Upgrade Launches Secured OneCard to Aid Credit Access

On December 13, 2023, Upgrade announced the introduction of the Secured OneCard, a novel financial tool aimed at supporting individuals with limited credit access or those underbanked. This initiative is part of Upgrade’s commitment to financial inclusivity, offering a secured credit card coupled with a high-yield savings account.

The Secured OneCard extends beyond the conventional credit card by incorporating a savings account with a 5.07% Annual Percentage Yield (APY) and up to 3% cashback for users with minimal or no credit history. This product mirrors the features of Upgrade’s existing OneCard, including a buy now, pay later (BNPL) option, but is distinct in its provision of smaller, secured credit lines. Activation requires an initial deposit of $200, after which there are no minimum deposit requirements, and funds can be withdrawn freely. Notably, the card does not impose any annual fees on its users.

Renaud Laplanche, the founder and CEO of Upgrade, emphasized the card’s significance for consumers striving to build a credit history, a fundamental step towards obtaining loans and other financial products. In light of the current high-interest rate environment, which presents a double-edged sword—beneficial for savers but challenging for borrowers—Laplanche shared insights into how Upgrade is navigating these waters. The company has introduced new financing products, including home improvement, auto, and travel BNPL options, through the strategic acquisition of Uplift, to sustain growth.

Laplanche also addressed Upgrade’s approach to attracting new users amidst tighter credit conditions, highlighting a strategic tightening of credit criteria alongside an expansion into mobile banking. This approach, less affected by credit cycles, is complemented by the launch of high-approval products like the Secured OneCard, ensuring broad consumer value.

Despite previous inquiries about the potential pursuit of a bank charter, Laplanche reiterated his preference for operating as a neobank, leveraging partnerships with chartered institutions to stay agile and innovation-focused. He remains optimistic about the future of digital banking in the U.S., citing the success of fintech leaders in Brazil and South Korea as indicators of the potential for similar achievements stateside.

Looking ahead to 2024, Laplanche hinted at a strategic focus on enhancing Upgrade’s product ecosystem rather than expanding its product line. This approach aims to deliver maximum value to customers, with the possibility of introducing a few new offerings.

Since its founding in 2017, Upgrade has made significant strides in the fintech sector, originating over $26 billion in credit through loans and credit cards, underscoring its impactful presence in the financial landscape.