By : 
Mr Credit Card
Mr Credit Card
The Upgrade Select Visa is an unsecured credit card that works like an unsecured line credit card. Every purchase (or draw) that you make on the card has to be repaid over a fix term (up to 3 years) with equal installment payments. This is in contrast to regular credit cards where you can either pay in full, pay just the minimum payment or somewhere in between with no fixed period to repay the entire purchase plus interest.
The Upgrade Select Visa is issued by Cross River Bank and serviced by Upgrade. It comes with a $39 annual fee and you will get a credit limit of between $500 and $2,000. Due to the way Upgrade works, it is an ideal emergency credit card but not one that you should use for every purchases.
The Upgrade Select Visa is issued by Cross River Bank and serviced by Upgrade. It comes with a $39 annual fee and you will get a credit limit of between $500 and $2,000. Due to the way Upgrade works, it is an ideal emergency credit card but not one that you should use for every purchases.
| Pros | Cons |
|---|---|
|
|
|
|
|
|
|
|
|
Understanding How Upgrade Select Visa Work
How Regular Credit Cards Work?
When you make purchases with a regular credit card, you can either pay in full or choose to carry a balance. If you choose to carry a balance, you can either make a minimum payment or pay more than the minimum. There is no fixed payment you have to make other than the minimum payment and there is no time limit as to when you have to pay off your balance. The longer you take to fully pay your balance, the more interest you will end up paying.The Upgrade Select Visa Works Differently
The Upgrade Select Visa works like an unsecured line of credit. When you make a purchase on your Upgrade card, Upgrade calls it a "draw", a term used with a traditional line of credit. You are given an interest rate (APR) and a term maturity (most likely to be 3 years). When you make a purchase or draw on your card, you will have to pay it back over 3 years in equal installments every month. People who get the upgrade card and do not understand this get frustrated because with an installment loan, you acrue interest immediately whereas a credit card will normally give you a 25 days grace period before you are charged an interest.Since the payment works like an installment loan, it keeps cardholders disciplined in their monthly payments and ensures any draws are paid back within a reasonable period. They also report to credit bureaus as an installment loan (which may be good for you if you want to have a more diverse tradelines in your credit report).
Now that we have got this out of the way, let's take a close look at the details of the Upgrade Select Visa.
Card Details
| Credit Limit | $500 to $2,000 |
| Annual Fee | $39 |
| Foreign Transaction Fee | Up to 5% |
| Balance Transfer Fee | Up to 5% |
| APR | 21.96% - 29.99% |
| Term Maturity | Up to 3 Years |
| Bank Issuer | Cross River Bank |
| Serviced by | Upgrade Inc |
| Customer Service Phone Number | 1-800-353-5920 |
| Corresponding Address |
Upgrade 275 Battery Street 23rd Floor, San Francisco, CA94111 |
| contact@upgrade.com |
How You Pay Your Annual Fee is Slightly Different
The Upgrade Select Visa charges a $39 annual fee and is the only Upgrade Card that does so. The anual fee is charged immediately when you get your card and on every anniversary date. The annual fee is considered a "draw" and your credit limit is reduced by $39.Unlike regular credit cards where you can pay off this annual fee after you get your next statement balance, the Upgrade Select Visa will bill the annual fee in your statement over 12 equal monthly installments with no interest.
The annual fee will be charged regardless of whether you use the card or not.
Credit Limits Range from $500 to $2,000
The Upgrade Select Visa will give you a credit limit of between $500 and $2,000. Upgrade has said on their website that most will get a credit limit of $1,500 or less.APR and Term Maturity
The APR ranges between 21.96% and 29.99% while the term maturity is up to 3 years.Foreign Transaction Fees and Balance Transfer Fees
The Upgrade Select Visa allows you to transfer a balance over from another higher rate credit card. The balance fee is up to 5% of the amount transferred. If you make an international purchase or one in foreign currency, the foreign transaction fee is up to 3%.Reports to Major Credit Bureaus as Installment Loan
Upgrade reports to all three major credit bureaus as an installment loan. That means they do not report the full line of credit you have but just what you have utilized.Up to 10% Cash Back with Upgrade Shopping
You may also op-out of the Upgrade Shopping program by contacting support@upgrade.com. However, once you opt out, you can never rejoin the program even if you get another Upgrade card in the future.
Approval Requirements
- FICO Score Needed - You need a FICO score between 580 and 660
- Checking Account Requirements - You do need a checking account to apply.
