Prosper Credit Card [An Honest Review]

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As their slogan goes, The Prosper Card was built to help you take control of your credit. The unsecured credit card is issued by Coastal Community Bank and targets consumers with below-average credit scores who struggle to get approved for credit by major banks.

Their average user has a credit score below 660, and since roughly 34% of Americans fell into this category as of 2019, there is no wonder the card prospered as well as it did. However, just because it prospered doesn’t automatically mean it’s a high-value card that we would recommend.

So, if you’re in the market to build your credit and currently looking for the best card that suits your needs and current rating, we’re here to help you. This guide goes over the good, the bad, and the ugly of The Prosper Card to help you make an informed decision. Continue reading to gain insight into our honest opinion.

For more credit cards that can help you build credit, check out Revvi, Verve and First Phase.

Table of Contents

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Prosper Credit Card Annual Fee

There is no annual fee for the first year with Autopay. However, cardholders must signup for Autopay before their first monthly statement is posted; otherwise, their account will be subject to the $39.00 annual fee. After the first year, every cardholder is subject to an annual $39.00 yearly fee.

While it is true that many cards on the market have lower annual fees, the average annual credit card fee is $147.00. Considering this, we believe a $39.00 yearly fee for a credit building card is fair game.

Prosper Credit Card Interest Rate

The Prosper Card APR varies, ranging from 21.99% to 32.99%, depending on the cardholder’s credit score. Suppose you’re approved for 32.99% upon opening your account, and you keep your account in good standing; later on you can reapply for a lower APR once you’ve established enough history.

As of this year, the average credit card interest rate is 21.59%, falling slightly below the lowest interest rate that the Prosper Card offers. What’s more, 21.59% is the highest that the average credit card interest rate has been since 2019, meaning the Prosper Card’s APR is relatively high for the average American credit card holder. As such, we think you can find a much better card if you’re basing your decision on APR alone.

Prosper Credit Card Cash Advance Fees

There is a $0 fee for cash advances. However, the overall statement balance will be subject to the assigned interest rate of the card. This means you will be charged the card’s APR if the balance is not paid in full each month.

While we never recommend using a credit card for cash advances, if you must use this feature, we highly recommend you only do it on cards that charge no cash advance fees. Since The Prosper Card does not charge a fee, it has our vote for this one.

Prosper Credit Card Security Deposit

This is where The Prosper Card has a competitive advantage over its rivals. This credit building card does not require a security deposit. If approved, new cardholders will start with a credit limit between $500 – $3,000, which is determined based on their credit history.

Most credit building cards are secured meaning they require a security deposit upfront to activate the card. The ones that don’t will typically start their new users off with a $200 credit limit which many applying consumers feel is not enough. As such, The Prosper Card is much more appealing when it comes to the security deposit feature.

Prosper Credit Card Rewards Program

The only reward the cardholder is getting with this card is the ability to restore their damaged credit. The Prosper Card does not currently have a rewards program in places such as points, miles, or cashback. This could change in the future since a lot of their target consumers are choosing similar cards that offer a reward program.

This is a significant drawback considering nearly every card company on the market offers a reward system to entice consumers to choose them. We think you should consider a similar card that offers a rewards program that helps you keep money in your pocket.

Prosper Credit Card Late Fees

Cardholders will be charged a late fee of up to $40. According to consumer finance, “In 2019, first-time late fees for general purpose cards averaged $26, while repeat fees were 36 percent higher at $35 on average.” While The Prosper Card does not offer leniency for a consumer’s first late payment, its maximum fee is just slightly over the national average.

While charging late fees may seem unnecessary and somewhat of a cash grab, it is just another incentive for cardholders to keep their balance paid off, which is the key to building credit. So, this is not a win nor a drawback for The Prosper Card.

Prosper Credit Card Minimum Interest Charge

If your statement is charged an interest fee, the charge will be no less than $1.00. (For residents of Maine, the minimum interest charge will be no more than $0.50). If you want to avoid interest altogether, you should pay your entire balance by the due date each month. This is typical for most credit cards across the board.

Prosper Credit Card Monthly Credit Bureau Reporting

Your account information will be reported monthly to TransUnion, Experian, and Equifax, reflecting your credit score. Remember that your score will be negatively impacted if your card utilization rate (total balance used) is high each month and if you miss payments. The credit reporting feature is one of the most significant benefits to cardholders as it gives them an opportunity to improve their credit rating.

Find out how you can hide your credit card utilization rate to help your credit score.

Our Final Verdict on the Prosper Credit Card

We give this card an overall rating of 3.5/5 – not the worst but far from the greatest. The pros to this card are that it is unsecured, the application process is relatively seamless, and most importantly, it reports to all three of the major credit bureaus. We would say this is a decent starter card for consumers with zero established credit or who need to repair damaged credit. However, considering the above-average APR compared to its direct competitors, we think there are far better options on the market. Everything else considered we think that The Prosper Card should only be among your top choices if you can’t get approved for an alternative that offers a better APR and that also reports to the credit bureaus.