Upgrade Select Visa vs Credit One Visa for Rebuilding Credit

Executive Summary

Both the Upgrade Select Visa and the Credit One Platinum Visa for Rebuilding Credit are credit cards that target those with poor credit with score in the high 500s area. Credit One is a more traditional credit card whereas the Upgrade Select Visa is more like an installment loan in a credit card.

In this comparison, I would argue that there is room to get both cards though the Upgrade Select has lower fees and a higher possible credit limit.

What is Upgrade Select Visa Card?

The Upgrade Select Visa card is a targeted at those with a FICO score of at least 580 and above. It is different from regular credit cards in that it acts more of a installment line of credit within a credit card. When you make a purchase on the Upgrade Select Card, Upgrade considers it a draw. Whereas a regular credit card will allow you to either pay back the balance or carry a balance with just a minimum payment, you will pay back the "draw" to Upgrade in equal installments over a term (either 24 or 36 months). The Upgrade Select Card allows you to make a series of "draws". Hence, it is an ideal emergency credit card for expenses that you want to pay over time like a loan.

When you apply for the Upgrade Select Visa, you will be given the interest rate and the term (normally 24 or 36 months). Credit limits will range between $500 and $2,000. There is an annual fee of $39.

What is Credit One Platinum Visa for Rebuilding Credit?

Credit One is the largest credit card issuer in the subprime space. The Platinum Visa for Rebuilding Credit is targeted at rebuilders who have at least a high 500 FICO score. This card offers 1% cash back rewards on purchase of gas, grocery, internet, cable, satellite TV and mobile phone services.

The annual fee is $75 for the first year and increases to $99 (to be paid monthly at $8.25/month) from the second year onwards. The initial credit limit is $300. Credit One regularly reviews your account for credit limit increases.

Similarities

Both Credit One and Upgrade Select are similar in the following ways:

Targeted at those with poor credit

Both the Credit One Platinum Visa for Rebuilding Credit and Upgrade Select Card target rebuilders with less than ideal credit scores. For the Upgrade Select, you need a FICO score of at least 580 to get approved. The Credit One Platinum Visa for Rebuilding is also for people with mid to high 500 FICO scores. Credit One also has been known to approve people who have just been discharged from bankruptcy.

Charge annual fees

Both the Upgrade Select and Credit One charges annual fee. For the Upgrade Select, the annual fee is $35. For Credit One, it is $75 during the first year and $99 from the second year onwards (to be paid monthly).

Credit Bureau Reporting

Both Credit One and Upgrade Select reports to all three major credit bureaus (TransUnion, Equifax and Experian).

Differences

The Upgrade Select Card and Credit One are different in many ways though:

Regular Credit Card vs Installment Loan Line of Credit

The Credit One credit card and the Upgrade Select Visa are fundamentally very different. The Credit One Platinum Visa for Rebuilding Credit is a regular credit card. You can choose to pay your balance in full, pay the minimum balance only or somewhere in between. In contrast, using the Upgrade Select Visa is like taking a loan. You will pay back your "draw" with equal installments over a fixed period or term.

Reports Differently to Credit Bureaus

Credit One reports to the credit bureaus like a regular tradeline. In contrast, the Upgrade Select Visa reports to the credit bureaus as an installment loan. Hence, using your full credit on the Upgrade Select card will not affect your credit utilization.

Upgrade Select has lower annual fee

Upgrade Select has lower annual fee than Credit One. During the first year, the Credit One annual fee of $75 is almost double the $39 annual fee of the Upgrade Select. It is slightly more than double from the second year onwards ($99 vs $39).

More likely to get a higher credit limit with Upgrade

Credit One is likely to start you off with a $300 credit limit though some have gotten a starting credit limit of $500. They do give credit limit increases but for this version of their card, the maximum credit limit is $1,500.

With the Upgrade Select Visa, the minimum starting credit limit is $500 and the maximum of $2,000 is higher than Credit One's $1,500 max limit.

Which is Better? Credit One or Upgrade Select?

As you will realize by now, both Credit One and Upgrade Select are very different credit cards though they target the same type of consumers (those who are rebuilding their credit). Credit One is a traditional Visa credit card with cash back rewards and they are meant to be used for everyday purchases. In contrast, the Upgrade Select Visa acts like a line of credit where you can take a series of loans and pay back in fixed equal installments over a fixed period. Both serve different purposes and is appropriate for different types of expenses. This is reflected in the way that both cards report differently to the credit bureaus.

In terms of fees and credit limits, I would give the slight edge to Upgrade Select Visa.

At the end of the day, I cannot pick a winner between these two cards. Yes, the Upgrade Select has lower fees. And that could be important for many of you. But they are really different credit cards. If you are looking for a regular unsecured credit card for everyday use to rebuild your credit, then the Credit One Platinum Visa for Rebuilding Credit might be the better choice.

However, if you are looking for an emergency card, then the Upgrade Select Visa would be the better choice.

In fact, there is nothing to stop you from getting both cards. If you do, then you can use Credit One for everyday purchases (and pay off your bills in full) and the Upgrade Select only in emergencies where you want to pay off an expense over time.