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Upgrade Review: What You Need to Know

Look out. There’s another company riding the credit wave, carrying promises of affordable loans and cards. But don’t be fooled by the name. Doing business with Upgrade won’t upgrade your financial situation. They may seem great on the surface, but there are plenty of dangers lurking in their fine print.

You deserve to know the truth. That’s why we’re digging into who Upgrade is, how they work, and why they’re just another business trapping people in debt.

Our Quick Take

Upgrade sells products that put people in debt. Period. Don’t fall for the we’re-here-to-help-you act. They’re in the credit game to make money—and that starts with keeping you in debt as long as they can.

What Is Upgrade?

Upgrade is a fintech (financial technology) company founded in 2017 that sells personal loans and lines of credit. They say their goal is “to offer our users more value and a better experience than they receive from their traditional bank.” But the only value they’re adding is a higher chance you’ll take on debt. Yeah, super helpful.

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Upgrade is one of the fastest-growing fintech companies out there. Why? Because they’re really good at making debt seem convenient and hassle-free. (Spoiler alert: It never is.) By promoting lower interest rates and seemingly free perks, Upgrade is able to lure more people into taking out loans or signing up for one of their shiny new cards. But by the time you realize you took the buy-now-pay-later bait, you’ve already paid the cost (literally).

Things may seem easy and low risk, but that’s exactly what credit companies like Upgrade want you to believe. Let’s pull back the curtain on Upgrade’s products to see how things really go down—and why doing business with them is a mistake with a capital M.

Upgrade Loans

Upgrade plays up personal loans as a way to refinance credit cards, consolidate debt, fix up a home, or simply buy something you can’t afford. Because when you’re too broke to pay off your credit card balance, taking out a loan to cover the difference or buying a brand-new washing machine on credit makes a ton of sense, right? It’s the perfect way for a company like Upgrade to trick people into a vicious cycle of debt. “A simple way to build your future?” More like a simple way to ruin your future.

They also boast that they can get you the money for your Upgrade loan within a day—because the sooner you get your money, the sooner they can start charging you interest. Gee, thanks? And speaking of interest, you will be paying it. Unlike credit cards (which usually only charge you interest if you miss a payment), personal loans have APRs (annual percentage rates) that charge you interest just for borrowing money. And the APR for an Upgrade loan can be as high as 35.97%. You didn’t think that loan was free, did you?

So, how much are you really paying when you take out an Upgrade loan? Well, let’s say you get approved for a $10,000 loan to go on a vacation to Maui (we’re talking luxury trip). The loan term is 36 months with a 17.98% APR (that includes a 14.32% interest rate and a 5% origination fee). So, you have to immediately pay $500, which means you’re really only getting $9,500 up front. And since your monthly payment is $343.33, you’ll end up paying $12,359.88 total. (That’s a real example from Upgrade’s website, by the way.) Even if you never miss a payment, you’re paying thousands of dollars more than if you’d just paid with cash! Remind us again how that’s a good deal?

Plus, by the time your tan has faded and everyone else is planning their next adventure, you’re still paying for a trip you took three years ago. Those fixed payments aren’t there to help you—they’re there to make sure you don’t pay off your debt early and Upgrade gets their very generous cut.

Upgrade Card

The Upgrade Card: low interest, no fees, cash back and even bitcoin rewards. Sounds cool, right? Sure . . . until you read the fine print.

First off, the Upgrade Card isn’t a traditional credit card—it’s a personal line of credit. They might sound the same, but they work very differently. A personal line of credit is similar to a personal loan in that you get approved to borrow a certain amount of money. But instead of getting a lump sum all at once, you borrow from the full amount as needed and repay what you’ve borrowed in monthly payments. That means, just like a personal loan, you still have to pay interest on a personal line of credit (even if you make all your payments on time). By calling it a card, Upgrade can make you think you’re in control, when really, they’re the ones making a profit off you.

