BACK

Hispanolistic / Getty Images

Products

Guide to Upgrade Card: A credit card and installment loan hybrid

Keep total interest costs low and payments predictable with this unique new product

Summary

The Upgrade Card is a unique new product, with a payment structure designed for a specific kind of user. If you struggle to pay back your credit card balance and could benefit from a more aggressive repayment strategy, the Upgrade Card could be a great choice for you.

The content on this page is accurate as of the posting date; however, some of our partner offers may have expired. Please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs.

The following post has been sponsored by our partner, Upgrade Card. The analysis and opinions in the story are our own and may not reflect the views of Upgrade Card. Learn more about our editorial policy

For large purchases, the debate between using a credit card or a personal loan is a big one. Credit cards offer more flexibility to make multiple purchases and pay them off over time, but personal loans have structured repayment schedules and competitive interest rates.

But what if you could combine all the best features of both payment methods? Turns out, you can. A new product called Upgrade Card is aiming to provide the flexibility of a credit card with the interest savings and fixed payments of a personal loan. Even better, it’s doing so with no fees.

How does the Upgrade Card work?

The Upgrade Card is neither a credit card nor a traditional personal loan – it is a card with a credit line that offers easy-to-use installment payment terms. Qualifying cardholders are offered a default line of credit, APR and repayment term based on creditworthiness. All of these features are available for absolutely no fees.

To get started with the Upgrade Card, you’ll first need to apply to see your available credit line and interest rate. If you are approved, you’ll be given a default APR and installment payment term. Possible terms currently include 24, 36 and 60-month repayment plans, with APRs ranging from 6.99% to 29.99%. You can be extended a credit line from $500 to $50,000.

You have two options for taking advantage of your Upgrade Card line of credit – either making purchases on your card anywhere Visa is accepted (up to your credit line) or having funds transferred to your bank account. (Note, you cannot use Upgrade Card to withdraw cash at an ATM.)

Whichever option you choose, all the purchases or transfers within a statement period will be grouped into an installment plan based on your predefined terms. You’ll have set, equal monthly payments designed to help you pay off your debt quickly and painlessly.

During your next statement period, you can continue to make purchases on your Upgrade Card up to the amount available in your credit line. At the end of any new period, purchases are lumped into a new installment plan with your current rate and terms. That means you can have more than one installment plan running at a time, as you continue to make purchases with the Upgrade Card.

To help you keep track of multiple installment payment schedules, the Upgrade Card lumps all of your monthly payments together into one amount due. All you have to do is keep track of the payment on your account and continue to meet it each month. As new installment plans are begun or old ones are fully repaid, you’ll see the payment adjust month-to-month.

Unlike a credit card, the Upgrade Card does not let you carry a balance in the traditional sense. Interest is charged on all purchases at your set rate, and installment payments are predetermined. You must make installment payments each month in full.

With this in mind, you can think of your monthly Upgrade Card payment in the same way as a credit card minimum payment. The total amount of all active installment plan payments will be billed to you each month, and you must pay it in full by the due date.

Benefits of the Upgrade Card

Because you make equal installment payments every month with the Upgrade Card, you’ll pay off your balance much faster than a traditional credit card. This is because the minimum payment on a traditional credit card is usually much smaller than those on an installment plan – and carrying a balance on a credit card can keep you in debt for a long time.

In fact, Upgrade Card estimates you can pay a $10,000 balance more than 20 years sooner and save more than $10,000 in interest by leveraging this kind of payment plan instead of making minimum payments on a credit card.

Paying a $10,000 balance with Upgrade Card vs. minimum payments on a credit card*

Upgrade card (with an 18% APR and 24-month term)Traditional credit card (with an 18% APR)
Time to pay off the balance2 years28 years
Interest paid over time$2,102.71$14,423.16

As you can see, the Upgrade Card is a great option for cardholders who want a structured payment schedule designed to get them out of debt. If you typically carry a balance on your credit cards or make just the minimum payment, the installment plan structure might be a great way to ensure a disciplined debt repayment schedule. Plus, you’ll likely save a lot of interest along the way.

Tips for using the Upgrade Card

The Upgrade Card is a unique product that provides a lot of potential value, but you can make the card work even better for you by following these tips.

Save it for large purchases

Upgrade Card is best utilized for saving interest on purchases that take a long time to pay off. Rather than using it for day-to-day purchases you can pay off immediately, use the card for your larger purchases that need financing over an extended period.

Always make payments on time and in full

Since the Upgrade Card does not allow you to carry a balance, you should ensure you have a plan in place to make your payments on time and in full. Upgrade Card will report your payment history to the credit bureaus – so being responsible will also help boost your credit score.

Prepay your balance to get out of debt faster

If you free up the funds to pay off purchases financed through the Upgrade Card, you can prepay some or all of your balance to reduce the length of your repayment term and get out of debt quicker. Plus, paying off your balance sooner, may free up your Upgrade Card credit line for your next major purchase.

Keep a close eye on your credit score

The Upgrade Card provides users with free access to credit monitoring tools and alerts. Keep an eye on your score and any suspicious activity to stay on top of your credit.

Should you get the new Upgrade Card?

The Upgrade Card is a unique new product, with a payment structure designed for a specific kind of user. If you struggle to pay back your credit card balance and could benefit from a more aggressive repayment strategy, the Upgrade Card could be a great choice for you.

Similarly, cardholders who frequently take advantage of installment payment services to finance large purchases can get a lot of value out of the Upgrade Card. Since the card comes with a competitive interest rate and line of credit, you can use it as your go-to payment method for large purchases. That way, you won’t have to apply for multiple financing plans and suffer hard pulls to your credit.

You can check your Upgrade Card credit line and APR with no impact to your credit score on the product website. There, you can ensure the terms work for you before you apply.

*1. Example of amortization period using Upgrade Card

2. Source: minimum monthly payment calculator available at https://www.bankrate.com/calculators/managing-debt/minimum-payment-calculator.aspx assuming a $10,000 starting balance, “interest + 1%” minimum and an interest rate of 18%, which is approximately equal to the national average rate for good credit (source: CardRates).

3. Interest of $2,102.71 assumes a $10,000 charge and installment payments of $504.29 for 24 months. Installment payments calculated with 18% APR and 24-month term accounting for interest accrued between the charge date and the due date 51 days later.

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

What’s up next?

In Products

How to get preapproved for a Discover card

Those in the market for a Discover card would be wise to check out prequalified offers. By entering some basic information on the Discover site, you can be presented with cards that already align with your lifestyle and maximize your chances of scoring a card suited to you.

See more stories
Credit Card Rate Report Updated: March 25th, 2020
Business
14.34%
Airline
16.33%
Cash Back
16.55%
Reward
16.49%
Student
16.51%

Questions or comments?

Contact us

Editorial corrections policies

Learn more

Join the Discussion

We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, do not disclose confidential or personal information such as bank account numbers or social security numbers. Anything you post may be disclosed, published, transmitted or reused.

The editorial content on CreditCards.com is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company’s business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.