The no-annual-fee Upgrade Cash Rewards Visa® is not your typical credit card. In fact, it’s more of a credit card/personal loan hybrid, offering both unique benefits and some drawbacks. Let’s take a closer look at the Upgrade Cash Rewards Visa® to see if it’s the right fit for your financial needs.
TIME’s Take
The Upgrade Cash Rewards Visa® has several attractive features. With no annual fee, a 1.5% return on all expenses, and the option to deposit your credit line into a bank account, it’s an enticing choice for cash-back seekers. Additionally, the card is available to those with low credit scores. However, it’s important to note that this card may not be ideal for building credit, as it doesn’t report credit utilization to credit bureaus.
Pros & Cons
| Pros | Cons |
|---|---|
| Solid return rate for all purchases | More fees than some competitors |
| Sizable welcome bonus for opening a checking account | Cash back can’t be stockpiled |
| Possibility of higher credit limits and lower interest rates | Carrying a balance is more difficult than with other credit cards |
| Part of credit limit can be transferred to your bank account | No purchase APR grace period |
Who is the card for?
The Upgrade Cash Rewards Visa® can be an excellent choice for those with fair credit scores (between 580 and 669) who have had difficulty getting approved for other rewards credit cards. This includes individuals who are new to credit or have made credit mistakes in the past. With no annual fee and relatively lenient approval standards, it’s a simple way to earn cash back on your monthly expenses.
This card can also be beneficial for those who need extra motivation to pay their credit card bill. The Upgrade Cash Rewards Visa® has a unique payment structure that creates an installment plan to help you repay your balance in a timely manner, thus reducing interest fees. Unlike other credit cards that allow minimum payments for extended periods, this card promotes responsible spending habits.
However, if you consistently pay your bill in full each month, this card may not provide as much value compared to other rewards credit cards that offer higher return rates and more valuable ongoing benefits.
Rewards
When you open the Upgrade Cash Rewards Visa®, you have the opportunity to earn bonus miles by opening a Rewards Checking Plus account and making three debit card transactions. This is a decent bonus for a no-annual-fee credit card.
The rewards program of the Upgrade Cash Rewards Visa® is unique in two ways. Firstly, it offers a straightforward 1.5% return on your expenses. However, you’ll only receive the cash back when you pay off your purchases, not when you make them. In other words, rewards are earned upon repayment. Additionally, the cash back you earn is automatically applied to your credit card balance each month. You can’t accumulate and save your rewards for specific occasions or emergencies.
The fine print
The Upgrade Cash Rewards Visa® does not charge an annual fee; however, there are fees for balance transfers, foreign transactions, and transfers of funds to your bank account. The regular APR for this card varies based on your creditworthiness. Upgrade emphasizes that their product is structured to ensure you pay less than with a regular credit card, as they require timely repayment.
Upon approval, you will receive a credit line of up to $50,000, with the majority of cardholders receiving less than $25,000. You will also be given loan terms ranging from 12 to 60 months. At the end of each month, Upgrade will create an installment plan with a fixed APR to assist you in paying off your credit card balance. The card’s payment structure encourages you to make substantial monthly payments, thus helping you avoid accumulating debt.
One downside to consider is that the Upgrade Cash Rewards Visa® does not provide a purchase APR grace period. Unlike other credit cards that offer a grace period of 20 to 25 days, this card starts accruing interest immediately after a purchase is charged. This means you can never pay off your balance in full and avoid interest charges on purchases.
Features
The Upgrade Cash Rewards Visa® advertises potentially high credit limits and low interest rates. While your exact terms will depend on your credit profile, this card has the potential to outperform competitors in these two areas. For example, a rewards credit card with interest rates as low as 14.99% is rare, especially for those with fair credit scores.
Additionally, this card allows you to easily transfer part of your credit limit to your bank account, similar to a cash advance but without the associated fees. This feature can be useful if you need cash for upcoming expenses or if you want to pay off other credit cards with higher interest rates.
What could be improved
One limitation of the Upgrade Cash Rewards Visa® is that it doesn’t report your credit utilization to credit bureaus. Since credit utilization accounts for a significant portion of your credit score, maintaining low balances on this card won’t have a positive impact on your credit history. However, the card does report your timely payments, which is the most crucial factor in determining your credit score.
Additionally, you cannot use the Upgrade Cash Rewards Visa® at ATMs, which is a feature offered by most other credit cards for a fee. Although you can easily transfer funds to your bank account to access cash, having a debit card on hand for emergencies or immediate cash needs is still necessary.
Card alternatives
| SPECIAL OFFER: Unlimited Matched Cash Back. Offer ending soon. | |
Bottom line
The Upgrade Cash Rewards Visa® takes a unique approach to its cardholders, acting almost like a responsible parental figure. It prevents you from accumulating debt by setting up a payment strategy that helps you pay off your balance quickly. Whether you view this payment structure as a pro or a con depends on your perspective.
If you’re looking for a credit card that encourages responsible financial behavior and offers attractive rewards, the Upgrade Cash Rewards Visa® could be worth considering. However, if you prefer more flexibility and higher return rates, there are other rewards credit cards that may better suit your needs.
For more information about personal finances and credit cards, visit Personal Finances Blog.