholder perks.
So, is the $150 annual fee worth it? We’ll go over all the details to help you decide whether the card would be worth it for you.
Capital One Spark Cash Plus details
- Welcome bonus: earn up to a $1,000 cash bonus — $500 when you spend $5,000 in the first three months and an additional $500 when you spend $50,000 in the first six months
- Rewards rate: Unlimited 2 percent cash back on all purchases and 5 percent cash back on hotels and rental cars booked through Capital One Travel
- Annual bonus: Earn an annual cash bonus of $200 every year you spend $200,000 or more on purchases
- Annual fee: $150
- Regular APR: N/A (It’s a charge card, which requires you to pay your balance in full each month)
Is the Capital One Spark Cash Plus worth the annual fee?
Generally speaking, the Capital One Spark Cash Plus is for big business spenders who have more than $50,000 in business purchases to charge each year. This is because it’s a charge card and the sign-up bonus is tailored to business owners who can spend at least $50,000 on purchases within the first six months.
But is the $150 annual fee worth it? There’s no concrete answer, but you should probably take the time to compare it to a similar business credit card from Capital One, like the Capital One Spark Cash Select — $500 Cash Bonus. This card doesn’t charge an annual fee, but it offers a lower rewards rate of 1.5 percent back on all purchases. New cardholders can also earn a welcome bonus of $500 after they spend $4,500 on purchases within three months of account opening.
Capital One Spark Cash Plus vs. Capital One Spark Cash Select spending example
If you’re trying to decide whether the Capital One Spark Cash Plus is worth the $150 annual fee, it may be helpful to consider a spending example.
Imagine your business has a lot of expenses each month for payroll, inventory and normal operations. As a result, you charge $20,000 in purchases per month ($240,000 per year) to your card. So, for the first year, you’d earn a total of $5,820 in rewards, which breaks down as:
- Cash back: $4,800
- Welcome bonus: up to $1,000 ( $500 once you spend $5,000 in the first 3 months, and $500 once you spend $50,000 in the first 6 months of account opening)
- Annual bonus: $200 (surpassed the $200,000 annual spending threshold)
Subtract the $150 annual fee for the card and you’d still net $5,670 in the first year. No matter how you look at it, that’s a generous number of rewards.
Now imagine you charge the same amount to the Capital One Spark Cash Select, which has no annual fee and earns 1.5 percent in cash back. With this card, your first-year rewards would total $4,100, which breaks down as:
- Cash back: $3,600
- Welcome bonus: $500 (spend $5,000 within the first three months)
In this case, you avoid the $150 annual fee, but you net $1,570 less in rewards along the way. We found that the “sweet spot” for choosing between these two cards is $30,000 in annual spending per year. If you spend that much on the Capital One Spark Cash Plus, you will earn $1,100 in rewards:
- Cash back: $600
- Welcome bonus: $500 (when you spend $5,000 in the first three months)
Deduct the $150 annual fee and you’ll still receive $950 in cash back.
Spending $30,000 in a year on the Capital One Spark Cash Select, you would earn the same $950 in rewards:
- Cash back: $450
- Welcome bonus: $500 (when you spend $4,500 within the first three months)
In that case, business owners who spend around $30,000 per year should opt for the Capital One Spark Cash Select. However, even though $30,000 is the magic number for the two cards to match rewards earned in a year, cardholders angling for the Capital One Spark Cash Plus should spend around $16,667 each month to best maximize the card. Doing so you can earn the $200 annual cash bonus, one of the best ways to overcome the card’s $150 annual fee.
Other business credit cards to consider
Forking over $150 per year to earn 2 percent cash back seems like a lot to ask if you don’t spend a ton of money on your card each year, and that’s especially true when you consider the fact that other business credit cards offer a similar rate with no annual fee.
American Express Blue Business Cash Card
The American Express Blue Business Cash™ Card has no annual fee and offers 2 percent cash back on the first $50,000 you spend each year (then 1 percent back). Plus, the card offers a $250 statement credit when you spend $3,000 on purchases within three months of account opening.
Ink Business Unlimited Credit Card
Another option is Chase’s Ink Business Unlimited® Credit Card. This card has no annual fee, and it offers a flat 1.5 percent cash back on all purchases. Plus, cardholders can earn $900 in bonus cash after spending $6,000 on purchases within three months of account opening.
Capital One Spark Miles for Business
This is Capital One’s business credit card geared toward individuals who travel, and the $95 annual fee is waived the first year. With the Capital One Spark Miles for Business, cardholders earn 2X miles for each dollar they spend, and they can earn 50,000 bonus miles after spending $4,500 within three months of account opening. This card also comes with up to a $100 credit for Global Entry or TSA PreCheck, and you can redeem miles for travel expenses or transfer them to a Capital One airline or hotel partner.
The bottom line
Is the Capital One Spark Cash Plus worth its $150 annual fee? That depends on how much you spend on your card each year. If the answer is around $200,000 or more, you will probably have an easier time maximizing your reward with this card.
However, business owners who spend less than $30,000 per year would probably be better off with the Capital One Spark Cash Select — $500 Cash Bonus, or another Capital One card or business credit card altogether. Whatever you do, make sure you compare all your business credit cards options before you decide.