Prosper Card Review: Build Credit With No Security Deposit
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Unsecured credit cards are hard to find when you’re building credit, but this could be a relatively low-fee option.
Qualify with limited credit
No security deposit
Automatic credit-limit reviews
Compare to Other Cards
$0 intro with auto pay, then $39 after first year
23.49%-34.49% Variable APR
27.49% Variable APR
21.89% Variable APR
10.99% intro APR on Balance Transfers for 6 months
Recommended Credit Score
300719poor - good
Recommended Credit Score
Recommended Credit Score
300689poor - average
Detailed review: Prosper® Card
The Prosper® Card, issued by Coastal Community Bank, was created for consumers working to establish credit.
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 fee 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.
The Prosper® Card: Basics
Card type: Bad credit.
Annual fee: $0 intro with auto pay, then $39 after first year.
APR: The ongoing APR is 23.49%-34.49% Variable.
Foreign transaction fee: 1%.
Check to see whether you qualify without affecting your credit scores.No security deposit is required.Get instant access to 50% of your credit limit upon approval by adding your card to a digital wallet.Prosper won't charge fees for ATM cash withdrawals.Prosper will automatically review your account for a credit line increase every three months.
Benefits and perks
No security deposit
Having the money on hand to fund a security deposit for a secured credit card can be difficult, and you don't get that money back until you close the account in good standing. For some cards, minimum deposits can cost $200 or more. However, the Prosper® Card is an unsecured card, so you won't have to make a deposit when you first open the account. (You will owe an annual fee, though; unlike a security deposit, annual fees aren't refundable.)
Pre-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 scores. The Prosper® Card allows you to see what you'd be offered without affecting your credit scores, so you can make a clear-eyed decision as to whether it's the card for you.
If you proceed with the rest of the application process and get approved, your credit scores will typically fall slightly, and temporarily, once the card is added to your credit report.
Instant access to the credit limit
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 by logging into your account online or through 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. Your digital card will allow you to use 50% of your credit limit until you get the physical card.
Credit limit increases
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.
Drawbacks and considerations
An annual fee
The Prosper® Card charges the following annual fee: $0 intro with auto pay, then $39 after first year. You'll have to sign up for auto pay before your first statement is issued to qualify for that first-year waiver. Auto pay 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.
Until you build up your credit scores, a secured card may be your best bet if you want a card with no annual fee. The Capital One Platinum Secured Credit Card has a $0 annual fee, and if you qualify, you can get a $200 credit limit with a security deposit starting at $49.
No cash advance fee, but be careful
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 means Prosper itself won't charge a fee. So 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. The card still charges a very high interest rate on cash advances, and that rate kicks in when 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.
Cash advances are very expensive, so consider them a last resort in an emergency.
Cards aimed at credit-building often skimp on other perks, like cash-back rewards, and the Prosper® Card is no exception. If you're open to a secured card, the $0-annual-fee Discover it® Secured Credit Card earns 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter and 1% cash back on all other purchases. Plus, there's a sign-up bonus for new cardholders, which Discover phrases this way: "INTRO OFFER: Unlimited Cashback Match – only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. Just a dollar-for-dollar match." Note that this card has a $200 minimum for the security deposit.
No card to graduate to
Starter credit cards are a stepping stone to cards with more benefits, so they won't necessarily be at the front of your wallet for the long term. There's no other Prosper card to switch to once you're ready, so you'll need to shop around for a card from a different issuer when the time comes — at which point, you'll also have to decide what to do with your Prosper® Card. Closing it could affect your credit scores, but on the other hand, keeping it open would mean paying an annual fee for a card you no longer need or use.
If an annual fee is a barrier, this secured card is an option. Depending on what you qualify for, you may be able to make a security deposit as low as $49 to get a $200 credit limit.
How to decide if it's right for you
If you're working to build credit and want an unsecured card, the Prosper® Card is an option that charges relatively low fees. But if you don't mind a secured card, no-annual-fee options are available, some of which earn cash-back rewards. And again, a security deposit is refundable; an annual fee is not.