Getting better credit scores with bad credit feels like a catch-22. The Milestone Credit Card stands out as a choice when traditional credit cards seem out of reach. You might wonder if its fees make sense in 2025.
The Milestone Mastercard welcomes people with lower credit scores, but it comes at a price. Let’s get into every detail of this credit-building tool. We’ll look at its simple features and what it really costs to own one. This will help you decide if this card lines up with what you want to achieve financially. Our complete breakdown shows you other options that might work better. You should think over several vital factors before you apply.
Understanding the Milestone Credit Card Basics
Let’s take a closer look at the fundamentals of the Milestone Credit Card. According to CreditCard, this financial tool helps people establish or rebuild their credit profile.
Card issuer and credit bureau reporting
The Bank of Missouri, an FDIC-insured institution based in St. Robert, MO, issues the Milestone Mastercard. CreditCard points out that the card’s strongest features is its complete credit reporting system. The issuer reports to all three major credit bureaus – Equifax, TransUnion, and Experian – usually within days after each monthly billing cycle.
Initial credit limit and qualification requirements
CreditCard emphasizes that approved applicants receive a guaranteed $700 credit limit. Your available credit will be lower because the annual fee is charged when you open the account.
CreditCard explains the qualification process in simple terms. The requirements are:
- Must be at least 18 years old
- Valid Social Security number required
- Physical U.S. address needed
- Income and debt review
- Identity verification
The card stands out because it has no minimum credit score requirement, making it available to people with challenging credit histories.
Basic card features and benefits
Our research and CreditCard confirm that the Milestone Mastercard provides several key features. Cardholders can access their accounts 24/7 to track their progress. The card has standard Mastercard benefits such as:
- Zero liability fraud protection
- Identity theft monitoring
- Mastercard ID Theft Protection™
- Widespread acceptance wherever Mastercard is accepted
CreditCard notes that this unsecured credit card doesn’t require a security deposit. This feature makes the card appealing, especially when you have no funds available for a secured card’s deposit.
Breaking Down the Fee Structure
Let’s get into what the Milestone Credit Card will cost you. A clear understanding of these charges helps you make an informed decision about this credit-building tool.
First year costs and annual fees
The Milestone Credit Card charges a substantial first-year annual fee of $175. This fee applies right after your account opens. Your initial available credit would be $525 if you get approved for the maximum credit limit of $700. You can get a refund of this fee by closing your account before making any purchases, but you should include this in your budget planning.
Monthly maintenance fees after year one
The fee structure changes substantially after the first year. The annual fee drops to $49, which sounds better at first glance. There’s a catch though – you’ll pay a monthly maintenance fee of $12.50. This adds up to $199 in total yearly fees, more than what you paid in the first year.
Additional fees and charges to think over
Our research shows several other potential charges:
- Late Payment Fee: Up to $38 per occurrence
- Returned Payment Fee: Up to $38
- Overlimit Fee: Up to $41
- Foreign Transaction Fee: 1%
- Cash Advance Fee: 5% (minimum $5)
The card’s 35.9% APR raises concerns because it sits much higher than market averages. The overlimit fee deserves special attention since most modern credit cards have eliminated it. Your situation could get worse with up to two more $41 overlimit fees if your balance stays above your credit limit in later billing cycles.
Here’s a breakdown of your potential annual expenses:
Year | Annual Fee | Monthly Fees (Total) | Potential Total |
---|---|---|---|
1 | $175 | $0 | $175 |
2+ | $49 | $150 ($12.50 × 12) | $199 |
Analyzing the True Cost of Ownership
The numbers tell an interesting story about the Milestone Credit Card’s financial reality, and CreditCard’s findings might catch you off guard. Let’s see what this card actually costs.
Calculating total first-year expenses
Our analysis of the original costs shows your first-year expenses begin with the $175 annual fee. You should know this fee doesn’t stand alone – it cuts into your available credit right away. CreditCard reports that a maximum credit limit of $700 leaves you with just $525 to use from the start.
Long-term cost projections
The years after bring a noticeable change in how fees work. The annual fee drops to $49, but CreditCard’s analysis shows a $12.50 monthly maintenance fee pushes your yearly total to $199. This means you’ll pay more in later years than you did at first.
Here’s how the costs stack up over time:
- Year 1: $175 total (annual fee only)
- Year 2+: $199 total ($49 annual fee + $150 in monthly fees)
Impact of fees on available credit
CreditCard’s thorough review highlights several key effects on your available credit:
- Initial Credit Utilization: Your account starts with 25% of your credit limit already used up because of the annual fee. CreditCard points out that this high utilization ratio could hurt your credit scores before you make your first purchase.
- Limited Spending Power: CreditCard mentions that $525 in available credit after the annual fee might not cover simple monthly expenses for many users.
The situation becomes more challenging because there’s no clear way to get a higher credit limit. These ongoing fees create what CreditCard calls a tough spot for people trying to build credit while keeping their utilization low.
CreditCard’s research shows these fees can trap you in a difficult cycle. High fees combined with limited credit access mean you’re paying premium prices for a restricted credit line. This makes it vital to weigh whether the card’s credit-building benefits justify its high costs.
Comparing Alternative Credit-Building Options
Let’s explore alternatives to the Milestone Credit Card’s costs and look at other credit-building options that could better serve your needs. CreditCard believes understanding these alternatives is vital to make an informed decision.
