Upgrade Card Reviews 2023

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The best credit cards tend to charge high interest rates, so using a credit card can be costly when you don’t pay your balances off on time and in full. If you’ve been struggling to keep up with accruing interest, fintech company Upgrade offers an assortment of hybrid credit card and loan products that can simplify repayment and help keep interest charges in check.

These Upgrade cards also offer unique and (in some cases) compelling cash-back rewards, but they aren’t a good fit for everyone. Here are five things you should know about Upgrade cards before you apply.

We’re focused here on the rewards and perks that come with each card. These cards won’t be worth it if you’re paying interest or late fees. When using a credit card, it’s important to pay your balance in full each month, make payments on time, and only spend what you can afford to pay.

1. You can choose from 5 Upgrade cards with unique rewards structures

Upgrade offers a variety of Upgrade cards with a lot of shared features. All Upgrade cards offer similar credit lines and interest rates, and have no annual fees, no late fees, and no foreign transaction fees. Upgrade cards are all eligible for a $200 bonus when you open and fund a Rewards Checking account and make three qualifying debit card transactions within 60 days of card account opening. Finally, all Upgrade cards run on the Visa network with contactless payment, and most offer basic Visa Signature benefits like extended warranty and price protection.

What sets each Upgrade card apart is the rewards you earn, which are applied to your balance after you make your scheduled monthly payment:

• Upgrade Cash Rewards Visa®
  : Earn unlimited 1.5% cash back on purchases
• Upgrade Life Rewards Visa®
  : Earn unlimited 3% back on gas, groceries (excluding Target and Walmart), health purchases, streaming/monthly services and telecom services. The “health” category covers a lot of ground, including drug stores and pharmacies, gyms, medical services and much more. Purchases outside these categories earn 1% cash back.
• Upgrade OneCard
  : Earn unlimited 3% cash back on “everyday” purchases, including drugstores, restaurants, gas stations, telecom services, select utilities, and more. Earn 2% cash back for all other OneCard purchases. To qualify for the bonus cash-back rates, you must activate the Pay Now feature and link to an active Upgrade Rewards Checking account.
• Upgrade Triple Cash Rewards Visa®: Earn unlimited 3% cash back on a wide range of home, auto, and health purchases, including retailers like Home Depot, Lowe’s, Ikea, Discount Tire, and Walgreens. Earn 1% back on other purchases.
  
• Upgrade Card
  : No rewards (outside of the welcome bonus offer)

The cards above are also eligible to earn up to 10% cash back with participating merchants via Upgrade Shopping offers (similar to other cash-back deals like Chase Offers and Amex Offers**). 

2. Upgrade cards work like a credit card, but get paid back like a loan

When your credit card statement closes, the best practice is to pay your balance in full. However, you can instead pay the minimum amount due or any amount in between; the unpaid balance carries over to the following statement and accrues interest charges.

Upgrade cards work differently. You can still opt to pay your balance in full, but any unpaid amount is automatically converted to an installment loan with a fixed interest rate and repayment period. Like a loan, the amount you pay each month on your Upgrade card is preset. But like a credit card, you only accrue interest on the portion of your Upgrade card credit line that gets used. The rest of your credit line remains available for future purchases.

In essence, Upgrade cards give you the utility of a credit card with the more rigid repayment structure of a personal loan. The lack of flexibility can be problematic for those with unsteady finances, but it’s also less expensive if you stay on schedule.

3. Upgrade can reduce the amount you pay in interest

Credit cards typically have a minimum payment of 1% to 3% of your statement balance. Paying the minimum amount due may seem appealing if you’re strapped for cash, but the less you pay each month, the more you’ll get charged in interest over the course of your loan, and the longer you’ll take to pay it off. Upgrade cards help you avoid that pitfall by compressing the repayment period and requiring a higher monthly payment.

For example, consider a $5,000 balance on a credit card with an average interest rate of 20.4%. If you made monthly payments of $100, it would take you just over nine years to pay off the debt, and you’d rack up around $5,900 in interest charges alone (more than the original debt). If you put that same balance on your Upgrade card with a comparable interest rate and a 60-month repayment period (the longest available), you’d pay $134 each month and end up with around $2,800 in interest charges.

Paying thousands of dollars in interest isn’t ideal in either case, but in this example, the Upgrade card’s repayment plan saves you around $3,000. Of course, you could pay more than the minimum amount due on the credit card and end up with similar (or better) results, but Upgrade cards simplify the process by compelling you to pay down your debt more quickly.

4. Upgrade lets you select a repayment plan

When your Upgrade card statement closes, you can choose from three different repayment plans: 24, 36, or 60 months. Selecting a shorter repayment period reduces the total interest you’ll pay over the course of the loan, but it raises your monthly payment.

Revisiting the previous example, a $5,000 balance paying 20.4% interest would incur $1,017, $1,593, or $2,832 in interest charges for repayment plans of 24, 36, or 60 months, respectively. The monthly payment for those plans would be $256, $187, or $134, respectively. While paying less interest is an obvious benefit, Upgrade cards give you some flexibility to pick whichever repayment plan best suits your finances.

Adding to that flexibility, you can pay off some or all of your remaining balance at any point with no extra fee or penalty for prepayment, so you aren’t beholden to the repayment plan once you start it.

5. Upgrade Card offers pre-approval

Most credit card applications add a hard inquiry to your credit report, which negatively impacts your credit score in the short term. To avoid those negative effects, Upgrade provides a pre-approval that allows you to check whether you qualify for an Upgrade card, and what sort of credit line and interest rate you’re likely to receive. 

This pre-approval process uses a soft inquiry, which has no effect on your credit. If you’re pre-approved, you can proceed to apply for an Upgrade card, which then results in a hard inquiry.

Upgrade Card Reviews: Benefits and Perks

Upgrade Card Frequently Asked Questions (FAQ)

 

 

Peter Rothbart

Freelance Writer

Angela Fung

Marketing Compliance Manager