Milestone® Mastercard® review: A disappointing attempt to help people with bad credit
This card should be a last resort option for credit rebuilders.
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The Milestone Mastercard lacks many of the features people with bad credit should look for in a credit card: It carries a potentially high annual fee, low starting credit limit, several additional fees, a high APR and few credit-building tools.
The Milestone Mastercard Overview
Building credit takes a lot of hard work. Whether you have no credit history or are rebuilding after your credit score took a dive, you may have few options, as many lenders may hesitate to offer you a credit card or personal loan.
The Milestone Mastercard is specifically built for people with bad credit. At first glance, it may look like a good option. It’s an unsecured credit card, so it won’t require a security deposit, making it helpful for people who would not have an easy time coming up with a minimum deposit (typically around $200). Another perk is that it reports your card usage to all three major credit bureaus, so if you practice good credit habits, your credit score may climb.
Unfortunately, like many other credit cards for bad credit, the Milestone card comes with confusing terms, high interest rates and varying annual fees. Keep reading to see if the good can outweigh the bad enough to make the Milestone Mastercard an option for individuals who struggle to qualify for better credit card options.
What are the pros and cons?
No security deposit required, which is usually reserved for individuals with good credit.
Reports to all three credit bureaus, which can help build your credit history
Prequalifying is quick and won’t impact your credit, making it easier to shop around and search for the right credit card
Has a potentially high annual fee (up to $99) while lacking many of the features that would typically justify an annual fee.
High ongoing APR (see terms) and other fees make it that much harder to focus on credit building.
No rewards program or tools to help build good financial habits, which can be found with other credit cards for bad credit.
A deeper look at the current card offer
- Rewards rate: N/A
- Welcome offer: N/A
- Annual fee: $35 to $99
- Purchase intro APR: N/A
- Balance transfer intro APR: N/A
- Regular APR: 24.90 percent
Current sign-up bonus
Since the focus on the Milestone Mastercard is to build credit, the card doesn’t come with a sign-up bonus or a rewards structure. That’s not unusual for cards of this type.
Other cardholder perks
The Milestone card might not be your first choice for credit cards, but if you’re out of options and don’t want to turn to a secured card, it reports to all three major credit bureaus and can help you boost your credit enough to qualify for better credit cards in the future.
Mastercard account protection
Standard Mastercard benefits include zero liability fraud protection for any unauthorized purchases made on lost or stolen cards. They also offer cardholders identity monitoring, protecting your Social Security number, email addresses, account login information, credit and debit cards and bank accounts.
The Milestone Mastercard has a quick prequalification process that uses a soft credit pull to look at your credit details. Prequalification doesn’t guarantee approval, but it does give you a strong indication of your chances of approval. This prescreening process makes it easier for you to shop for a credit card without having a hard credit pull impact your credit.
Rates and fees
The Milestone Mastercard has an ongoing APR of 24.90 percent and a cash advance APR of 29.90 percent for all three of its card offerings. Paying your balance in full each month and avoiding cash advances are good financial habits and are all the more important, given this card’s very high interest rates.
When you have bad credit, any type of fee is a distraction from building good credit habits, and the Milestone Mastercard’s annual fee can be pretty steep depending on your creditworthiness: $35 to $99 ($75 the first year if you qualify for the $99 fee).
The Milestone Mastercard has a starting credit limit of only $300. This amount is already pretty low, and the annual fee also cuts into that limit. Such a low limit can hurt your credit utilization ratio (the amount of money you’ve borrowed relative to your total available credit) and make credit-building a bit harder. If you exceed your limit, the over-limit fees can be up to $40.
You’ll only face an overlimit fee if you opt in to the issuer’s Overlimit Coverage, since transactions beyond your limit will be declined. Although it sounds like a positive, the Overlimit Coverage can pose up to two additional $40 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. The same up to $40 fee applies for late and returned payments.
On the bright side, the foreign transaction fee is pretty light at 1 percent (typically 3 percent) and the issuer waives the cash advance fee of 5 percent or $5 (whichever is greater, not to exceed $100) during your first year.
How the Milestone Mastercard compares to other credit cards for bad credit
Before applying for the Milestone Mastercard, take a moment to consider your options. No matter your preference — secured or unsecured — chances are good that you can find a better option with more features that will help you pay down debt and build credit.
Recommended Credit Score
Recommended Credit Score
Milestone Mastercard vs. Mission Lane Visa® Credit Card
The Milestone Mastercard and the Mission Lane Visa are similar in many ways. The two cards are both geared directly toward consumers with low credit scores and both have features that are pretty standard on credit cards for bad credit. There are, however, a few key differences that set the two cards apart.
For starters, though both cards do carry an annual fee, the Mission Lane Visa beats the Milestone Mastercard slightly with a max annual fee of up to $59. The Milestone Mastercard annual fee would be no less than $35 and could go all the way up to $99 depending on your credit score. If your credit score is already on the rise, you could get as low as no annual fee with the Mission Lane Visa. An annual fee is not ideal for any kind of credit-builder card, but the Mission Lane Visa offers a bit more flexibility on the affordability front.
One of the most significant differences between these two cards is how the issuers communicate the opportunity for a credit line increase. Both cards have the very low starting credit limit of $300, but Mission Lane clearly outlines that seven months of responsible card use could lead to an automatic credit line increase at no additional cost to the cardholder. The Milestone Mastercard does not detail this path to an increase clearly (if at all) and therefore falls a bit short of one of the most common incentives for positive credit habits among credit builders. Overall, everyone has to start somewhere when picking a credit card for bad credit, and the Mission Lane Visa could have more to offer for credit rebuilders.
Milestone Mastercard vs. Capital One Platinum Secured Credit Card
If you’re trying to minimize costs as you rebuild your credit, you may need to turn to a secured credit card like the Capital One Platinum Secured Credit Card.
At 29.74 percent variable, this card’s APR is higher than the Milestone card, but it also has more features that are better suited for people with bad credit. On top of a $0 annual fee, it comes with a flexible security deposit. If you qualify, you could get a starting credit limit of $200 with a deposit as low as $49. Or you can deposit up to $1,000 if you prefer a higher credit limit.
Either way, if you keep your account in good standing, you can close your account or upgrade to an unsecured Platinum card, and your deposit will be refunded. Plus, Capital One will monitor your account and will automatically consider you for a higher credit line in as little as six months (with on-time monthly payments) with no additional deposit needed.
If you prefer an unsecured credit card but can’t qualify for one, the Capital One Platinum Secured Credit Card is a worthy alternative. You won’t have to make one large lump-sum payment to open the account and you’ll have up to 35 days to make your full, required deposit and can make partial payments of at least $20 dollars in that time.
Best cards to pair with the Milestone Mastercard
It’s probably not a good idea to pair any other cards with the Milestone credit card. If you’re in a position where you need this card, you should have one goal — building your credit. Rather than pairing cards with the Milestone credit card, you can think about eventually upgrading to a better card or exploring alternative methods to building credit. Tools like Experian Boost and UltraFICO are a couple of options that use alternative methods for credit building and reporting.
You likely still won’t qualify for the best rewards cards right after graduating from a credit builder card like this one, but you can find cards that offer lower fees and better interest rates for people with fair credit.
Bankrate’s Take — Is the Milestone Mastercard worth it?
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 make for a bad combination for people who are trying to get back on their feet. The high annual fees mixed with a low credit limit severely cuts into the initial available credit, and the indefinite penalty APR gives no grace to people who might make a late payment.
Make sure to consider other cards before you decide to apply for the Milestone Mastercard. There are much better options out there — even for people with bad or damaged credit.
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