The Upgrade Card is a unique hybrid between a personal loan and a credit card. It boasts a predictable payment schedule, fixed interest rates, and no fees. However, it operates differently than a traditional credit card.
Read on to find out more so you can decide whether the Upgrade Card is the right choice for you.
Table of Contents
The Upgrade Card can be used much like a credit card, but it’s actually an unsecured personal line of credit. It touts itself as having “the flexibility of a credit card with the low cost and predictability of a personal loan.” However, this card works a little differently from a personal loan.
When you sign up for the Upgrade Card, you get a credit line (from $500 to $25,000) that you can use in one of two ways:
- Like a loan: You can use your card to move funds (up to your credit limit) directly into your bank account. You then regularly pay back the loan in equal monthly installments over a set period of 12–60 months at a fixed interest rate. You can transfer funds in this way multiple times with no need to reapply like you’d have to with a normal installment loan.
- Like a credit card: You can use your Upgrade Card to make purchases as you would with a normal credit card, except that you don’t repay your debts as you would with a normal credit card. Instead, each debt is treated as a loan—again, a debt with a fixed interest rate that you have to repay in equal monthly installments over 12–60 months.
Apart from predictability, the other major advantage of the Upgrade Card is that you don’t have to pay any fees—including origination fees, annual or monthly fees, late payment fees, or foreign transaction fees. The downside is that you don’t get a lot of the benefits that you get with normal credit cards (e.g., rewards, travel insurance, roadside assistance, or purchase protection).
For many borrowers, especially ones whose credit is only so-so, the Upgrade Card might be a more realistic option than traditional credit cards. Read on to find out why.
Upgrade Card Important Details
Basic Card Details
- Credit card issuer: Sutton Bank
- Card type: Visa
- Regular APR: 8.99%–29.99% (dependent on your creditworthiness)
- Annual fee: $0
- Credit limit: $500–$25,000
- Grace period: N/A
- No security deposits required
- No foreign transaction fees
- No late payment fees
- No rewards
- Repayment terms of 12–60 months
- Credit reporting to one or more major bureaus
- Cash advances and direct balance transfers are unavailable
- No authorized users can be added to the card
- No credit card benefits such as exclusive cardholder discounts or travel and shopping benefits
Upgrade Card Feature Breakdown
In this section, we’ll look at some of the most notable features of the Upgrade Card.
The Upgrade Card has none of the fees that you often get with credit cards:
- Annual fee: $0
- Monthly fee: $0
- Foreign transaction fee: None
- Late payment fee: $0
- Cash advance transaction fee: N/A
- Balance transfer fee: N/A
The Upgrade Card also doesn’t have any of the fees associated with many other types of borrowing or financial tools. It doesn’t charge:
- Application fees
- Origination fees
- Transfer fees
- Prepayment fees
- Per purchase fees
- Cash reload fees
- ATM balance inquiry fee
- Customer service fees
- Inactivity fees
Note that, although there are no late payment fees, if you make a late payment, Upgrade will suspend your account temporarily such that you can’t make any more purchases or transfers until you’re caught up.
When you use your Upgrade Card to make a purchase or transfer money, Upgrade converts the debt into a loan, which you have to repay in fixed installments over 12–60 months. The interest rate Upgrade offers you and the exact length of time you have to repay the loan will depend on your creditworthiness.
The annual rate of interest you pay for a credit card is called the APR (annual percentage rate). You’ll have to pay interest on your Upgrade Card, and the APR is between 8.99% and 29.99% (with the exact rate depending on your creditworthiness).
Unlike with many credit cards, the Upgrade Card APR isn’t variable. Once you make a “draw” (which can mean a purchase with your card or a transfer to your bank account), the interest rate that applies to that particular draw can’t usually change—although the interest rate may differ for your next draw.
According to Upgrade, their customers pay almost seven times less interest on a two-year Upgrade Card balance (a balance that will be paid down over two years) than they would by making the monthly minimum payment on a traditional credit card.
