For large purchases, the debate between using a credit card or using a personal loan is big. 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? It turns out you can. The Upgrade Cash Rewards Visa® is designed to provide credit card flexibility with interest savings and fixed personal loan payments. The icing on the cake: This will give you 1.5 percent cash back on every purchase when you pay.
How does the upgrade map work?
The Upgrade Card is neither a credit card nor a traditional personal loan – it is a card with a line of credit that offers easy-to-use installment payment terms. Eligible cardholders are offered a default line of credit, an annual interest rate and a repayment period based on their creditworthiness. You’ll also get unlimited 1.5% cash back with every purchase, and there’s even a $200 signup bonus if you open a Rewards Checking account and spend three times on your debit card. All these features are available absolutely free.
To get started with the upgrade card, you first need to apply to see the available line of credit and interest rate. If you are approved, you will be given a default annual interest rate and an installment payment term. Currently available terms include 24-, 36- and 60-month repayment plans with annual interest rates ranging from 14.99 to 29.99 percent. This lowest annual percentage is decent given the current trend in credit card interest rates.
How does your line of credit work?
Your line of credit can start from $500 to $50,000. You have two options for using your Upgrade Card credit line – either make purchases with your card wherever Visa is accepted (before your line of credit) or transfer funds to your bank account for free. (Please note that you cannot use the upgrade card to withdraw cash from an ATM.)
Whichever option you choose, all purchases or transfers during the reporting period will be grouped into installments based on the terms you pre-determined. You will set equal payments every month to help you pay off your debt quickly and painlessly.
Unlike a regular unsecured credit card, the Upgrade Card does not allow you to keep a balance and does not charge interest if you remain in debt. Instead, the card charges interest on all purchases at a rate you set, with installment payments predetermined. You must make installment payments each month in full.
During the next billing period, you can continue to make purchases with your upgrade card up to the amount available on your line of credit. At the end of any new period, purchases are combined into a new installment plan with your current rate and terms. This means you can have multiple installment plans at the same time as you continue to shop with the upgrade card.
To help you keep track of multiple installment payment schedules, the Upgrade Card combines all of your monthly payments into one payable amount. All you have to do is keep track of the payment in your account and keep making it every month. As new installment plans start or old installments are fully paid off, you will see the payment adjust from month to month.
Simply put, you can think of your monthly renewal card payment the same way you would think of the minimum payment on a traditional card. You will be billed each month for the total amount of all active installment payments and must be paid in full by the due date.
Benefits of the upgrade card
Because you make equal monthly installments with the Upgrade Card, you’ll pay off your balance much faster than with a traditional credit card. This is because the minimum payment on a traditional credit card is usually much less than an installment plan, and having a credit card balance can keep you in debt for a long time.
In fact, the Upgrade Card estimates that you can pay your $10,000 balance more than 20 years early and save more than $10,000 in interest using this kind of payment plan instead of making the minimum payments on credit card.
A comparison of how much interest you will pay and how long you will be in debt using a renewal card versus a regular credit card is detailed in the following table:
| Upgrade Card (with 18% per annum and 24 months validity) | Traditional credit card (from 18% per annum) | |
|---|---|---|
| Time to pay off the balance | 2 years | 28 years |
| Total interest paid | $2102.71 | $14,423.16 |
Plus, you’ll earn 1.5 percent on all your purchases. Note. Cashback will be credited as monthly payments are made. Once the cashback has been sent, it can be used to pay for the upgrade card even faster.
Tips for Using the Update Card
The upgrade card is a unique product with great potential value, but you can make the card work even better for you by following these tips:
- Save it for big purchasesA: Unlike everyday purchases that you can pay for immediately, the Upgrade Card is best suited for your larger purchases that require financing over a long period.
- Always make payments on time and in fullA: Since the renewal card does not allow you to maintain a balance, you must have a plan in place to make payments on time and in full. Paying your bill in full each month will help your billing history (your activity is reported to the credit bureaus) and give you 1.5 percent cash back.
- Prepay your balance: If you can free up funds to pay for purchases financed with an upgrade card, you can choose to pay part or all of the prepayment to shorten the repayment period and pay off the debt faster.
- Keep track of your credit score: Update Card gives users free access to your VantageScore 3.0 and credit monitoring tools. Monitor your score and any suspicious activity to stay on top of your credit.
Should you get an upgrade card?
If you’re struggling to pay off your credit card balance and want to use a more aggressive repayment strategy, the Upgrade Card might be a great choice for you.
Similarly, cardholders who frequently use installment payment services to finance large purchases can benefit greatly from the Upgrade Card. Because the card has a competitive interest rate, credit limit, and cashback, you can use it as your primary payment method for large purchases such as a new sofa, dishwasher, or computer. This way, you won’t have to apply for multiple financing plans and suffer from stringent requirements on your loan.
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