Milestone Mastercard Review: An Expensive Way to Build or Repair Credit

The Milestone Mastercard® is an unsecured credit card designed to help you build credit. But it's not cheap. The card has a potentially high annual fee, along with monthly fees that could cost as much as $19.25 monthly ($231 annually). 

The card has no special perks to offset this fee, such as rewards or cash back, and its high APR is unforgiving for those who carry a balance. To put it plainly, it should be a last resort card for credit builders, as there are plenty of better options out there. With that in mind, let's dig deeper into this card's multiple cardholder agreements to see what it offers. 

Top perks

The Milestone Mastercard® has a few perks worth noting. 

No security deposit 

Most secured credit cards require a security deposit, usually equal to your credit limit. For instance, if your credit card had a $200 credit limit, you would normally put down a refundable $200 upfront to use the card. This collateral makes up for the fact that you have no or bad credit, making it less risky for the credit card company. 

The problem with security deposits is that sometimes you don't have $200 to spare for a credit card. This is where the Milestone Mastercard® shines. Unlike secured credit cards, this card for bad credit doesn't require a security deposit. Though you'll have to pay an annual fee (more on that below), you won't have to put down collateral to use your card. 

Potentially high credit limits 

As we'll discuss below, the Milestone Mastercard® has multiple cardholders agreements, which makes it difficult to talk generally about its features. 

That said, some versions of this card have unbelievably high credit limits, especially for one that doesn't require a minimum deposit. For example, under Agreement 318, your credit card could have a $700 credit limit, while Agreement 329 has a credit limit of $1,000. Others have credit limits of $300, however, which is standard for a secured credit card. 

Reports to major credit bureaus

Any credit-building activities you do on the Milestone Mastercard® -- whether that's paying bills on time or keeping your credit utilization low -- will be reported to Equifax, Experian, and TransUnion. While pretty much all credit cards report to credit bureaus, it's good to know this card does, too. 

Prequalify before you apply 

The Milestone Mastercard® lets you prequalify without hurting your credit score. You'll enter your information and get an offer within seconds. Not only can you find out if you qualify, but you can also find out your annual fee (more annual fees below). 

What could be improved

In sum, a lot could be improved. While the card could help you build credit, it can also throw you in a maelstrom of debt. Before you apply, here are some weaknesses to consider. 

Potentially expensive annual fee 

I have a lot of issues with the Milestone Mastercard®, but my biggest grievance is the annual fee. Depending on your creditworthiness, you could pay an annual fee between $35 and $175 to use this card. 

Many of the best credit cards for bad credit simply don't charge an annual fee, or, if they do, it's often low, like $35. The Milestone Mastercard® tries to smooth over these high fees by eliminating the security deposit. But truthfully, over the long run, paying a high security deposit might put you in a better situation than paying high annual fees. That security deposit is still your money and -- so long as you pay your bills -- it will eventually come back to you, whereas an annual fee is nonrefundable. 

To be clear, paying an annual fee for a credit card isn't always a drain on your finances, as some credit cards offset the fee by packing in extra perks and rewards. But the Milestone Mastercard® is devoid of perks and rewards. It's a bare-bones unsecured card that does what many secured credit cards do at a potentially high cost. It's a last-ditch effort, and definitely not the first credit-building card you should apply for. 

Multiple credit card agreements 

If you're looking at the Milestone Mastercard®'s website, you won't find any details on annual or monthly fees. It's hard to justify hiding these details, but one explanation is that the Milestone Mastercard® comes in various forms. In fact, according to Milestone's website, there are at least 17 different account agreements for this card, each varying in annual fee, monthly fee, and APR. 

To give you an idea of how these cardholder agreements work, let's look at one called Agreement 337. Under this agreement, the Milestone Mastercard® has an annual fee of $175 the first year; $49 thereafter. Starting in your second year, you'll pay a monthly fee of $12.50 ($150 annually). Assuming you have the card for the full second year, you'll pay $199 in total. Between your first and second year, you'll pay $374 in annual and monthly fees -- a full $174 more than the $200 security deposit that most secured credit cards require. 

That's simply way too much for a credit card designed to help you build credit. And again -- you won't know your agreement until you apply. 

Outrageous monthly fee 

If you thought paying an annual fee was bad enough, brace yourself. Depending on which Milestone Mastercard® you get (more on that below), you may also pay a monthly fee on top of it. 

The fee varies by cardholder agreement. In some agreements, you won't pay the monthly fee in your first year, but then you'll have to start paying it starting in your second. Other agreements will waive the annual fee, but will charge you a monthly fee that is almost as costly. 

For example, in one version of this card (Agreement 339), you don't pay an annual fee, but you'll pay a $14.50 monthly fee ($174 annually) for the first year and $19.25 monthly ($231 annually) thereafter. Assuming you have this card for a year, you're still paying an enormously high annual fee, even if it's charged to you by the month. 

No rewards 

You'd think a card with annual and monthly fees would at least give you a chance to earn points. Not so. Unlike other credit cards, the Milestone Mastercard® doesn't earn cash back or rewards. 

Potentially high APR

The APR on this card is 35.90%. That's extremely high and could put you deep into credit card debt.  

Since this is a credit card designed for credit building, there's no minimum credit score required. You can potentially qualify with bad or no credit. Of course, that doesn't mean you're guaranteed a credit card approval. But it does widen the entry for more applicants, especially those building or repairing a low FICO® Score. 

• You've applied for other secured credit cards and have had no luck in getting approvals 
• You want to build or repair your credit 
• You've prequalified and reviewed your annual fee

Our credit card methodology

At The Motley Fool Ascent, we rate credit cards on a five-star scale (1 = poor, 5 = best). Our rating criteria includes rewards rates, welcome bonuses, fees, and perks like travel credits and 0% intro APR offers to evaluate our ratings.

We combine these factors with an evaluation of brand reputation and customer satisfaction to ensure you're getting the best card recommendations. Learn more about how The Ascent rates credit cards.