My test member was just upgraded. I did this via the back end. I see him as Premium and also I see his subscription in PayPlans is also a Premium -Forever.
On his profile I see a basic member badge and also still see the upgrade to Premium option displayed.
I would think the new user would assigned a premium member badge (photo 1) and also the Upgrade option would go away (photo 1)
In the back end I have made the module "membership" and assigned it only to Basic & Registered Members. Is this correct or should it be ONLY Basic members?