Upgrade also prides itself on being a more “affordable” option than most credit cards. But does that actually hold up? The average credit card interest rate is 17.13%, but the Upgrade Card starts at 8.99%.1 Starts being the key word. What you don’t know (unless you scroll way down to the bottom of their website) is that you could get stuck paying up to 29.99% in interest for your Upgrade Card. Yep—that’s more than triple what they brag about! Credit companies always use the best-case scenarios to get you to believe it’ll be super easy to make those monthly payments. But you’re probably looking at an interest rate closer to 17% (or higher!).

And what about those predictable, fixed payments they promise? Let’s take another look at the fine print hidden in the footnotes: “If there are changes to your credit score or other risk factors based on a soft inquiry, or changes to market conditions, the availability of your remaining credit, the interest rate, and length of the credit offered may be adjusted for future transactions.” Say what? That’s just credit talk that means your interest rate could go up, the length of your loan could be extended, or you could lose access to your credit line. Uh, so much for predictability.

But they don’t charge any fees, and they give me cash back. Okay, let’s talk about that. Upgrade doesn’t have to charge you fees because they’re getting plenty of money from you in interest. Any “cash” you’re getting back is a small percentage of what Upgrade is already stealing from you in the long run. And by calling them “rewards,” they make you think they’re actually doing you a favor. Sneaky, sneaky, Upgrade. But cash back and credit card rewards (even bitcoin) are never worth it. Credit companies don’t just give out free stuff unless they’re making money from you (or another victim) somewhere else down the line.

Of course, Upgrade doesn’t want you to know any of this. Here’s what Upgrade’s co-founder and CEO, Renaud Laplanche, told CNBC: “Consumers are discovering the benefit of a product that gives them all the convenience of a credit card but doesn’t push them further into debt. Traditional credit cards are a really bad consumer product with very high interest rates and lots of fees. They’re really designed to keep people in debt as long as possible.”2

Yeah, credit cards are super bad, but not our card. Sounds like something a credit CEO would say, don’t you think? Look, debt is debt, no matter how many ways you spin it. An Upgrade card may seem like a better alternative, but it will put you in debt just as easily as a credit card. The only difference is that you’re less likely to see it coming.

Don’t Fall for the Upgrade Trap

Are you starting to see how this works? Upgrade relies on lower interest rates, no fees and cash-back rewards to pull people in. But you can be sure those flashy promises are only there to distract you from what’s really going on behind the scenes.  

Here’s the deal: Companies like Upgrade only stay in business by keeping people in debt. The longer it takes you to pay off that loan and the more they can get you to use your Upgrade card, the more you’re giving them in interest. All that talk about making things easier and more affordable for you is just that—talk. They aren’t loaning you money out of the goodness of their hearts. They’re doing it to make more money.

And Upgrade needs to make a lot of it if they want to please their growing number of investors. Because no one invests millions of dollars into a company unless they know they will get a return. And in this case, that return is in the form of your hard-earned money going straight into Upgrade’s very deep pockets.

The Real Way to Upgrade Your Finances

Upgrade says their personal loans help you get out of debt faster and help you “find the relief of a clear payoff date that you can circle on your calendar.” But if they had their way, that date would never come. And even if you do manage to pay off your debt, they’ll just find another way to loop you back in with another loan or card. Sounds pretty exhausting, doesn’t it?

Credit cards, personal loans and personal lines of credit will always let you down. It’s a rigged system and you’re the one who pays. Every. Single. Time.

But what if you could pay off your debt and stay debt-free? What if you could finally get off the hamster wheel and make real progress with your money? What if you could spend more time building wealth instead of handing it over to someone else?

If you want to truly experience the freedom of being debt-free, Financial Peace University (FPU) will show you how. This course has helped nearly 10 million people learn how to take control of their money for good. With video lessons in budgeting, saving, investing for the future, and more, FPU gives you a plan to take your money game to the next level. And Lesson 2 of FPU will show you step by step the best way to pay off your debt and stay out of debt.

When you follow these tried-and-true principles, you will make progress. And that’s a promise that actually holds up. Start FPU today!

Ramsey Solutions

About the author

Ramsey Solutions

Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners. Learn More.

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