Although some credit card users can get away with paying very little or no interest (depending on their payments and the type of APR offers they get), for many borrowers, the Upgrade Card will indeed be a better option than a traditional credit card.
A grace period is a period of time between your credit card statement closing date and your payment due date—often around 21 to 25 days. If you pay your bill in full by the due date, your purchases during the grace period won’t accumulate interest. However, if you carry a balance from the previous billing cycle, charges in the grace period will accumulate interest at the normal rate.
The Upgrade Card is different from most normal credit cards in that it doesn’t have a grace period, so you’ll begin accumulating interest as soon as you use your card to make a purchase or transfer money to your bank account.
Your Upgrade Card won’t earn you any cashback rewards. If earning rewards is important to you, consider looking for a different card. Note that many credit cards for poor credit or limited credit come without rewards programs, but there are still rewards cards for bad credit holders to be found if you look hard enough.
The Upgrade Card lacks many of the benefits that come with many other Visa and Mastercard credit cards. For example, you won’t get travel insurance or purchase protection.
However, you can add your Upgrade Card to Apple Pay or Google Pay and use it at contactless terminals.
Intro Offers and Welcome Bonuses
The Upgrade Card doesn’t give any welcome bonuses or intro offers. These kinds of offers are available with many credit cards for good or excellent credit.
If you have a higher credit score, shop around to find out about the deals on offer before deciding whether to go with the Upgrade Card or something else.
Cash Advances and Balance Transfers
A cash advance is when you use your credit card to withdraw money from an ATM. A balance transfer is when you move debt from one credit card to another (and is a common method of debt consolidation). Cash advances and balance transfers aren’t allowed on the Upgrade Visa® card.
Although you can’t move debt balances onto your Upgrade Card with a direct transfer, you can use credit from your Upgrade Card to transfer money into your bank account (a bit like getting a debt consolidation loan). Once you have the funds in your bank account, you can use them to pay off the balance on your old credit card.
The Upgrade Card offers initial credit lines ranging from $500–$25,000. According to the Upgrade website, the maximum Upgrade Card limit is typically $20,000.
After you open your Upgrade account, Upgrade won’t start reporting to the credit bureaus until you use your card to make a purchase or transfer funds to a bank account. When this happens, activity on your Upgrade Card will affect your credit a bit differently from how a traditional credit card would. This is because the Upgrade Card functions as installment credit rather than revolving credit, and these two types of credit affect your credit score differently.
Note that, if you’ve used your Upgrade Card multiple times, this will generate multiple installment loans, but they will appear on your report as one account (with an aggregate monthly payment and maximum repayment period).
Although Upgrade says that it reports to credit bureaus, it doesn’t say which ones. However, one or more of your credit scores will suffer if you don’t keep up with your monthly payments, so it’s important to do this. A good credit score opens doors for even better credit cards and loans in the future.
To help you on your credit-building journey, Upgrade gives you access to an online service called “Credit Health.” This service provides various credit-building tools and information, including a summary of your credit reports and your TransUnion VantageScore 3.0 credit score.
Credit Score Requirements
Some reports online claim that the Upgrade Card is available to people with lower credit scores. Upgrade itself doesn’t confirm this publicly, but we contacted them and they told us that the Upgrade Card is meant for people who are “building or looking to improve their credit,” which means you can probably qualify even if you don’t have a very good credit score yet.
Application and Approval
Upgrade says that it takes only a few minutes to apply for an Upgrade Card online. When you apply, you’ll have to provide some basic information, and Upgrade will check you for prequalification. This check will include a soft inquiry (a type of credit check that is not visible to lenders viewing your credit report and has no impact on your credit score).
If Upgrade then makes you an offer, and you accept, you’ll have to submit your bank account information; Upgrade will also do a second soft inquiry. They’ll do a hard inquiry (which will affect your credit score) only when you finally receive a loan from them.
