Indigo® Mastercard® review
A simple credit-building card with a few interesting features.
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Indigo® Mastercard® review: A credit-building card for builders and rebuilders alike
The Indigo® Mastercard® can be a decent option for people with bad credit or no credit history, whether you’re a student, recovering from financial missteps or looking for a credit card after bankruptcy. And since it doesn’t require a credit check or security deposit, the card is an especially accessible option for credit-builders.
However, the card may carry an annual fee based on your creditworthiness, has a high APR of 24.90 percent and carries a credit limit of only $300 (and if you have an annual fee, it will eat into your credit limit initially). Along with the potentially high cost of its fees and interest charges, the card’s low limit could make it challenging to build credit since it will be harder to keep your credit utilization ratio low — a significant factor in your credit score.
For the right user, the Indigo Mastercard may make sense as a stop-gap credit-building option, but if you have fair credit or are open to putting down a refundable deposit on a secured credit card, you might want to look elsewhere.
What are the advantages and disadvantages?
- High regular APR (24.90 percent)
- Potentially high annual fee, depending on your creditworthiness (up to $99, $75 your first year)
- Low maximum credit limit of $300 can hobble your credit utilization ratio
A deeper look into the current card offer
- Rewards rate: N/A
- Welcome offer: N/A
- Annual fee: $0 to $99
- Purchase intro APR: N/A
- Balance transfer intro APR: N/A
- Regular APR: 24.90 percent
Current welcome offer
Unfortunately, the Indigo credit card does not have any sign-up bonus or welcome offer. It also doesn’t offer any rewards or cash back programs, but landing a rewards card without good credit isn’t always the easiest. However, you do receive a 0 percent cash advance fee for your first year (then $5 or 5 percent of the total transaction amount, whichever is greater, but must not exceed $100).
You might want to avoid large cash advances if you have bad credit despite the 0 percent fee offered for the first year. You’ll still pay interest starting on the transaction date, and cash advances can really stretch your credit limit. When rebuilding credit, you should keep costs low within a manageable budget. Doing so will limit your credit utilization and increase the likelihood you’ll be able to afford your credit card bill.
Other cardholder perks
There are a few benefits of using the Indigo Mastercard that make it a decent choice if you have poor credit or limited credit history. At this credit level, you should be more focused on convenience features and basic protections instead of high rewards rates, travel insurance and purchase protection benefits.
Soft credit pull
Whenever you apply for a credit card or any other type of line of credit, you may be subject to a credit check. This check will slightly affect about 10 percent of your credit score for up to two years. People with poor credit may experience problems qualifying for a line of credit as a result, but because the Indigo Mastercard’s prequalification does a soft credit pull instead of a hard credit check, your credit will not be impacted.
Fast and easy application process
Many credit cards feature a grueling and time-consuming application process, but the Indigo Mastercard is one of the easiest cards to get. Have all your basic information ready and you can finish the entire process online in around a minute. As long as you are 18 years old (19 in Alabama) and have a valid social security number plus a US physical and IP address, you can apply and get started.
Build your credit
Building your credit with this card can be easy since it reports your activities to all three major credit bureaus (TransUnion, Equifax and Experian). If you act responsibly by making payments on time, you’ll be on the road to establishing good credit and obtaining credit cards with valuable rewards programs and other benefits.
Just keep in mind your annual fee initially eats into your small $300 credit limit, so it could be challenging to keep a low credit utilization ratio—which is a significant factor of your credit score.
High approval rate
The Indigo credit card is a card designed for those with less than perfect or no credit history. With its high approval rate, it creates an easy and quick way to improve your credit.
Standard credit limit without security deposit
You gain access to the Indigo Mastercard credit limit even without a security deposit, making it an unsecured card. This means you do not have to tie up your finances as collateral for this card upfront.
Rates and fees
The Indigo Mastercard has a regular APR of 24.90 percent for purchases and a 29.90 percent APR for a cash advance. Note that missing a payment bumps your interest rate to the 29.90 percent penalty APR in addition to the late payment fee of up to $40.
