5 Things to Know About the BrightWay Credit Card

OneMain Financial's BrightWay credit card, issued by WebBank, is designed for those with less-than-ideal credit. But in many ways, it's a welcome change of pace from other cards in its class.

Yes, some BrightWay cardholders might have to pay an annual fee of up to $65. But there are no monthly maintenance fees or other "gotcha" costs, the card earns rewards and, perhaps most importantly, there is a clearly defined upgrade path to a better card with no annual fee, which takes the guesswork out of how and when cardholders can qualify for that version.

At the moment, however, the BrightWay credit cards are available by invitation only or through certain partner websites.

Here’s what you need to know about the OneMain Financial BrightWay credit card.

» MORE: Best credit cards for bad credit

1. There are two versions of the BrightWay credit card

There are actually two BrightWay credit cards: the BrightWay card and the BrightWay+ card. Applicants may choose which version they apply for.

• BrightWay card. For those building or rebuilding credit. Annual fee: $39 or $65. 

• BrightWay+ card. For those with more established credit. Annual fee: $0.

BrightWay cardholders can graduate to the BrightWay+ card with responsible credit use. (More on that process in the next section.)

For both BrightWay credit cards, the minimum credit limit upon opening an account is $300, while the maximum is $3,000.

2. The upgrade path is straightforward, if lengthy

Not only is it possible to upgrade from the BrightWay to the BrightWay+ credit card, but the process for doing so is also refreshingly clear. The transparency surrounding the upgrade process is a unique and customer-friendly feature.

BrightWay cardholders can be upgraded to the BrightWay+ card after they’ve notched four "Milestone Events." OneMain Financial says a Milestone Event occurs when a cardholder has made six consecutive qualifying payments, which is defined as making at least the minimum payment by the due date. These four milestones don't have to be earned consecutively to count toward an upgrade.

Given those parameters, a BrightWay cardholder could qualify for an upgrade in two years after opening an account.

Admittedly, that's a relatively long time to wait for an upgrade to a better credit card. The Discover it® Secured Credit Card, by contrast, offers upgrades starting at seven months. But Discover isn’t as specific about its upgrade requirements as BrightWay.

» MORE: How to upgrade or downgrade your credit card

3. Good credit habits can boost credit limit or lower APR

If you stick with a BrightWay card, it will reward you with incentives along the way. After achieving a Milestone Event, cardholders can choose one of two Milestone Benefits: a lower purchase APR or a higher credit limit. Note that APR cannot be reduced below 19.99%, and the credit limit cannot exceed $15,000.

Cardholders forfeit their Milestone Benefit if they don’t select one by the payment due date following the billing cycle that the Milestone Event was earned.

After cashing in on a Milestone Benefit, the number of qualifying payments resets to zero, and you can begin working toward another Milestone.

4. Both cards earn rewards

The BrightWay and BrightWay+ credit cards earn an unlimited 1% cash back on all purchases. Cash back is automatically redeemed for a statement credit at the end of each billing cycle.

Among credit cards for poor credit (credit scores of 629 or lower), those are solid rewards.

5. Foreign transaction fee is low

The foreign transaction fee on both BrightWay cards is 1%, which is lower than the 3% fee that many other non-travel-focused credit cards charge. Plus, as a Mastercard, the BrightWay cards will be widely accepted around the globe.