Milestone® Gold Mastercard® review: A disappointing attempt to help people with bad credit
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The Milestone Gold 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 Gold Mastercard is specifically built for people with bad credit, and at a glance it may look like a good option. It’s an unsecured credit card, so it won’t require a security deposit. This is 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 is laden 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 Gold Mastercard an option for some people who struggle to qualify for better credit card options.
What are the advantages and disadvantages?
- Has a potentially high annual fee (up to $99) but aside from being an unsecured card, it lacks many of the features that would typically justify an annual fee
- High APR (see terms) and other fees make it that much harder to focus on credit building
- Limited features: 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 Gold 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 Gold 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 Gold 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 Gold 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 Gold’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). Other credit cards like the Petal® 1 “No Annual Fee” Visa® Credit Card (issued by WebBank) charge no annual fee and have better credit-building features, including a chance at a credit limit of up to $5,000.
The Milestone Gold Mastercard has a starting credit limit of only $300. This 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. And if you exceed your limit, the over-limit fees can be up to $40 for each card.
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, but 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 cash advance fee of 5 percent or $5 (whichever is greater, not to exceed $100) is waived during your first year.
How the Milestone Gold Mastercard compares to other credit cards for bad credit
Before applying for the Milestone Gold 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.
Milestone Gold Mastercard vs. Petal® 1 “No Annual Fee” Visa® Credit Card
The Petal® 1 “No Annual Fee” Visa® Credit Card excels as a credit-building card for people with bad credit.
The Petal 1 not only requires no security deposit, but also charges no annual fee or foreign transaction fee. The card’s issuer also considers more than just your credit history when you apply. To help potential cardmembers qualify for a card with a higher limit and better rates, the issuer can examine your banking history and income as well as your spending and saving habits to assess your creditworthiness, making it easier to qualify if you have damaged credit but are otherwise in good financial shape .
The Petal 1 also packs a lot of credit-building tools into an app that can make your journey to good credit a whole lot easier. On top of getting free access to your credit score, you can stay on top of what you owe, set up autopay and track purchases.
The app doesn’t stop there. It also has a payment calculator that helps you set budgets, learn more about how interest charges impact your payments and track recurring payments, making it easier for you to remember to cancel any unnecessary subscriptions. It even shows you local merchants where you can earn cash back rewards.
Like the Milestone Gold, you’ll have to watch out for some fees. But with on-time payments, you’ll avoid the Petal 1 card’s late-payment fee of up to $40 and returned payment fee of $29.
Milestone Gold 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 26.99 percent, this card’s APR is slightly 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 good alternative. You won’t have to make one large lump-sum payment to open the account. 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 Gold Mastercard
It’s probably not a good idea to pair any other cards with the Milestone Gold 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 upgrading to a better card. You likely still won’t qualify for the best rewards cards right after graduating from a rebuilding 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 Gold Mastercard worth it?
For a card that is aimed more toward those with less-than-stellar credit scores or little credit history, the Milestone Gold 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 those who might make a late payment.
Make sure to consider other cards before you decide to apply for the Milestone Gold Mastercard. There are much better options out there—even for people with bad credit.