Milestone Mastercard^® Review: An Expensive Option For Building Credit

If you’re looking to build your credit profile, the Milestone Mastercard^® may seem appealing at first glance, since it doesn’t require a deposit, accepts fair / good credit and reports to the three major credit bureaus (Experian, Equifax and TransUnion). But its high cost makes it ultimately not worth it. There’s a pricey annual fee that will reduce the amount of your initial credit line and a monthly fee. There’s also a high APR and no rewards program.

A credit card that offers credit-building tools and rewards on every purchase without charging an annual fee, like the Discover it^® Secured Credit Card, Capital One Quicksilver Secured Cash Rewards Credit Card (see rates & fees) or Chase Freedom Rise® Credit Card would be a much better option.

• Annual fee: See terms
• Sign-up bonus: No bonus
• Rewards: Non-rewards card
• APR: See terms
• Foreign transaction fee: 1% of each transaction in U.S. dollars
• Recommended credit: Fair / Good

• No security deposit required

  Secured cards are some of the best cards for building credit, but they require a security deposit (usually starting at $200) to open the account. But because the Milestone Mastercard^® is unsecured, you won’t have to pay money upfront to open your account.

  That said, while no deposit is required, this card comes with high fees, including an annual and monthly fee.

• Potential $700 credit limit

  With the Milestone Mastercard^®, you could end up with a credit limit as high as $700, which is solid for a credit-building card that doesn’t require a deposit. To get a credit limit this high with a secured credit card, you’d have to put down a $700 security deposit.

  Tip: Access to a higher credit limit can help you maintain a low credit utilization ratio, which is the second most important factor affecting your credit score.

• Reports to the three major credit bureaus

  The Milestone Mastercard^® reports your account and payment activity to the three major credit bureaus (Equifax, Experian and TransUnion). This is important if you’re looking to repair or build your credit, since payment history is the most important factor making up your credit score.

  Tip: You can check your credit score for free without negatively impacting your credit by using LendingTree Spring.

• Expensive fees that cut into your credit limit

  The Milestone Mastercard^® charges an annual fee in the first year over $100, and an annual fee over $40 after that (See terms). Not only is this an extremely high cost for a card with very few benefits, but the annual fee will be taken out of your initial line of credit. For example, if you’re granted a credit line of $700, your initial line of credit will be reduced to around $525.

  Additionally, you’ll have to pay a monthly maintenance fee of $0 the first year, then $150 annually billed at $12.50 each month. Once you factor in the annual fee, you could end up paying around $199 in fees annually after the first year.

  Tip: If you’re looking for a card to build credit there are plenty of options with no annual fee. For example, most secured credit cards come with no annual fee in exchange for a security deposit usually starting at around $200. You’ll get the deposit back when you pay off your balance and close the account or upgrade to an unsecured card.

  See all of the top credit cards with no annual fee.

• No clear path to increase your credit limit

  This card doesn’t specify if you’ll be able to increase your credit limit over time, but there are cards available that offer more clarity. For example, both the Capital One Quicksilver Secured Cash Rewards Credit Card and the Capital One Platinum Secured Credit Card will automatically begin reviewing your account in as little as six months to see if you’re eligible for a credit limit increase.

  Secured credit cards also provide more flexibility with your credit limit, since you can increase it by putting down a larger deposit.

• Extremely high APR — even for a credit-building card

  We found that the APR for the Milestone Mastercard^® is nearly 10 percentage points higher than average APR for credit cards. This means that if you don’t pay your balance in full each month, you’ll be hit with extremely high interest charges that can quickly add up.

  Instead, you should consider a credit-building card with a much more reasonable APR. For example, the Chase Freedom Rise® Credit Card has a 25.99% Variable APR, and the Discover it^® Secured Credit Card has a 27.24% Variable APR.

• No rewards program

  The Milestone Mastercard^® doesn’t come with a rewards program or sign-up bonus, which is pretty common for a credit-building card. But if you’re looking for the added bonus of earning rewards, there are credit cards geared toward lower credit scores that offer rewards programs.

  Those cards will likely be secured cards that require a deposit. For example, the Discover it^® Secured Credit Card offers elevated rewards on purchases at gas stations and restaurants. The Capital One Quicksilver Cash Rewards Credit Card also offers accelerated cash back on every purchase.

Milestone Mastercard^® vs. Discover it^® Secured Credit Card

The Discover it^® Secured Credit Card, which is our pick for the best secured card for building credit, is a much better option than the Milestone Mastercard^®. That’s because it charges a $0 annual fee, offers cash back on every purchase and has a lower APR.

The Discover it^® Secured Credit Card does require a refundable security deposit ranging from $200 to $2,500 — which will act as your line of credit. But Discover will automatically review your account starting at seven months to see if you can transition to an unsecured card and get your deposit back.

Milestone Mastercard^® vs. Capital One Quicksilver Secured Cash Rewards Credit Card

The Capital One Quicksilver Secured Cash Rewards Credit Card is another more affordable option than the Milestone Mastercard^®. Although you’ll be required to put down a refundable $200 security deposit to get a $200 initial credit line, there’s a $0 annual fee (see rates & fees) and you’ll be automatically considered for a higher credit line in as little as six months with no additional deposit needed.

You’ll also earn 1.5% Cash Back on every purchase, every day; 5% Cash Back on hotels and rental cars booked through Capital One Travel (terms apply).

Milestone Mastercard^® vs. Chase Freedom Rise® Credit Card

The Chase Freedom Rise® Credit Card provides significantly more value than the Milestone Mastercard^®, thanks to its $0 annual fee and solid rewards program. It’s an unsecured credit card, so you won’t be required to put down a deposit. But, you’ll need good / excellent credit to qualify for the card.

After six months of owning the card, Chase will evaluate your account to see if you’re eligible for a credit line increase. You’ll also get additional benefits that other credit-building cards don’t typically offer, like purchase and travel protections and shopping benefits.

If you want to repair or build your credit with the help of an unsecured credit card, the Milestone Mastercard^® is an option. But because of its exceptionally high fees and APR, we don’t recommend it. Instead, you should consider the Chase Freedom Rise® Credit Card, which has a $0 annual fee. Or, choose a secured credit card with a $0 annual fee, like the Discover it^® Secured Credit Card or Capital One Quicksilver Secured Cash Rewards Credit Card (see rates & fees).

We devote a large part of the score for credit-building cards to features that help build credit — we want to help you locate cards that don’t cost a lot to own and get help you upgrade to better card offers.

• Annual savings (50% of rating): We calculate how much the average cardholder can save with the card on a yearly basis. If it is a rewards card, we use U.S. Bureau of Labor data and $300 in monthly spend (the typical starting credit limit for an introductory card) to calculate how much the average cardholder can earn in rewards. We then subtract fees — including annual fees and maintenance fees — from this amount.
• Credit building features (50% of rating): We give points for features that help build credit, including reports to all three credit bureaus, regular account reviews for card upgrades and free credit score access. We detract points for features that can be costly to cardholders trying to build credit, such as security deposits, penalty APRs and late payment fees.

Note, that our ratings are a starting point for comparing and choosing the best credit card for building credit. However, your needs may be different from the average cardholder. You should consider the amount you’re likely to spend in a card’s bonus categories and which benefits you value to choose the best card for you.