Capital One Spark Cash Plus review: Is the boosted buying power worth a higher fee?

Starting a business isn’t cheap and it's not organized by bonus categories. The Capital One Spark Cash Plus is a great card for everyday business owners who don’t want to spend money on different products and services to maximize a tiered rewards system. A flat-rate card like the Spark Cash Plus can simplify your business spending without sacrificing too much in rewards value.

Rewards rate: A generous flat rate for all purchases

Your and your employees’ cards will earn unlimited 2 percent cash back on almost all your business purchases with no spending caps or bonus categories to juggle. You’ll also get 5 percent cash back when you book a hotel or rental car through Capital One Travel.

The only expenses that Capital One counts as ineligible for rewards are products you return, cash equivalent transactions and account costs like cash advances, balance transfers and checks for accessing your account.

Redemptions: Simple, flexible cash back redemptions

Few issuers simplify reward redemption like Capital One. Busy business owners can set their cash back to automatically redeem once their balance reaches a certain threshold ($25, $50, $200, $500 or $1,500) or at a selected time each calendar year. Although a direct bank account deposit is not included in the card’s redemption choices, you can receive your rewards as:

• A statement credit
• A check
• A gift card
• Checkout payments through Amazon.com and PayPal
• Travel bookings through Capital One Travel

Many cardholders can find a way to make the Spark Cash Plus work for them, but you can also convert your Spark Cash Plus cash back into Capital One Miles if you have a Capital One business travel card. Business travelers will certainly want to consider this option because Capital One Miles can be worth an average of 2 cents per mile with the right transfer partner, according to Bankrate’s latest valuations.

Credit limit: No preset spending limit

Businesses that prefer a flexible line of credit will find the Spark Cash Plus a suitable choice. As a charge card, it doesn’t have any preset spending limit. Whether your business spends $5,000 in one month or $25,000 in the next, you won’t need to worry about hitting a credit limit — as long as you pay your balance in full at the end of each billing cycle.

This doesn’t mean you have unlimited spending, however. The amount you can spend will depend on your spending behavior, habits, payment history and credit score. If you’re a responsible borrower, Capital One will work with you by giving you access to the credit limit that works for your business.

The Spark Cash Plus carries a lot of value for big spenders, but if you’re not spending at a pace that’s equal to the card’s welcome offer spending requirement, it might not be the right pick for you. This is especially true considering there are cards with the same flat rewards rate that don’t require an annual fee and lower credit score requirements.

Welcome offer: Hard to earn if you're not a big spender

Although this card carries a very valuable welcome offer, it comes with a huge spending requirement. You can earn a one-time cash bonus of $1,200 once you spend $30,000 in the first three months, which might not be much time.

Plus, the card still has a relatively low return-on-spending compared to some other business card welcome offers. Earning $1,200 for spending $30,000 is just a 4 percent return. While you’ll earn at least an additional 2 percent back via regular cash back earnings, this is a substantial spending requirement.

Other business credit cards may only ask for $10,000 within the first three months to a welcome bonus of $1,000 — a 10 percent return on spending. 

Annual fee: High fee for average rewards

This card’s annual fee is relatively high, especially considering you can find this card’s rewards rate on other options with no annual fee.

Flat-rate rewards credit cards are a great way to scoop up extra rewards on purchases that fall outside of tiered categories, but unless you spend a substantial amount each year, they earn rewards quite slowly. For instance, you won’t break even on rewards earnings with this card until you spend more than $7,500 on general purchases for your business. With the bonus category, that figure lowers to $3,000 to help offset the annual fee cost. This might not seem like a high spending requirement based on your business, but the card won't be worth it unless you spend at least this amount each year on business purchases or travel.

Even if you spend upwards of $50,000 annually, the Spark Cash Plus may not suit you well. A card like the American Express Blue Business Cash™ Card offers 2 percent back on all purchases up to $50,000 (then 1 percent back) per calendar year, and with no annual fee, the Blue Business Cash carries much better long-term value for modest spenders.

