LendUp is a start-up that’s best known for its consumer-friendly loans for those with bad credit. What you may not know is that it also offers a credit card (issued by Beneficial State Bank) for the same audience.
Our review will help you decide if it’s the leg-up you need to climb the credit ladder.
Basics and fees
Just like LendUp’s loans try to steer clear of the predatory terms common in the pay-day loan industry, the card attempts to steer clear of the predatory terms common in the subprime credit industry.
- APR: Range of 19.99 percent to 29.99 percent, based on credibility. There’s no penalty APR for late payments.
- Fees: There is an annual fee of up to $60, a LendUp spokesperson confirms. Your actual fee will be based on your creditworthiness.
- Grace period: Some cards for bad credit start adding up interest on purchases the moment a purchase is made. LendUp’s card, however, offers a grace period for purchases, the spokesperson confirms. That means you can avoid interest altogether if you pay by the due date. As with nearly all cards in the industry, however, cash advances will start accruing interest at the time they’re made.
This is an unsecured card, which means that, unlike some cards designed for a subprime audience, you don’t have to make a deposit in advance.
Credit-limit increases for the LendUp credit card
If you have bad credit, cards with low credit limits are part of the game. But as your credit gets better, you’ll want a card whose limit grows. This increases your spending power and makes it easier to keep your credit utilization low, which can accelerate your credit-building.
However, not all cards designed for credit-builders are generous with credit-limit increases, even after you’ve demonstrated your ability to pay on time and handle a higher limit. This may force you to apply for a different card to get your total limit up, resulting in a hard inquiry (which will lower your score).
We asked LendUp’s spokesperson for the official policy on credit-limit increases: LendUp’s system automatically reviews accounts to determine if the cardholder is eligible for a credit-limit increase. Typically, this happens around the seventh statement. Cardholders who are eligible for increases will be notified by email.
When building your credit, you’ll want a card that reports to all three major credit bureaus (TransUnion, Equifax and Experian). Some subprime credit products don’t report, or will report to just one or two bureaus.
According to the LendUp card’s application page, the card reports to all three.
Getting the card
The card is currently available by invitation only, the spokesperson confirms. But LendUp expects it to be available for public application in the future. For now, certain consumers are being targeted with offer codes. If you received one, you can enter it on the application page. Interested in the card, but don’t have a code? You can sign up for updates here.
A good card for credit-builders?
It’s telling that LendUp’s issuing partner for this card is Beneficial State Bank, which was founded as a socially responsible financial institution that focuses on low-income customers.
There are a lot of predatory offers out there for those with poor credit. But this isn’t one of them. Don’t expect lofty limits and exciting rewards from the LendUp card – but do expect a no-frills card that helps you build the kind of score that will get you those things.
There is one caveat to be aware of: This card doesn’t have much graduation potential. One advantage to getting your credit-building card from a major bank is that the bank may have prime products (with rewards) you can later upgrade to without an additional credit pull. Beneficial State Bank just doesn’t have a wealth of prime options.
Even so, upgrades and product-changes aren’t guaranteed with major banks either. And, whenever you’re ready, nothing’s stopping you from applying for a card at any major bank — and perhaps getting a sign-up bonus.
Why we gave it 4 out of 5 stars
We rated this card based on our standards for cards for bad credit.
|Simple/transparent fee structure: This card charges a single annual fee with no additional processing/application fees.|
|Grace period: This card offers a grace period (time to pay your bill without accruing interest)|
|Rewards: This card doesn’t offer rewards. While we do give a star for credit-building cards that kick in rewards, this card’s lack of rewards isn’t a big concern; you shouldn’t be concentrating on rewards while rebuilding your credit anyway.|
|Credit-limit increases: This card has an official policy for evaluating cardholders for credit-limit increases, generally after the seventh month.|
|Progress-tracking benefits: This card comes with credit-education resources help guide you through the credit-building process.|