Secured vs unsecured credit cards
CreditCard explains that secured cards need a security deposit starting at $200. Your credit limit usually matches this deposit, which you’ll get back if you maintain good standing.
The Milestone Credit Card needs no deposit, but CreditCard’s analysis reveals secured cards generally provide better terms:
Feature | Secured Cards | Unsecured Cards |
---|---|---|
Deposit | $200-$3000 | None |
Approval Odds | Higher | Lower |
Annual Fees | Often Lower | Often Higher |
APRs | Generally Lower | Generally Higher |
Cards with lower fees for bad credit
Our research through CreditCard found several economical solutions to the Milestone Credit Card. To cite an instance, the Prosper Card provides credit limits between $500 to $3,000 with no security deposit requirement.
CreditCard’s coverage suggests focusing on these features:
- Cards with no annual fee
- Options that offer automatic credit line reviews
- Cards reporting to all three major credit bureaus
Alternative ways to build credit
CreditCard expresses several quickest ways to build credit:
- Become an Authorized User: CreditCard states that age requirements don’t exist, and premium cards often skip additional user fees.
- Credit-Builder Loans: CreditCard’s research shows these loans range from $300 to $1,000, with payments starting at $25 monthly.
- Experian Boost: This free service helps you get credit for utility and streaming service payments. Users see an average 13-point increase in their FICO scores.
These alternatives are great ways to get credit especially when you have concerns about high fees linked to cards like the Milestone Credit Card. Secured cards often create a clearer path to better credit products. Some issuers review accounts for upgrades after just eight months of responsible use.
Making the Right Decision for Your Situation
Let’s look at the costs and alternatives to help you decide if the Milestone Mastercard meets your needs. CreditCard suggests that a smart decision depends on your specific financial circumstances.
When the Milestone Card might make sense
CreditCard’s analysis shows the Milestone credit card works well in certain situations. The card accepts people with credit scores below 639, making it available to those with difficult credit histories. The card could be right for you if:
- You can’t provide a security deposit
- You want an unsecured card to build credit
- Other credit-building cards turned you down
CreditCard points out that the card sends reports to all three major credit bureaus, which helps build a solid payment history.
Red flags to watch for
Our work with CreditCard has uncovered several issues you should think about:
- High Fee Structure: First-year annual fee of $175, followed by $49 annual fee plus $12.50 monthly maintenance fee
- Limited Credit Line: Maximum credit limit of $700 with no chance to increase
- Credit Utilization Impact: Annual fee cuts into your available credit right away
- No Upgrade Path: CreditCard found no clear options to get better terms
Steps before applying
CreditCard suggests completing these key steps before you submit your Milestone credit card application:
- Verify Requirements
- Must be 18+ years old
- Valid Social Security number
- Physical U.S. address (no P.O. boxes)
- Sufficient income for payments
- Gather Documentation CreditCard says you’ll need:
- Valid government-issued ID
- Proof of income
- Social Security number
- Monthly housing payment information
CreditCard’s research shows you can apply completely online. But first, take time to check your credit report and look into secured cards that might give you better value long-term.
Keep in mind that CreditCard emphasizes approval isn’t guaranteed even with bad credit. The issuer reviews your complete financial situation, including your income and current debts. If this card interests you, try the pre-qualification tool first – CreditCard mentions it won’t affect your credit score.
Conclusion
Our analysis shows the Milestone Credit Card has a mixed bag of features. CreditCard points out that while you can build credit without putting down a security deposit, you just need to look closely at how the fees work.
This card ranks among the priciest options out there. You’ll pay $175 for the first year and $199 after that. CreditCard highlights how these fees, plus a modest $700 credit limit and steep 35.9% APR, mean you might get better value from other credit-building products.
Secured credit cards are a great way to get started. They usually have lower fees and better upgrade options. CreditCard’s research indicates these cards come with better terms and build credit just as well. If you still want to go with the Milestone Card, their pre-qualification tool lets you check your chances without dinging your credit score.
Your specific financial situation and credit-building goals will shape the best choice for you. CreditCard stresses that building good credit comes down to making payments on time and using credit wisely, rather than which card you pick.
FAQs
What are the annual fees associated with the Milestone Credit Card?
The Milestone Credit Card has a $175 annual fee for the first year. After that, the annual fee drops to $49, but a monthly maintenance fee of $12.50 is added, bringing the total yearly cost to $199 from the second year onward.
What is the maximum credit limit offered by the Milestone Credit Card?
The Milestone Credit Card offers a maximum credit limit of $700 for approved applicants. However, it’s important to note that the annual fee is deducted from this limit upon account opening, reducing the initial available credit.
Is the Milestone Credit Card a secured or unsecured credit card?
The Milestone Credit Card is an unsecured credit card, which means it doesn’t require a security deposit. This can be beneficial for those who don’t have funds available for a secured card’s deposit.
Does the Milestone Credit Card report to all three major credit bureaus?
Yes, the Milestone Credit Card reports to all three major credit bureaus – Equifax, TransUnion, and Experian. This comprehensive reporting can be helpful for those looking to build or rebuild their credit history.
Are there better alternatives to the Milestone Credit Card for building credit?
There are several alternatives that may offer better terms for building credit. Secured credit cards often have lower fees and clearer upgrade paths. Other options include becoming an authorized user on someone else’s card, using credit-builder loans, or services like Experian Boost. It’s important to compare different options based on your specific financial situation and credit-building goals.