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The Prosper Card, issued by Coastal Community Bank, was created for consumers who are working to establish credit. According to a Prosper representative, 80% of cardholders have a credit score below 660.
Unlike most cards geared toward this group, however, it’s not a secured credit card, so it doesn’t require a security deposit. This makes the Prosper Card a compelling option for anyone who wants the traditional credit card experience while they build their credit.
The Prosper Card charges an annual fee, which may be a deal breaker if you’re trying to keep costs down, though there is a way to get a break from that for the first year. The card doesn’t offer rewards, nor is there another Prosper-issued card to graduate to. So as your credit situation changes, you may want to seek out other cards that offer perks for no annual fee.
Here are five things to know about the Prosper Card.
1. You can see if you qualify without affecting your credit score
When you apply for a credit card, you typically don’t know if you’ll be accepted without a hard credit inquiry, which can temporarily lower your credit score. The Prosper Card allows you to see what you’d be offered without affecting your credit score, so you can make a clear-eyed decision as to whether it’s the card for you.
Note that if you proceed with the rest of the application process and get approved, your credit score will lower slightly once the card is added to your credit report.
2. You can skip the annual fee for a year
The Prosper Card charges a $39 annual fee, but if you’re willing to sign up for autopay before your first statement is issued, that fee will be waived for the first year.
Autopay can be tricky if you’re worried you might not always have the money available in your bank account to cover your bill, but the Prosper Card lets you choose your monthly payment date. This way, you can line it up with when you get a paycheck.
3. There’s no fee for ATM cash advances, but proceed with caution anyway
The Prosper Card doesn’t charge an ATM fee if you use your card for a cash advance, a fact that’s prominently displayed on its website. However, that just means Prosper itself won’t charge a fee. You may still be subject to another fee from the ATM’s owner.
And then there’s the pesky matter of the interest you’ll pay. As of this writing, the cash advance APR for the Prosper Card is 30.24%. That’s a very high interest rate, and it kicks in the moment you grab that cash out of the ATM. That’s unlike the interest you’d pay for purchases, which doesn’t begin to accrue until after the payment due date.
The point being, cash advances are very expensive, so consider them as a last resort in an emergency.
4. You may soon qualify for a credit limit increase
Your initial credit line will be between $500 and $3,000, depending on what you qualify for. But that can change quickly, because Prosper will automatically review your account for a credit line increase every three months. However, note that as a result of these reviews, your credit line might remain the same or even decrease.
5. You can use the card instantly once you’re approved
You don’t have to wait for a physical card to arrive in the mail to use your Prosper Card. Once your application is approved, you can get a digital card on the Prosper app, which is available on both the Apple App Store and the Google Play Store. Once you get the digital card, you can add it to your digital wallet. You can also access a temporary digital card when you log in to your account online.