The Capital One Spark Cash for Business is no longer available for new applicants. For alternative cards, see our article on the best business cards.
Side hustles are a powerful way to make additional income outside of your 9-to-5 job. But with that extra cash come extra responsibilities, including income and expenses you need to keep track of. Failure to track your income and business costs can result in owing significant money come tax time.
That’s where a business credit card can help.
“When I did my taxes for 2020, I realized I was still having a lot of business expenses going through my personal credit cards,” says Jannese Torres-Rodriguez, a NextAdvisor contributor who’s also an entrepreneur and side hustle expert with several streams of income through her businesses. “Getting a business credit card made it so much easier to reconcile my purchases and not have to go through my statements and figure out what’s a personal expense versus a business expense.”
One of the cards she uses for her business expenses is the Capital One Spark Cash for Business, which has no annual fee for the first year ($95 after that) and offers unlimited 2% back for every dollar you spend on your business. It’s among our picks for the best business cards.
While the right credit card for your side hustle will depend on your goals and what you spend on, “I recommend taking a look at Capital One if you’re looking for an entry point into the business credit world,” Torres-Rodriguez says. “I don’t have the discipline to figure out what category is getting more points this quarter. I just like the straightforward approach where you’re going to get 2% back on everything.”
Why the Capital One Spark Cash for Business Makes Sense for Most Side Hustlers
The Capital One Spark Cash for Business mostly makes sense for side hustlers and freelancers who want an easy, straightforward rewards program and whose expenses don’t fit into traditional business card categories.
If you have a lot of common business expenses — like travel, office supplies, and advertising — you may find more value from a card like the Ink Business Cash® Credit Card, which offers higher cash back in those categories.
It can also help you streamline your budget and simplify your accounting, and you don’t need to have a storefront, employees, or an LLC to qualify for one. The card offers extremely detailed year-end summaries of your purchases, and you can download your records into common business accounting programs like Quicken, Quickbooks, and Excel. Those features can be especially helpful for planning ahead in your business.
“Business credit cards just make tax filing and the accounting process so much easier,” says Torres-Rodriguez. “I think it helps you not only predict what your expenses will be for the following year, but it can also give you a 30,000-foot view on what you spent too much money on and where you can make some changes,” says Torres-Rodriguez.
On top of 2% cash back for everything you purchase with the Spark Cash for Business, you’ll earn a $500 cash bonus if you spend $4,500 on purchases within the first three months from opening the account. Just make sure you spend enough to earn back the $95 annual fee—at least $4,750 each year (or $395 each month) to be exact, according to NextAdvisor’s calculations. You’ll also get a few extra benefits with the Spark Cash for Business, including roadside assistance, extended warranty, and your choice of the monthly due date.
“The rewards are coming as a result of investments I’m already making,” says Torres-Rodriguez. “And it’s free money.”
Capital One Spark Cash Plus
- Intro offer:Up to $1,000 cash bonus
- Annual fee:$150
- Regular APR:N/A
- Recommended credit:670-850 (Good to Excellent)
- Learn more At our partner’s secure site
Ink Business Cash® Credit Card
- Intro offer:$750
- Annual fee:$0
- Regular APR:13.99% – 19.99% Variable
- Recommended credit:670-850 (Good to Excellent)
- Apply Now At Chase’s secure site
How to Use the Capital One Spark Cash for Business Responsibly
Using a business credit card strategically requires a foundation of healthy credit habits like paying your balance in full and on time each month.
“Know why you’re using the credit and know that you’re using it strategically, not just because you can’t afford to pay the expenses in your business,” says Torres-Rodriguez.
With the Capital One Spark Cash for Business, you’ll want to especially avoid carrying a balance since it carries a high variable APR of 20.99%. A high-interest debt balance can quickly wipe out any rewards you earn, and you could find yourself in a financial hole that’s hard to get out of.
“You have to respect credit, whether it’s for your personal or business use. Make sure that you are not purchasing more than you can afford to pay for. Make sure your income makes sense for the amount of money you’re using on your credit line,” says Torres-Rodriguez.
Torres-Rodriguez, who has personal credit cards with five-figure credit limits, said she was surprised when she applied for the Capital One Spark Cash for Business and only got an initial credit limit of $2,500.
“If you think you’re going to get this huge credit limit because you have a great credit score, that’s not the case. You’re starting from scratch when you’re building your business credit, and you have to prove the reliability and trustworthiness of your business.”
After six months, she asked for a credit limit increase and eventually applied to another business credit card. “My limit increased over time, but I had to have patience,” she says.
It’s generally easier to get approved for a Capital One card compared to other credit cards because they tend to cater to people who are either rebuilding their credit, or starting from no credit history. To increase your chances of approval, you should have a credit score of at least 670 before applying.
But Torres-Rodriguez recommends waiting to apply until your side hustle is generating recurring income and you’re ready to take on that additional financial responsibility.
“I wouldn’t open a business credit card until I have recurring income that I know I’m going to be able to rely on to repay the bills that I’m going to be charging,” she says. “It adds a level of complexity to your overall financial picture now that you have to manage your business expenses and your personal expenses. Don’t abuse it.”
*All information about the Capital One Spark Cash Plus has been collected independently by NextAdvisor and has not been reviewed by the issuer.