- No Delinquent Accounts - You must have no delinquent accounts and you must have been paying on time for at least 18 months.
- Any Charge-offs or Collections must be paid or settled - If you have any delinquent accounts charged off and/or sent to collections, you must have paid them off or settled them.
Analysis and Competition
It is very hard to compare the Upgrade Select Visa with other credit cards because as explained in this review, it is different from most regular credit cards. Having said that, we will use a measure that we use on other subprime unsecured credit cards. And that is the Total Fee to Credit Limit Ratio. Because many unsecured credit cards have different fees and credit limit ranges, it is hard to evaluate whether fees are too high or if credit limits are too low. The Total Fees to Credit Limit (TFCL) ratio equializes them. It tells us the percentage of total fees you are paying relative to the credit limits that you are getting. In the analysis below, you will see that the Upgrade Select Visa scores very well in this area.
Total Fee to Credit Limit Ratio for Upgrade Select Visa
Let's illustrate how this calculation works. Let us calculate the TFCL ratio for the lowest and highest possible credit limit, $500 and $2,000. If you get approved for $500, the TFCL ratio for the Upgrade Select Visa is $39/$500 which is 7.8%. If you get $2,000 in credit limit, then the TFCL ratio is $39/$2,000 = 1.95%.
| Card | Annual Fee | Monthly Fee | Credit Limit | Total Fee to Credit Limit Ratio |
|---|---|---|---|---|
| Upgrade Select Visa $500 | $39 | $0 | $500 | $39/$500 = 7.8% |
| Upgrade Select Visa $1,000 | $39 | $0 | $1,000 | $39/$1,000 = 3.9% |
| Upgrade Select Visa $1,500 | $39 | $0 | $1,500 | $39/$1,500 = 2.6% |
| Upgrade Select Visa $2,000 | $39 | $0 | $2,000 | $39/$2,000 = 1.95% |
| Possible Finance $400 | $0 | $8/month | $400 | $(8 X 12)/$400 = 24% |
| Possible Finance $800 | $0 | $16/month | $800 | $(16 X 12)/$800 = 24% |
| Reflex Mastercard $750 | $125 | $0 | $750 | $125/$750 = 16.67% |
| Reflex Mastercard $1,000 | $125 | $0 | $800 | $125/$1,000 = 12.5% |
Upgrade Select Compared To Similar Installment Loan Type Credit Cards
The only comparable card to the Upgrade Select Visa is the Possible Finance credit card, which also has an installment loan type payment plan. Unlike the Upgrade Select, you have a choice to pay in full or in four equal installments. Possible does not charge any interest rate so the APR is 0%. But they do charge a monthly fee to be able to access the credit lines. There is a $400 and $800 credit line version with different monthly fees. At this moment, Possible Finance does not report to any credit bureau (though they are working on it). And their term maturity is very short (4 months). In contrast, the Upgrade Select term maturity is usually up to 3 years.Compared to Regular Unsecured Credit Cards for Bad Credit
Many unsecured credit cards that target people with bad credit come with both annnual fee and monthly fees. Many also have low $300 credit limits. For comparison purposes, I have chosen the Reflex Mastercard. The card has 4 versions, each with credit limits from $300, $500, $750 and $1,000. I have chosen to list the $750 and $1,000 versions because they have good starting limits and only charge an annual fee (ie no monthly fee).As you can see from the table above, the Upgrade Select Visa has much lower TFCL ratio than Reflex regardless of credit limit because their $39 is really low.
For a card that is targeted at those with poor credit, the low annual fee and decent credit limit makes the Upgrade Select really compelling.
Our Take: Great Emergency Credit Card
Because the payment plan and period resembles an installment loan, you would only want to use this card in a emergency. For example, your car needs an expensive repair that you cannot do without. Or there are some things in your house that needs to be fixed. A card like the Upgrade Select is ideal for such expenses because these are things that you could pay off over time in 3 years. You would not want to be putting expenses like groceries or gasoline on the Upgrade Select Visa because these are expenses that should be either paid in cash or paid off in full in your next statement.
To sum up, based on our evaluation and review of the Upgrade Select Visa, we are giving it a 4.5 stars out of 5 for it's low annual fee, good credit limits and it's cash back program. We really have nothing to complain about this card. However, it is very important to understand that the Upgrade Select Visa is more like an unsecured line of credit than a regular credit card and it should be used for emergency expenses that you want to pay off over time rather than everyday expenses. If you have poor credit and are looking for an emergency credit card, then we would highly recommend the Upgrade Select Visa.