How LendingTree Rates Credit Cards?
Our experts rate credit cards based on several factors including card benefits, bonus offers and independent research. Credit card issuers do not influence or have a say in our card ratings. Read our credit card methodology here.The Upgrade Cash Rewards Visa® is a good card if you’re trying to build your credit score and need a low-cost way to finance purchases. At the end of the month, your purchases are put into a fixed monthly payment plan with a set end date.
This type of repayment plan helps keep your finances organized and may help you avoid getting stuck in debt, which happens when cardholders only make minimum payments. One drawback to note is that there’s no grace period on new purchases. However, if you qualify for a lower APR, this card may allow you to finance large purchases.
It has some notable features to look for in a card for building credit: It accepts applicants with fair credit, has a $0 annual fee and a potentially low APR and earns cash back rewards.
With regular use of the card and on-time payments, this card helps build your credit so you can access other financial products that require good to excellent credit.
Intro Purchase APR
N/A
Regular Purchase APR
14.99% - 29.99% APR
Intro BT APR
N/A
Regular BT APR
14.99% - 29.99% APR
Annual Fee
$0
Cash Advance Fee
N/A
Foreign Transaction Fee
Up to 3%
Balance Transfer Fee
Up to 5%
Earns cash back rewards at a high rate
With the Upgrade Cash Rewards Visa® you earn 1.5% unlimited cash back on card purchases every time you make a payment. This is a good rate among flat-rate cash back credit cards, but even better when compared to other credit-building cards that don’t offer rewards.
You’ll also qualify to earn a sign-up bonus for opening a checking account with Upgrade. You’ll get a $200 bonus after opening a Rewards Checking Plus account and making 3 debit card transactions*.
It’s rare for a card targeted to people with low credit scores to offer any kind of sign-up bonus, so this is an outstanding offer that can help compensate for the cost of using the card in the first year.
Few fees
The Upgrade Cash Rewards Visa® has a $0 annual fee and does not charge late fees. This is a significant amount of savings if you frequently make late payments. Late payment fees typically cost $30 for the first late payment and $41 thereafter. This offers savings of up to $492 per year, depending on how often you make late payments.
Annual fees are more easily avoided if the card you want doesn’t have one. However, a number of credit cards for building credit have annual fees which range from $35 to $100.
Fixed monthly payments
Although it’s a credit card, your payments resemble those of an installment loan. At the end of the billing cycle, your purchases are put into a monthly payment plan with a fixed payment amount. Because of this, you know exactly how much is due every month and can budget accordingly.
This can help keep you from going into credit card debt because you are forced to make larger payments than you would if you were paying the minimum payment on a traditional credit card.
Potentially low APR
If your credit score enables you to qualify for the lowest interest rate, your interest charges will be roughly 50% lower than if you have to pay the higher rate. The Upgrade Cash Rewards Visa® has a 14.99% - 29.99% APR and the rate you receive depends on your creditworthiness. Currently the average APR in the United States is 24.71%, which makes the Upgrade Cash Rewards Visa®’s lower tier rate attractive.
Builds credit in several ways
The Upgrade Cash Rewards Visa® helps you build credit in a few ways:
No grace period for interest
Traditional credit cards have a grace period, meaning interest isn’t charged if you pay your balance in full by the payment due date. But with the Upgrade Cash Rewards Visa® there is no grace period and interest is calculated from the day of purchase. This means you cannot avoid paying interest with this card, which is a serious drawback if you tend to pay your balance in full each month.
Considering that the card’s APR ranges between 14.99% - 29.99% APR, the interest that you pay for using the card is likely to wipe out most or all of the cash back that you earn. If you need a payment plan to stay on track of paying off your credit card, the Upgrade Cash Rewards Visa® may still be worth it. But, if you’re likely to pay off your card each month, you should consider a credit card with a grace period, like the Petal® 2 Cash Back, No Fees Visa® Credit Card.