When it comes to foreign transaction fees, you will incur a 1 percent fee for every transaction, no matter the currency used in the purchase. Although it’s not exactly a no foreign transaction fee card, that’s a solid rate for a non-travel credit card since the typical fee for using your card abroad is 3 percent.
When you apply for this card, you will be assigned one of three possible annual fees: $0, $59 or $99, with the third pricing tier starting at $75 during the first year and $99 thereafter. Your creditworthiness ultimately determines your annual fee and Indigo doesn’t specify in the cardholder terms whether your annual fee will change as your credit score changes.
If you’re assigned an annual fee and your credit score improves while you’re an Indigo Mastercard cardholder, consider applying for another card that’s available with fair or good credit and closing your Indigo card account once your application is approved. Keeping your sights on better, more affordable cards will give you a milestone to work towards and familiarize you with the many rewards and perks available.
How the Indigo Mastercard compares with other credit-building cards
The Indigo Mastercard has many competitors offering similar benefits. Two of the main alternative credit cards to consider include the Capital One Platinum Secured Credit Card and the Discover it® Secured Credit Card.
Indigo Mastercard vs. Discover it® Secured Credit Card
Discover’s secured card is perhaps the best on the market. It requires a $200 minimum security deposit, but you may qualify for a $2,500 maximum credit line, and, more importantly, it’s one of the rare secured cards to earn rewards. You’ll earn 2 percent cash back at gas stations and restaurants (on up to $1,000 in purchases per quarter, then 1 percent), plus 1 percent on all other purchases. Even better, Discover matches all cash back earned in your first 12 months, which essentially doubles your first year’s rewards.
Since the Indigo Mastercard doesn’t earn rewards, the Discover it Secured has a clear edge. If you can qualify for the card and come up with the $200 security deposit, you should definitely skip the Indigo card and go with the Discover Secured card instead. While earning rewards shouldn’t be your priority if you’re focused on building credit, they’re a great bonus and can help those struggling financially by putting a little extra cash back into their hands. Plus, the card carries no annual fee and putting down a higher security deposit gets you a higher credit limit, making it easier to keep your credit utilization low.
Indigo Mastercard vs. Capital One Platinum Secured Credit Card
The Capital One Secured doesn’t charge an annual fee, but in exchange, the APR is 26.99 percent variable, which is high compared to other competitors including the Indigo. The clincher here is that you’ll be automatically considered for a higher credit line in as little as six months with on-time monthly payments, which is an earlier timeline than other cards’ and can speed up the credit-building process.
The required deposit to open a Capital One Platinum Secured card is $49, $99 or $200 based on your creditworthiness—which is much lower than many other cards’ deposits—and it can be paid in ($20 minimum) installments within the first 35 days of your application.
If you’re looking to keep costs low, it might be worth opting for a secured card over the Indigo Mastercard. With a secured card, you’ll get your deposit back when you close your account or graduate to an unsecured card, whereas the annual fee you pay to hold the Indigo Mastercard (if you have one) is nonrefundable. While not everyone can afford to tie up money in a security deposit, Capital One’s minimum deposit is less than the annual fee required by Indigo’s second and third tiers (and you’ll get it back eventually).
Best cards to pair with this card
The best card to pair with the Indigo Mastercard is one that earns a decent rate of rewards, but is also accessible for people with no or limited credit history. The Discover it Secured card could be a great pairing option because it’s available to people with limited credit history but also offers a lucrative welcome bonus and consistent rewards in popular spending categories.
Bankrate’s take—Is the Indigo Mastercard worth it?
If you have low or no credit, then the Indigo Mastercard may be a good choice for you. Applying for this card does not require an extensive approval process and you can pre-qualify even if you do not have a credit history. Plus, this card doesn’t even require a security deposit.
On the other hand, the Indigo Mastercard interest rates are relatively high, and the $300 credit limit can be restrictive since you can’t request a limit increase. The lack of a bonus or cash back rewards are factors to consider too, but this isn’t out of the ordinary for cards focused on credit-building. If you have at least a fair credit score, you should explore other credit cards as they may offer better benefits and potentially higher credit limits.