Capital One Financial Corp. is preparing to relaunch its small-business credit card under the new Spark Business brand, while adding enhancements to existing products and incentives for new customers, PaymentsSource has learned.
The move appears to be designed to lock in the card issuer’s best customers with a more robust marketing program, while intensifying its focus on winning new cardholders as competition in the small-business credit card category heats up, one analyst says.
“We are seeing this across the board, as major issuers retool and revamp credit card products to try to get an edge, and small-business cards are no different...we’re going to see a lot more focus on this area in the near future,” Beth Robertson, director of payments research at Javelin Strategy & Research, tells PaymentsSource.
Capital One’s new Spark Business small-business credit card brand consists of six card products altogether, including its new flagship Spark Cash and Spark Miles products, which replace its existing small-business credit cards offering cash-back and miles rewards.
The rewards-earning rate for those two cards will remain the same under the new brand umbrella, a Cap One spokesperson tells PaymentsSource via email.
The McLean, Va.-based issuer also has four other small-business credit cards under the Spark brand, including “a low-rate option and choices for small business owners with average or limited credit histories that allow the opportunity to build business credit,” the spokesperson says.
Cap One also has introduced changes to other products in its small-business suite. The former Business Platinum product, now Spark Classic, offers a similar interest rate with no annual fee, but now it comes with a rewards program offering 1% cash-back on purchases, the spokesperson adds.
The two core products in the portfolio include Spark Cash, offering small-business owners cash back on all purchases, and Spark Miles, which rewards small-business owners with miles they can redeem for travel benefits.
Spark Cash offers cardholders 2% cash back on all purchases in every category every day, which Cap One says surpasses competitors’ offerings. New Spark Cash customers are also eligible to receive a one-time $150 bonus for $1,000 in purchases during the account’s first three months, and a one-time $50 bonus for adding one or more additional authorized users to the account within its first 60 days.
Spark Miles offers double miles every day, as well as a one-time 10,000 mile bonus for spending $1,000 within the account’s first three months, and a one-time 5,000-mile bonus for signing up one or more authorized users on the account within 60 days.
Additional employee cards are free and allow business owners to set spending limits and track employee spending.
Cap One in August unveiled a new consumer credit card product with a similar earning scheme, the Capital One Cash Card, enabling cardholders to earn a total of 1.5% cash back on purchases in any category, with no annual fee and no maximum limit on rewards; the card requires customers to wait a year after enrolling to capture an additional 50% of total cash rewards earned on the previous year’s spending (
While it is not surprising that Cap One is revamping its small-business card program, Robertson says the issuer will probably tread carefully in extending credit to prospects with shaky credit history.
“Issuers are eager to pursue strong customers and capture whatever growth they can find in the credit card market, but despite shaping some products for less creditworthy customers, they are still unlikely to take on a lot of risky prospects in this economy,” she says.
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