Indigo® Mastercard® review: A simple credit-building card with few features

Since the Indigo Mastercard doesn’t require a security deposit, it could be more accessible for people who have declared bankruptcy, with bad credit or with no credit history — and a welcome option.

However, depending on your credit score, you may have to pay a high annual fee. The card also carries a relatively high interest rate and a credit limit of only $300. Its 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). And the fees and interest rate could work against you if you carry a balance on the card. 

The Indigo Mastercard may make sense as a stopgap 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.

This no-fuss card provides credit-builders with simplicity. You won't worry about keeping up with rewards and bonus categories, and though the perks are light, the card comes with top-of-the-line protections that can take the stress off in case your card is lost or stolen.   

Rewards: No temptation to overspend for rewards

Not only does the Indigo credit card have no sign-up bonus or welcome offer, it also offers no rewards or cash back programs. But landing a rewards card without good credit isn’t always the easiest, and it might be best to avoid cards with a rewards structure when you are working on improving your credit history.

Maintaining a manageable credit card balance might be more difficult if you tend to overspend to earn rewards, cash back and welcome offers. Instead, the Indigo card allows you to focus on paying off your balance each month and practice positive spending habits.

Perks: Card protections can offer peace of mind

You won’t find any valuable perks on this card, but it can get the job done. As you work to rebuild your credit, you can focus more on convenient features and basic protections than perks like travel insurance and lounge access.

For instance, the card comes with Mastercard ID Theft Protection™and Zero Liability protection. With the card's theft protection policy, your Social Security number, email addresses, debit cards, credit cards, bank accounts and usernames and passwords for web logins are monitored closely. You'll receive alerts for any suspicious activity as well as access to theft resolution experts who can help you if your identity is stolen.

Additionally, with zero-liability protection, you won't be responsible for unauthorized purchases made in the store, over the telephone, online or via a mobile device and ATM transactions. Credit-builders can rest a little easier knowing they won't have to pay for unauthorized purchases or transactions in case their personal information or credit card is lost or stolen.

While the Indigo card can help you build credit, it can come at a cost. You may potentially pay a high annual fee and, for a card dedicated to credit-building, it lacks some standard features. Similar cards with lower fees and better credit-building benefits might be more appealing.

Credit limit: Hard to keep credit utilization ratio low

You gain access to the Indigo Mastercard credit limit even without a security deposit, making it an unsecured card. Since the card is unsecured, you don’t have to tie up your finances for this card upfront.

But the small $300 credit limit can potentially hurt you as well. An annual fee or having a balance on the card will cut into your credit line. For instance, carrying a balance of just $90 would give you a 30 percent utilization ratio. A balance that is higher could result in a credit utilization ratio that might negatively impact your credit score.

Fees: Additional costs add up

When you apply for this card, the issuer will assign you one of three possible annual fees:

• $0
• $59
• $75 the first year, $99 thereafter

Your credit score 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.

Keep in mind your annual fee initially eats into your $300 credit limit, which can make it more difficult to keep a low credit utilization ratio.

If you get approval for the card, but have an annual fee and your credit score improves while you’re an Indigo Mastercard cardholder, consider applying for another card. Find a new card that’s available with fair or good credit and consider closing your Indigo card account once you get the new card. Keeping your sights on better, more affordable cards will give you a milestone to work toward and familiarize you with the many rewards and perks available.

One highlight of the card’s rates and fees is its foreign transaction fee.The Indigo card comes with a low 1 percent fee for every international transaction, outpacing the typical 3 percent fee found on most other cards. Although the card is not exactly a no-foreign-transaction-fee card, 1 percent is a solid rate for a non-travel credit card.

Ongoing APR: Expensive for carrying a balance

The Indigo Mastercard has a regular APR of 24.90 percent for purchases and a 29.90 percent APR for a cash advance, and missing a payment can bump your interest rate up to the 29.90 percent penalty APR. You’ll also face a late payment fee of up to $40. These rates and fees could hinder your credit-building progress if you happen to carry a balance on your card or miss a payment.

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). Despite this first-year offer, you might want to avoid large cash advances if you have bad credit. After the first year, you will pay interest on the cash advance starting on the transaction date, which can really stretch your credit limit. When rebuilding credit, you should keep costs low within a manageable budget.

Credit-building features: Limited benefits 

This card lacks some attractive features that could be helpful for people working on their credit history. You won't find perks like an automatic review of your account for a credit line increase, free monthly credit reports, or customizable payment plans. 

Instead, the Indigo card has two basic benefits for credit-builders: a soft credit pull to prequalify and reporting credit activity to all three credit bureaus. These two features can be advantageous. For instance, by prequalifying you can get a sense of your approval odds for this card and it won’t impact your credit score.

However, prequalification does not equal approval. Formal approval will still require a hard credit check that will ding your score a bit.

Also, building your credit becomes easier when a card reports your activities to all three major credit bureaus (TransUnion, Equifax and Experian). If you use the card responsibly by making payments on time, you’ll be on the road to establishing good credit and getting credit cards with valuable rewards programs and other benefits.

However, you can find these same features on credit-building cards that offer additional benefits like credit line increases. While you may have to switch to a secured credit card to enjoy extra credit-building perks, there are plenty of unsecured cards, like the Mission Lane Visa® Credit Card, that carry these benefits too.  

Though the Indigo Mastercard may be ideal for people with bad credit or no credit history, several competitors offer comparable benefits at a much lower cost. 

Here are a couple of alternatives to consider.

If you have bad or limited credit history, it may be a good idea to focus on building credit with a single card. Pairing cards or opening multiple cards at the same time could distract you from making on-time payments and make it difficult to stay organized. If you’re just getting started, we recommend keeping things simple and sticking to the basics of credit building. 

The Indigo Mastercard isn’t the right choice for everyone, but if any of these cardholder profiles resonate with you, it may be a solid option to consider.

If you have a low credit score or limited credit history, you might consider the Indigo Mastercard. Getting this card doesn’t require a grueling approval process, and you can prequalify even if you have no credit history.

Yet, the card can be expensive. You could face both a high, nonrefundable annual fee and high interest rates. Plus, its $300 starting credit limit may make it harder to keep your credit utilization in check. With a typical secured card, you could not only avoid an annual fee, but also set your own limit based on your deposit to get a bit more breathing room.   

While the Indigo card could be a temporary credit-building tool if you want to avoid a security deposit, there are less expensive options with better long-term value.

The information about the Indigo® Mastercard® has been collected independently by Bankrate.com. The card details have not been reviewed or approved by the card issuer.

Our proprietary card rating system takes into account a mix of factors when scoring credit cards for people building credit, including each card’s cost, APR, credit-building tools and more.

We analyzed over 50 of the most popular cards designed for people with no credit history, bad credit or a fair credit score and scored each based on where its key features stood in relation to others in its category. 

Here are some of the key factors that gave this card its score: