Milestone Mastercard® review: Shocking fees steer credit builders toward better cards

The Milestone Mastercard works like a typical unsecured credit card — you can make purchases up to your credit limit and you must pay your balance off by the card’s due date to avoid interest. You won’t earn any rewards with the card, so there’s not much to keep track of other than your balance and the cost of keeping the card in your wallet.

That said, it’s important to know that if you prequalify for this card through the issuer’s website, you’ll actually be preapproved for one of three different versions with slightly different terms. Factors like your credit history and income determine which version you’re eligible for, but your annual fees, monthly fees, APRs and penalty fees could vary widely from version to version.

And if you prequalify and apply through Bankrate, you’ll get a version of the card with a higher starting credit limit ($700 versus the typical $300), but different rates and fees (see card terms for details). 

This review breaks down this version of the Milestone Mastercard, which is available through Bankrate and potentially via the issuer’s website, but there are 28 or more versions of the Milestone card available through different websites, mailed prescreened offers and channels.

Thoroughly read through the terms of the card you qualify for before moving forward with your application since this confusing process could stick you with a version of the card that charges additional maintenance fees (up to $150 each year in monthly fees), bafflingly high annual fees (ranging anywhere from $35 to $99 each year, or up to $175 in the first year and $49 thereafter) and/or an extreme ongoing APR (from 24.9 percent variable up to 35.9 percent variable). 

If you’re offered a version of the Milestone Mastercard with such sky-high rates and fees, you should almost certainly avoid the card. You can find many alternative credit-building cards that charge no annual fees, carry lower APRs or even offer a rewards program.

Applying for a credit card with a low credit score (or no credit score) can be challenging since a hard credit pull can temporarily ding your credit score and a security deposit could be costly. 

Since the Milestone Mastercard doesn’t require a deposit and has a no-credit-check prequalification process, it may be an appealing credit card entry point for people with low credit scores.

Credit line: Impressive limit with no deposit required

One of the Milestone card’s only appealing features is its potentially high unsecured credit line: You could receive a $700 credit limit with no deposit required. That’s more than double the credit limit you’ll typically find on an unsecured card available with a low credit score. 

That said, the Milestone Mastercard’s staggering fees can easily outweigh this benefit. While the card may be appealing if you want to avoid tying up money in a deposit, its fees mean it will actually cost morethan the typical secured card, especially since you can usually get your deposit back after six to 12 months of responsible card use.

Approval odds: Chance to prequalify with a soft credit pull

Depending on how you apply, the Milestone Mastercard may offer a quick prequalification process that uses a soft pull to look at your credit details. 

Prequalifying for a card doesn’t guarantee approval, but it does give you a strong indication of your chances of approval. This prescreening process may make it easier for you to apply with more peace of mind.

Depending on which version of the Milestone Mastercard you get, you may end up saddled with an exceptionally high annual fee and interest rate while only having access to a small credit limit. These features are especially big downsides given the card doesn’t bring any notable credit-building perks or other benefits to the table.

For most credit builders, a secured card or lower-cost unsecured card will be a better fit.

Rewards: No rewards program or welcome offer

The Milestone Mastercard doesn’t earn rewards, limiting its long-term value. 

Rewards aren’t a given on cards available with limited credit, but several popular credit-building cards do earn rewards and should bring more value to the table.

While it’s hard to recommend most unsecured rewards cards available with limited credit (because many carry high APRs and fees), a few no-annual-fee secured cards offer terrific rewards programs, including: 

• Discover it® Secured Credit Card
• Capital One Quicksilver Secured Cash Rewards Credit Card (See Rates and Fees)
• Bank of America® Customized Cash Rewards Secured Credit Card

The card also doesn’t come with a sign-up bonus, though this isn’t unusual since most cards available with limited credit don’t carry welcome offer rewards. However, it’s worth mentioning that the Discover it® Secured Credit Card and several student cards do carry valuable welcome offers.

Perks: Limited features, even for a credit-building card

Credit cards designed for building credit generally carry limited perks, but the Milestone Mastercard carries even fewer features than most cards in this category. This card doesn’t offer anything beyond its solid approval odds and industry-standard account protection. 

In fact, the issuer’s website doesn’t even cover how you can increase your credit limit or even check your credit score for free — two staple features the majority of credit cards offer (both especially helpful if you’re focused on improving your credit score).

The Milestone Mastercard only offers standard Mastercard benefits. These basic features include basic zero liability fraud protection for unauthorized purchases and identity theft monitoring. Enrolling in the Mastercard ID Theft Protection service allows the issuer to regularly search the surface web and dark web for any of your personal information that may have been compromised (including your Social Security number, email addresses, bank and card info, account logins and more).

However, these “perks” can be found on almost any Mastercard, and are common to most credit cards in general.

Rates and fees: Outrageous annual and monthly fees eat into low credit limit

When you have limited credit history, any type of fee is a distraction from building good credit habits, and the Milestone Mastercard’s annual fee can be shockingly steep compared to the  cost of rival cards. 

For example, the version of the card that carries a $700 credit limit charges a first-year annual fee that’s almost three times higher than Avant Credit Card’s $59 annual fee (see terms). And although the Milestone card’s annual fee drops after the first year, you’ll still be burdened with a steep monthly fee (see terms). In fact, when you combine these monthly fees, your total cost is even higher than the first-year annual fee.

Such enormous fees are already hard to justify given the Milestone card’s limited benefits.

The Milestone Mastercard also has one of the highest ongoing APRs on the market and a $41 overlimit fee if you opt in to the issuer’s Overlimit Coverage (if you haven’t opted in, transactions exceeding your credit limit will be declined). 

Although it sounds like a positive, the Overlimit Coverage can also pose up to two additional $41 fees on top of the original overlimit fee if you carry an over-extended balance to the next billing cycle. However, the coverage’s terms state you’ll only pay one fee per billing cycle. This is especially strange considering overlimit fees have largely gone extinct, and the occasional issuer that allows you to exceed your limit may not charge an overlimit fee to begin with.

On the bright side, the foreign transaction fee is pretty light at 1 percent (typically 3 percent). However, any foreign transactions could be declined unless you notify the issuer with a travel alert beforehand.

Before applying for the Milestone Mastercard, take a moment to consider your options. Odds are you’ll find a secured or unsecured option with stronger features and lower rates and fees that can just as easily help you work on your credit score. In fact, several secured cards carry impressive rewards and lower APRs and fees than the Milestone card. 

However, if you’re set against the typical $200-or-higher upfront deposit, here are a few options worth considering.

High fees, no rewards and few notable features make the Milestone Mastercard a hard sell. Still, there’s a chance this card could be worth considering if you’re set on avoiding a deposit and don’t plan to spend much with the card. 

However, saving up for a solid security deposit may net you more value and credit profile progress in the long run.

For a card that is aimed more toward consumers with less-than-stellar credit scores or little credit history, the Milestone Mastercard limit, rates and fees are a bad combination for people trying to get back on their feet. The high annual and monthly fees (see terms) severely cuts into the initial available credit, and the price tag probably won’t justify the lack of any rewards or features to improve cardholders’ credit. 

Make sure to consider other cards before you decide to apply for the Milestone Mastercard. There are stronger (and more rewarding) options for credit-building with lower rates and fewer fees — especially if you consider secured cards.