Offers less payment flexibility
With the Upgrade Cash Rewards Visa®, you have to pay your balance in set installments. Each month your charges are bundled together and your total payment amount is divided by a set number of months, much like an auto loan. You need to pay this amount every month to stay current. In comparison, a traditional credit card only requires a minimum payment, which could be helpful if you’re having a particularly bad month financially and can’t afford to pay more.
Autopay may be required
According to the terms and conditions, those who qualify for the lowest APR rate are required to enroll in autopay. This isn’t necessarily bad — it helps ensure your payment is made on time every month. However, you must be mindful that you have sufficient funds to not accidentally overdraw your bank account.
Credit Cards | Our Ratings | Annual Fee | Rewards Rate | Recommended Credit Credit scores ranges may vary. Your individual chance at approval may vary due to factors such as creditors using a particular variation at their discretion | |
---|---|---|---|---|---|
Upgrade Cash Rewards Visa®
Apply Now
on Upgrade's secure site Rates & Fees |
$0 | 1.5% unlimited cash back on card purchases every time you make a payment | Fair |
Apply Now
on Upgrade's secure site Rates & Fees |
|
OpenSky® Secured Visa® Credit Card
Apply Now
on Capital Bank, N.A.'s secure site |
$35 | Earn up to 10% cash back* on everyday purchases | Poor |
Apply Now
on Capital Bank, N.A.'s secure site |
|
Petal® 2 Cash Back, No Fees Visa® Credit Card*
|
$0 | Earn 1% cash back on eligible purchases right away, and 2% to 10% cash back at select merchants | N/A | ||
Capital One Platinum Credit Card
Apply Now
on Capital One's secure site Rates & Fees |
$0 | Non-rewards Card | Limited / Fair |
Apply Now
on Capital One's secure site Rates & Fees |
The OpenSky® Secured Visa® Credit Card offers credit line increases (with accompanying deposit), the chance to graduate to an unsecured card and reports your account acidity to all three credit bureaus.
Every purchase earns cash back and while the 27.99% - 31.49% APR skews higher on the spectrum for some customers, you won’t pay any interest if you pay your balance in full on or before the payment due date. This makes it a better option for someone likely to pay their balance in full each month.
With qualifying on-time payments, you can earn credit line increases in as little as six months. Also notable with the Petal 2 Credit Card is that you earn cash back on every purchase with additional cash back at select merchants.
The Capital One Platinum Credit Card does have a high 29.99% (Variable) APR. But, it also has a grace period for interest, so you won’t have to worry about interest charges as long as you pay your balance by the due date. Additionally, the card doesn’t include a rewards program. While you won’t get cash back from your purchases, you won’t be tempted to overspend because of it.
With potentially high credit lines and lower-than-average interest rates, the Upgrade Cash Rewards Visa® offers a solid way to avoid getting deep into credit card debt and diversify your credit mix while building credit. The rewards help offset the interest, and if you’re able to pay more than your monthly payment, you can do so without penalty.
It’s not a card for everyone, especially those who pay their balance in full each month. The OpenSky® Secured Visa® Credit Card or Petal 2 Credit Card are alternative cards to consider if you want to build credit without paying interest.
Alternatively, if you’re interested in a balance transfer credit card but have bad credit, a personal loan is an option to look into.
For Capital One products listed on this page, some of the above benefits are provided by third parties such as Visa® or Mastercard® and may vary by product. See the respective Guide to Benefits for details, as certain terms, conditions, and exclusions apply.
The information related to the Petal® 2 Cash Back, No Fees Visa® Credit Card has been collected by LendingTree and has not been reviewed or provided by the issuer of this card prior to publication. Terms apply.
The content above is not provided by any issuer. Any opinions expressed are those of LendingTree alone and have not been reviewed, approved, or otherwise endorsed by any issuer. The offers and/or promotions mentioned above may have changed, expired, or are no longer available. Check the issuer's website for more details.