Which Capital One Business Credit Cards do I Qualify for?

 

As a small business proprietor, it’s critical that you have funding at your disposal that you can use for your day-to-day expenses. A business credit card can help you finance crucial aspects of your operations, such as purchasing inventory and equipment for your venture, with the option to obtain what you need now and pay for it later. 

Using a credit card for your business expenses can also benefit you in numerous ways, as some cards offer you cash back rewards – which means the credit card company give you back a percentage of the money that you spend – as well as points that can be used towards airline miles, travel, hotels, and more.

 

What are Capital One Spark Business Cards?

Bank holding company Capital One is a well-established financial institution that offers credit cards, savings accounts, auto loans, and other financial services and products to consumers and businesses.

Capital One offers a number of credit cards specifically for small businesses, which offer rewards such as points for travel, airline miles, and cash back bonuses. All of the cards offer features including auto-pay, so that your balance will be deducted from your business checking account each month, fraud liability, and year-end summaries of transactions.

The six main Capital One business credit cards are:

• Spark 2% Cash Plus
• Spark 1.5% Cash Select (with no annual fee)
• Spark 1.5% Cash Select (with intro APR)
• Spark 1% Classic
• Spark 2X Miles
• Spark 1.5X Miles Select

 

Each of these cards has its own specific benefits and disadvantages, as they have different APRs, annual fees, and rewards. However, it’s important to note that not every small business owner will qualify for any of these cards. Depending on the card, there are different credit score minimums and other requirements you must meet before your application will be approved.

 

What are the Credit Score Requirements for Business Credit Cards?

Each business credit card provider, including Capital One and other companies, has their own unique set of requirements for applicants. Generally speaking, however, top-tier business credit cards require excellent or good credit scores. That means that you have a documented history of paying vendors on time, and that you have not defaulted on any loans or declared bankruptcy in recent years.

 

Does my Personal Credit Score Affect my Chances for Getting a Business Credit Card?

The answer to this question is a resounding yes. As the proprietor of a small business, credit card companies will pull your personal credit score from various agencies in order to gauge whether your application should be approved and how high your credit limit should be.

On that same note, some business credit card issuers will require you to sign a personal guarantee. That means that the company can move to seize your personal assets or collect from your personal bank account, should you stop paying your business credit card bill.

Notably, your business credit card can affect your personal credit score. If you fail to make payments or consistently make payments far past when they are due, your business credit card issuer can report that information to a consumer credit agency. 

 

Approval Odds for Business Credit Cards: What you Should Know

The rule of thumb for your chances of being approved is simple – the better your credit is, the more likely that you’ll be approved for a card. Many cards have a hard ranking system, where a credit score above a certain number is a requirement for a specific card tier.

According to the FICO credit score system, credit tiers are defined as:

• Excellent / exceptional – Credit score between 800 and 850
• Very good – Credit score between 740 and 799
• Good – Credit score between 670 and 739
• Fair – Credit score between 580 and 669
• Poor – Credit score between 300 and 579

 

Most business credit cards will require the applicant to have a credit score of “good” or higher. The better your score, the greater the chances that you’ll be approved and enjoy more favorable terms, such as a higher credit limit and lower APR.

 

I Don’t Have Perfect Credit. How do I Get Approved for a Business Credit Card?

If your credit history is limited or you have recent bankruptcies, loan defaults, or repeated late payments on your record, you will probably not qualify for top-tier business credit cards. However, that doesn’t mean that it’s impossible for you to be approved for a different type of business credit card.

A secured business credit is an option usually available to business proprietors with poor credit. This type of card sees the applicant put up a security deposit in exchange for the card, which typically comes with a lower credit limit.

Capital One’s Spark 1% Classic card is specifically geared towards applicants with less than perfect credit histories. While there is no annual APR, it does have a relatively high 28.49% variable APR. In order to be approved for this card, you need to have a “fair” credit score, which usually means above 580 to 669.

However, if possible, you should try to improve your credit score before applying for a business credit card, so you can increase the likelihood that you’ll be approved. Applying for the card with stronger credit also means that you’ll be able to access better terms, such as a higher credit limit and lower fees.

Be sure to pay your vendors and other expenses on time. Check with your vendors that they report your payments to a credit bureau – otherwise, your demonstrated history of timely payments may not be reflected in your credit score.

For any existing credit cards or lines of credit that you currently have, try your best to reduce the amount of credit you utilize on a monthly basis. Maxing out your limit each month has a negative impact on your credit score. 

It’s okay if you need to start slow and can only reduce the amount used on a monthly basis by a slight amount – over time, you can see where it makes sense to reduce costs, and move forward from there.