The upgrade card isn't exactly a credit card or a personal loan. In effect, the Upgrade Card works most like a personal loan or personal line of credit that a bank would offer, just in the form of a card. Due to this unique structure, the Upgrade Card is in a class of its own.
For many, the Upgrade Card won't be what they're looking for in a credit card. However, for people who need to pay off a balance and who have great to excellent credit at the same time, the Upgrade Card can provide a few unique advantages.
The Upgrade Card is best as a debt pay-down card but only if you have a very high credit score in addition to a high balance, under $20,000, on one or more other credit cards. The upgrade card could also be a good option if you have trouble managing the spending power you get with a credit card as this card has no annual or late payment fees. It does, however, include very high "installment loan" payments.
For anyone looking for a credit card that offers high limits, a good chance to raise your credit score quickly, or any type of rewards based on spending, the Upgrade Card is not for you. The only other draw to the Upgrade Card is that it allows you to take your credit line and deposit available credit into your bank account as cash with no additional fees. While you will still draw a considerable amount of interest on this transaction, it's a much less expensive way to gain cash compared to a more traditional cash advance.
APR with the Upgrade Card can be tricky. This is because although the Upgrade Card does offer a range of APR options with a very low rate of just 6.99%, this rate and anything close to it is reserved for people with the best credit scores. The lowest interest rate has also been slowly creeping up since the card's release.
For anyone with an average score or less, in this case anything 700 or below, it's likely that the APR you will receive is closer to the national average at about 18.99%. APR with the Upgrade Card can be as high as 29.99% which is very high as a standard APR for purchases. There is no penalty rate or special rate for balance transfers or cash advances.
The minimum credit line for all cardmembers is $500. The stated maximum credit limit is $20,000. This means that if you are approved you will receive a credit line at or over $500 but you will never be able to increase that credit line to more than $20,000.
With a traditional credit card, you get a month to make purchases, and then you have around 25 days until your bill is due. The time between the end of a purchase period and the beginning of the next billing cycle is a “grace period”. During this time, you won't accrue any interest as long as you pay off your balance before your bill is due.
With the Upgrade Card, things work differently. As soon as you make a purchase, transfer a balance, or transfer cash, you will begin to draw interest on that transaction. This means that even if you pay off your bill in full every single month, you will still pay some interest every single month.
- Annual Fee – There is no annual fee with the Upgrade Card.
- Cash Advance Fee – There is no cash advance fee for the Upgrade Card. However, it's important to note that the “cash advance”-like features of the Upgrade Card work differently than you may be used to. You cannot use the Upgrade Card at an ATM and interest on all cash withdrawals begins immediately with no grace period.
- Foreign Transaction Fee – There is no foreign transaction fee for purchases made with the Upgrade Card.
- Late Payment Fee – There is no late payment fee with the Upgrade Card.
- Return Payment Fee - There is no return payment fee with the Upgrade Card.
- Authorized User Fees – There are no authorized user fees with the Upgrade Card. There are, however, no authorized users allowed to be added to each upgrade card account.
- Balance Transfer Fee – There is no balance transfer fee with the Upgrade Card.
There are no rewards offered with the Upgrade Card at the time of this writing. However, in the future, the bank issuing the Upgrade Card has stated that they would like to implement a rewards program. Keeping with the theme of preventing credit card debt from snowballing, any rewards program implemented would be a small flat cash back rate for payments made to an account. No rewards will be added for purchases.
Pros – Advantages of the Upgrade Card Credit Card
- No Fees – The best part about the Upgrade Card is its complete lack of additional fees.
- Unique Personal Loan/Credit Card Combination – It's easy to get cash with no fees with the Upgrade Card.
- Potential for Low APR – With the highest credit scores, it's possible to get an APR much lower than the national average.
Cons – Disadvantages of the Upgrade Card Credit Card
- No Grace Period – Interest begins to accrue right away on all transactions.
- High Monthly Payments – Ideally you won't have to have a balance on your credit card. If you do, however, the Upgrade Card will create a payment plan that works like an installment loan. These loans must be paid off by a set endpoint.
- No Rewards – At present, there is no reward system offered with the Upgrade Card.
The Upgrade Card is unique in how it works, including features and limitations. Overall, however, this uniqueness isn't an advantage for most credit card users. The Upgrade Card may force you to pay more as a minimum each month, but there are no penalties if you choose to skip a payment outside of additional interest accruing. Further, interest will begin to accrue the day of or the day after you make any sort of transaction with no grace period. If you have good credit card habits, this will often lead to you paying much more interest than you would with a traditional credit card.
The APR can be very low if you have a very high credit score. For most people, however, the APR won't be anything out of the norm. Though there are no fees, most people with average credit scores and good credit card habits can find other cards that offer much more in the way of rewards, credit limits, and low APR than the Upgrade Card.