Meet Upgrade OneCard, a combination credit and debit card

Upgrade has offered consumers personal loans, auto loan refinancing and other personal finance products since 2016. Now, the San Francisco-based fintech company is introducing its latest product — Upgrade OneCard™ — which offers a unique combination between a debit card and a credit card, with a hint of "Buy Now, Pay Later" thrown into the mix.

Select spoke with Upgrade CEO Renaud Laplanche to learn more about the new product and how it aims to help consumers make better decisions regarding spending with debit and credit.

The Upgrade OneCard™ allows consumers to designate between "Pay Now" and "Pay Later" when it comes to paying for purchases. For the former option, the amount will immediately be pulled from the cardholder's checking account, similar to how a debit card functions. For the latter, the purchase amount will be spread out over time to be paid back in fixed installments with interest, like a credit card.

The APR for the OneCard ranges from 8.99%-29.99% (fixed), however, there are no fees outside of the interest charges when choosing the "Pay Later" option. The interest charged is set up as a fixed-rate installment plan, meaning that your specific charges will have a fixed interest rate until it's paid off and you won't have to worry about a fluctuating APR. The card's interest rate range starts at a lower number of 8.99%, compared to the typical starting rate of 12.99% of many other credit cards, so this card could save you some money if you do have to carry a balance.

If you sign up for an Upgrade Rewards Checking Account and spend with the Upgrade OneCard, you'll be able to earn 3% cash back at restaurants, gas stations and drug stores, as well as 2% cash back for all other purchases. These reward categories make it a great all-around cash-back card, but you'll want to make sure you're using the "Pay Now" option as the interest charges you'll pay using "Pay Later" will quickly erase the value of any cash back that you earned.

While the card offers solid cash-back categories to help cardholders save, to qualify, you must combine it with an Upgrade Rewards Checking Account. It's worth noting that whether you choose the "Pay Now" or "Pay Later" option, you'll earn the same amount of cash back and have the same protections as a credit card.

The Upgrade OneCard is technically considered a credit card — so your credit report will be pulled in the application process and the card will sit on your credit file going forward. This can be an opportunity to continue building your total credit limit, which plays a part in determining your credit score. However, if you plan on using the Pay Later feature extensively, having a large revolving credit utilization ratio can hurt your credit score. So before you apply for the OneCard, consider how you plan on using the card first as it could potentially help or hurt your credit score.

Lastly, there is no annual fee and you won't have to worry about foreign transaction fees when using it abroad. Cardholders also have access to several Visa Signature Preferred benefits, including:

• Extended Warranty Protection
• Price Protection
• Travel and Emergency Assistance Services
• Roadside Dispatch
• Visa Signature® Concierge Services
• Zero Liability Policy

Laplanche stated his view of the best way to use this card, saying the "Pay Now" option should be used for smaller, everyday purchases while the "Pay Later" credit option is meant for larger purchases.

If pay later is selected, cardholders will have options featuring fixed monthly payments — something akin to a "Buy Now, Pay Later" payment plan, but with the added ability to earn cash back for your purchases. However, the APR on the payment plan can be anywhere from 8.99%-29.99%. So if you aren't able to make your monthly payments on time or want to avoid interest charges, it's best to avoid a BNPL payment plan.

If you're looking for more financing flexibility, consider using a 0% APR credit card like the Wells Fargo Reflect® Card. With this card, you'll have 0% intro APR on purchases for 21 months from account opening, 18.24%, 24.74%, or 29.99% variable APR afterward. Using a 0% APR card is likely a better choice than using the Upgrade OneCard™ since you can carry a balance and won't be hit with any interest charges during the introductory period, just make sure you have a plan to pay off your debt before the intro period ends.

The Upgrade OneCard™ is a good option for anyone who wants to pay for their daily expenses with the "Pay Now" option, since you can earn cash back at a great rate and enjoy purchase protections and benefits. It's also recommended that you use the "Pay Later" benefit sparingly, as you will be charged fixed fees to finance those long-term charges.

Before applying for a new credit card, be sure to check your credit score to ensure it's up to snuff, and — most importantly — make sure you have a monthly budget set up so you know exactly how much money is coming in and going out each month.

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