Managing Your Account
To make payments by phone, contact Upgrade’s Account Servicing team at (844) 899-9931.
To pay by check, make the check out to Upgrade, Inc. (and include your Loan ID Number), then mail the check to the appropriate address.
For standard mail:
P.O. Box 52210
Phoenix, AZ 85072-2210
For courier deposits (FedEx, UPS, etc.):
Attn: Batching Dept. lbx#452210
530 W Alameda Dr.
Tempe, AZ 85282
Lost or Stolen Cards
If your Upgrade Card is lost or stolen, call (877) 418-3667. If you need to replace your card, you can do so by using the Upgrade app.
Note that, if you have both virtual and physical cards, you’ll need to report only one of those cards lost or stolen. Upgrade will then cancel both of them for you immediately and issue you new cards.
If you need help with your Upgrade Card, you can email customer service at [email protected], or talk to a customer service rep by calling (844) 319-3909.
You can also send mail correspondence (except check payments) to:
275 Battery Street
San Francisco, CA 94111
Should You Get the Upgrade Card?
There are a few purposes for which the Upgrade Card makes a good alternative to an installment loan or traditional credit card. These could include:
- A big purchase or expense that you need to pay for and that you foresee will take you more than a year to pay for.
- Debts you want to consolidate while avoiding fees and lots of interest (e.g., if you’re not eligible for cards with 0% APR intro offers).
- Ongoing expenses you want to pay for without having to apply for multiple loans or carry a large, costly credit card balance.
Although the Upgrade Card is great in these kinds of scenarios, it isn’t particularly good for everyday spending. If you want a card for things like bills and shopping, and you’re able to pay your balance in full every month, you can completely skip out on paying interest with a standard credit card.
As such, for holders of good credit, the Upgrade Card won’t always be the best choice. If you have good credit, consider regular credit cards with the following features:
- 0% APR offers
- The ability to do balance transfers or cash advances
- Cashback rewards
- Welcome bonuses
- Benefits like travel insurance or purchase protection
If you have fair credit, meanwhile, and you want to pay for large purchases (e.g., expensive electronics items or sports equipment), you can consider credit cards from the stores you plan to buy from. Some store cards have deferred interest payment plans that let you pay off your purchase within a designated time frame without incurring interest charges. However, you have to be very careful with these offers; otherwise, you can end up being charged interest retrospectively if you don’t pay everything off on time.
Who Is This Card For?
- Anyone with a strict budget: If you carry a balance on a credit card, minimum required payments and interest charges can be unpredictable and tricky to budget for. The Upgrade Card has fixed installments that you repay over a fixed term, so it’s easier to plan your repayments and control your finances. However, this rigidity also means that you can’t simply pay less if there’s a month where you’re more cash-strapped.
- Borrowers who tend to abuse normal credit cards: When you make a purchase with the Upgrade Card, you have a set payoff date, and this can help you pay off debts sooner than if you were to make only minimum monthly payments on a traditional credit card. Also, with most credit cards, a missed payment incurs a fee. However, with the Upgrade Card, if you miss a payment, your card is frozen, so you can’t use it again until you’re up to date with your repayments.
- Renters who can’t get HELOCs or similar types of credit: People often use HELOCs (home equity lines of credit, which are a type of credit that’s secured by the borrower’s home as collateral) and similar loans for expenses like home improvements, study costs, emergency expenses, or even debt consolidation. If you don’t have a property to use as security, the Upgrade Card is a good alternative to these types of credit lines.
- Anyone who has a project with ongoing expenses: If you’re taking on a project that you want to pay for as you go along and that requires flexible funding (e.g, home renovations or academic studies that require expensive materials and equipment), you might not want to take out a huge loan all at once and immediately start paying interest on it. The Upgrade Card lets you spend, pay off your balance, then spend again as required—like you would with revolving credit minus the expense and unpredictability.