Rewards: Tiered rewards may fit your business better

The Spark Cash Plus is a good pick for the cardholder who values simplicity. However, at this credit level, you might want to think more critically about maximizing your rewards. A strong, tiered rewards card could net you more cash back or rewards without much more leg work.

For instance, the no-annual-fee Ink Business Cash® Credit Card is a tiered category rewards card that requires good credit and earns 5 percent cash back on the first $25,000 you spend in combined purchases at office supply stores and on internet, cable and phone services. It also earns 2 percent cash back on the first $25,000 in combined purchases at gas stations and restaurants. After you reach the $25,000 spending cap each account anniversary year, you’ll earn 1 percent back on all purchases.

Depending on where you spend the majority of your money, you might be able to earn more cash back with the Ink Business Cash than with the Spark Cash Plus. If you max out both 5 percent categories, the Ink Business Cash will earn $2,500 in cash back. The Spark Cash Plus would earn just $1,000 at 2 percent back.

Although the Spark Cash Plus card comes with a high $150 annual fee, it also gives you a chance to have that fee refunded (if you spend at least $150,000 each year) while enjoying a generous flat rewards rate. To realize the card’s full rewards potential, you not only need to spend a minimum of $30,000 in your first three months to earn the sign-up bonus but also a total of $150,000 per year to have the annual fee refunded.  If you’re able to reach an annual spend of $200,000, you could enjoy over $5,000 in cash back in your first year and over $4,000 afterward.

That said, even with a more modest $40,000 annual spend, you should still come out on top. If you spent $30,000 in your first three months toward a total of $40,000 per year, you'd still wind up with $1,850 in cash back in year one when you subtract for the annual fee. Even in year two, you’d still enjoy plenty of breathing room to cover the card’s annual fee based on this spend.

*Based on a $200,000 annual spending assumption.

Credit card expert and Bankrate contributor Holly D. Johnson interviewed several cardholders for their firsthand experience with the Capital One Spark Cash and how it’s helped them manage their small businesses. Several business owners chose it over rival cards due to its flexible spending limit and straightforward, but lucrative, rewards program.

“If one month I need to spend $3,000 and the next month spend $15,000, I can do it without stressing [over having] enough available credit. When I can worry about one less thing, I am a happy man.”

— Max Marvelous, money coach

“I found several [cards] that offered lucrative cash back amounts, but only up to a few thousand dollars — then you get something like 1 percent cash back or no rewards at all on your purchases. The Spark Cash Plus gives me 2 percent back on everything with no limitations. I like that simplicity.”

— Jeffrey Gabriel, co-founder of Saw.com

“I signed up specifically for the 2 percent cash back. The 2 percent cash back gives us a little boost on our profit margins, which helps us offer more competitive pricing…. We pay off our balance every month and use our rewards to help offset that balance.”

— Jeff Neal, operations manager at Critter Depot

Few business cards offer 2 percent cash back on all other purchases, and even fewer offer extensive purchasing power like the Spark Cash Plus. However, these alternative picks may be a better value if your business calls for large purchases or a lower annual fee.

The Capital One Spark Cash Plus flexes a unique edge over other business cards and charge cards by carrying one of the best flat cash back rates and sign-up bonuses on the market. Its boosted buying power and sign-up bonus are a step up from its no-annual-fee counterparts and its predecessor, the Spark Cash for Business.

However, the $150 annual fee and charge card structure may not be worth it for small business owners who want a low-cost, flat-rate cash back card or may need to carry a balance occasionally. Considering the Spark Cash Plus card’s benefits outside the above features are strikingly similar to its no-annual-fee cash back business cards, the fee may be hard to justify for some cardholders — unless your business spends enough to nab the annual fee refund. 

Few business cards offer such a high cash back rate on all purchases and streamlined rewards experience, so this card can be a remarkable stand-alone value for small business owners with big expenses.

*For Capital One products listed on this page, some of the above benefits are provided by Visa® or Mastercard® and may vary by product. See the respective Guide to Benefits for details, as terms and exclusions apply.