Are you struggling with a less-than-perfect credit history or just starting your credit journey? The Prosper Credit Card might be the answer you’ve been looking for. In this article, we’ll delve into the details of this credit card, designed to cater to bad credit and new credit customers. We’ll also explore the intriguing feature of a soft inquiry during the application process, which won’t negatively impact your credit score.
Prosper: More Than Peer-to-Peer Lending
Prosper started as a peer-to-peer lending platform, connecting borrowers and investors. However, its financial product offerings have expanded, and the Prosper Credit Card is its latest addition. While it aims to serve those with a rocky credit history, it also claims to be suitable for individuals looking to establish credit. Let’s take a closer look at the key features of this card.
Key Features:
- Annual Fee: The Prosper Credit Card comes with a $39 annual fee, but don’t fret. The good news is that this fee is waived for the first year if you sign up for auto-pay, allowing Prosper to deduct your credit card payments directly from your bank account.
- Rewards and Bonuses: If you’re hoping for rewards and bonuses, this card may not be the right fit. It’s a no-frills card, ideal for those with a challenging credit history or newcomers to credit.
- Credit Limits: Your credit limit could range from as low as $500 to as high as $3,000. Moreover, Prosper claims to review your account for potential credit limit increases every three months, so diligent payment behavior could lead to a higher limit in a relatively short time.
- Interest Rates: The card’s interest rates vary, with a low-end rate of 23.99% and a high-end rate of 29.99%. It’s essential to remember that carrying a balance on this card, or any other credit card for that matter, isn’t advisable due to the relatively high-interest rates.
- Foreign Transaction Fees: If you’re planning to use the card outside of the United States, you’ll only face a 1% foreign transaction fee, which is more favorable than many other cards that often charge 3%.
- Cash Advance: While the Prosper Credit Card boasts no cash advance fees, it’s important to exercise caution with cash advances. They can incur immediate interest charges at a high rate of 29.99%.
- Flexible Payment Date: This card allows you to select your payment date, making it convenient for you to manage your monthly credit card payments.
- Instant Approval and Digital Use: You may be eligible for instant approval and immediate digital use of some or all of your credit lines. Keep in mind that Prosper Credit Card isn’t a bank itself but works with banks like Coastal Community Bank for its financial offerings.
The Soft Pull Advantage
One unique selling point of the Prosper Credit Card is the promise of a soft inquiry (soft pull) on your credit report during the application process. This means that your credit score won’t be negatively affected just by applying. However, it’s crucial to understand the details.
Here’s how it works: When you apply for the Prosper Card, they perform a soft inquiry to evaluate your credit history. If they determine that you won’t qualify for the card, you won’t have to worry about a hard inquiry. But if you are approved, your credit score may experience a temporary dip due to the new credit account. Nonetheless, responsible use and timely payments should help improve your credit over time.
Prosper’s website isn’t entirely clear on the absence of hard inquiries, but their emphasis on the soft pull suggests that they intend to protect your credit score during the application process.
Comparing Prosper to Competitors
Prosper positions itself in the market by comparing its card to competitors such as the Capital One Platinum Card and the Merrick Bank Secured Card. These comparisons provide insights into the card’s target audience.
- Capital One Platinum Card: This card is basic, unsecured, and comes with no annual fee. However, it features a high-interest rate and lacks rewards.
- Merrick Bank Secured Card: As a secured card, you’re required to provide a security deposit to get this card. Prosper Credit Card seems to be competing in the same space, targeting individuals who either lack credit history or have a less-than-ideal credit history.
Is the Prosper Card Right for You?
New to Credit?
If you’re new to credit, there are likely better options available. Major credit card issuers like Capital One and Discover offer starter cards that may be more appealing, often without an annual fee. You can also check if you prequalify on their websites.
Rebuilding Credit?
If you have a troubled credit history, the Prosper Credit Card Card might be worth considering. While not perfect, it stands above many bad credit options with higher fees and interest rates. If you make on-time payments, you could see your credit limit increase after just three months. However, if you have other options, explore those first. Consider Capital One or Discover, which could offer more favorable terms.
Low Credit Score?
If your credit score falls below 550, securing approval for the Prosper Credit Card might be challenging. In this case, you might want to explore secured credit card options from major issuers. While you’ll need to provide a deposit, these cards offer a path to improving your credit and potentially graduating to an unsecured card in the future.
Conclusion
The Prosper Card Mastercard is a viable option for individuals with challenging credit histories and those looking to rebuild credit. Its unique feature of a soft inquiry during the application process can be appealing. However, before committing, explore other credit card options that might better suit your needs. Remember, responsible credit management is key to improving your financial future.
Frequently Asked Questions (FAQs)
What is the Prosper Card Mastercard?
The Prosper Card Mastercard is a credit card offered by Prosper, originally known as a peer-to-peer lending platform. This card is designed to cater to individuals with a less-than-ideal credit history and those who are new to building credit.
How does the Prosper Card differ from other credit cards?
The Prosper Card is primarily tailored for customers with bad credit or limited credit history. It has relatively low credit limits, no rewards program, and annual fees (though the first year’s fee is waived with auto-pay enrollment). Its unique feature is the promise of a soft inquiry during the application process, which doesn’t negatively impact your credit score.
What are the key features of the Prosper Card Mastercard?
- Annual Fee: The card has a $39 annual fee, which is waived for the first year if you sign up for auto-pay.
- Rewards and Bonuses: It doesn’t offer rewards or bonuses.
- Credit Limits: Credit limits can range from $500 to $3,000.
- Interest Rates: The card’s interest rates range from 23.99% to 29.99%.
- Foreign Transaction Fees: There’s a 1% fee for transactions outside of the United States.
- Cash Advance: Prosper boasts no cash advance fees.
- Flexible Payment Date: You can choose your payment date for convenience.
- Instant Approval and Digital Use: Eligible customers may receive instant approval and can use their credit line digitally while waiting for the physical card.
What is a soft pull, and how does it work with the Prosper Card application?
A soft pull, also known as a soft inquiry, is a credit check that doesn’t impact your credit score. Prosper Credit Card claims to perform a soft pull during the application process, ensuring that your credit score isn’t negatively affected just by applying. However, if you’re approved, your credit score may experience a temporary dip due to the new credit account.
How does the Prosper Card compare to other credit cards?
Prosper positions itself as a card for individuals with bad or limited credit history, comparing itself to the Capital One Platinum Card and the Merrick Bank Secured Card. These comparisons suggest that Prosper targets a similar audience.
Is the Prosper Card suitable for individuals new to credit?
If you’re new to building credit, there are likely better options available. Major credit card issuers often offer starter cards with no annual fees. You may even qualify for one of these cards without a credit history. Consider exploring options with Capital One or Discover.
Is the Prosper Credit Card a good choice for rebuilding credit?
If you have a troubled credit history, the Prosper Card could be worth considering. While not the best option available, it stands above many bad credit cards with higher fees and interest rates. Timely payments could lead to credit limit increases, but be sure to explore other credit card options first.
What credit score is required to get approved for the Prosper Credit Card?
While Prosper’s website doesn’t specify a minimum credit score requirement, the card’s comparisons to other cards in the market suggest that it targets individuals with credit scores over 600. Below 550, approval becomes less likely.
How can I apply for the Prosper Card Mastercard?
You can apply for the Prosper Card on the Prosper website. The application process typically involves providing personal and financial information for evaluation.
Can the Prosper Card help improve my credit score?
If used responsibly, the Prosper Card can contribute to improving your credit score over time. Making on-time payments and managing your credit utilization are essential steps in this process.