To determine whether the Upgrade Card is right for you, take a look at how it measures up against similar credit cards on the market.
Upgrade Card vs. Upgrade Cash Rewards Visa®
The Upgrade Cash Rewards Visa® works in the same way as the Upgrade Card. There are no fees, the APR is 8.99%–29.99% (where the exact rate depends on your creditworthiness), and it doesn’t come with most of the usual credit card benefits.
Predictably, the major difference between the Upgrade Cash Rewards Visa® and the Upgrade Card is that the former gives you cashback rewards at a rate of 1.5%. Unlike with most cashback credit cards, you don’t get rewards immediately when you use your card. Instead, you receive them when you make your monthly balance payment, with your cash back normally being added to your balance after you pay your bill at the end of the month.
As such, the Upgrade Cash Rewards Visa® enables you to pay off your debts faster than you could with a standard Upgrade Card, so it’s a better option. However, the credit scoring requirements are also presumably stricter, which means not everyone can qualify.
Upgrade Card vs. Petal® 2 Visa® Credit Card
Although the Petal® 2 Visa® credit card is more like a traditional credit card (whereas the Upgrade Card resembles a credit card/loan hybrid), the two still have notable similarities:
- No fees (including annual fees, foreign transaction fees, or account-opening fees).
- Instead of incurring late fees, your accounts are frozen if you pay late.
- No penalty APRs.
- No introductory APR offers.
- No security deposits are required.
- Cash advances aren’t offered.
However, there are also some important differences between the two cards:
- The Petal® 2 Visa® credit card gives you a grace period (a window after each billing cycle during which you can pay off your balance without incurring any interest).
- The Petal® 2 Visa® APR of 12.99%–26.99%.
- The Petal® 2 Visa® has a potentially lower initial credit limit of $300–$10,000.
- The Petal® 2 Visa® credit card gives you cashback rewards.
- The Petal® 2 Visa® credit card has standard Visa benefits (e.g., ID theft tools, a pay-per-use roadside assistance program, auto rental collision insurance).
Because of the cashback rewards, credit card benefits, and interest-free grace period, the Petal 2 Visa® Credit Card is a better choice for everyday spending and general use. However, it’s not suitable for consolidating debts (as you can’t do balance transfers), and the Upgrade Visa® card also has higher maximum credit limits, making it a much better card for debt consolidation.
Upgrade Card vs. Citi Simplicity® Card
The Citi Simplicity® card is another traditional credit card that provides revolving credit (meaning it functions like a normal credit card). This is in contrast to the Upgrade Card, which provides installment credit (like a loan). Despite their differences, both cards have no annual fees or late payment fees but no welcome bonuses or rewards programs.
However, if you’re looking to consolidate debts that you can pay off within a couple of years, the Citi Simplicity® card is better than the Upgrade Card because it gives you 0% APR on balance transfers for 21 months. If you can pay off all your debts within that timeframe, you’ll pay no interest—only a balance transfer fee ($5 or 5% of the transfer amount).
The Citi Simplicity® credit card also offers 0% APR on purchases for 12 months, so similarly, if you want to finance large purchases that you know you can pay off within a year, this is a better card to get than the Upgrade Card.
If you need longer than a year, you may be eligible for a program called the Citi Flex Plan, which is a way to pay for specific credit card purchases in fixed installments at a fixed interest rate over a predetermined period of time (although this service has fees, so it might end up more expensive than an Upgrade Card would be).
The other advantages of the Citi Simplicity® card are:
- Its payment due dates are flexible.
- You can get cash advances.
- It gives you some basic Visa benefits.
- It gives you Citi Entertainment (which gives you presale tickets, special offers, VIP packages, and more).
This means that the Citi Simplicity® card has quite a few points in its favor. However, you may need a higher credit score to qualify, and Citi also does not specify what kind of credit limits are available. As such, whether this card is a possibility for you depends on whether you’re eligible and, if so, how much credit Citi can offer you.