Milestone Credit Reviewed

Credit cards are a common method of payment for retail, services, and other transactions. Some establishments have even gone cashless, requiring all patrons to pay with a card. However, for those who have had a bankruptcy or other credit problems, a credit card may be difficult to get. Many banks and credit unions will not approve applications from those with a poor credit history. Fortunately, there are options available, such as a Milestone credit card. This Mastercard allows those with a poor credit history to begin rebuilding their credit score; but consumers should know all the costs before applying.

An Overview of the Milestone Mastercard

For those with bad credit, there are two types of credit cards available to help them rebuild their credit score. The first type is a secured credit card. In this situation, the consumer would pay the bank a deposit before being issued the card. This ensures that the bank will not lose money if the consumer is unable to pay their credit card bill. Banks will often set the credit line for the card equal to the amount of the deposit paid by the consumer, so a 500 dollar deposit would warrant a card with a 500 dollar limit. This can vary, with some banks offering a higher credit line than the deposit.

For those with bad credit, there are two types of credit cards available to help them rebuild their credit score. The first type is a secured credit card. In this situation, the consumer would pay the bank a deposit before being issued the card. This ensures that the bank will not lose money if the consumer is unable to pay their credit card bill. Banks will often set the credit line for the card equal to the amount of the deposit paid by the consumer, so a 500 dollar deposit would warrant a card with a 500 dollar limit. This can vary, with some banks offering a higher credit line than the deposit.

However, what if the consumer is unable to pay a deposit? Or what if they decide that their money would be better used elsewhere than being tied up in a bank deposit? Then there is the other option: an unsecured credit card. For approved card holders, the bank will issue these cards without requiring a deposit. The Milestone credit card is an unsecured Mastercard and can be issued without a deposit from an applicant with poor credit. Although this appears superior to the secured option, there are costs associated with all unsecured cards, and the Milestone credit card is no exception.

Pros and Cons of the Milestone Mastercard

man holding a card
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The Milestone credit card offers consumers some excellent advantages. However, there are certain conditions that applicants should be aware of as well. Here is a list of the pros and cons.

Pros

Prequalification

Most credit cards will pull an applicant’s credit report, which leaves a hard inquiry on that report and slightly lowers the credit score. For most applicants, this is not a major concern. However, for those with a low credit score, every negative mark is significant. The Milestone credit card offers prequalification to applicants. This does not make a mark onto their credit report and will also tell the applicant if they are likely to be approved for this card. Although the prequalification is not a commitment to approve an application, it does provide more information to an applicant without any cost.

Reasonable APR

The annual percentage rate (APR) for a Milestone credit card is 24.9%. Although some secured cards may have lower rates, this is lower than many other unsecured cards.

No Processing Fees

Some unsecured cards charge a monthly fee or a transaction processing fee on top of the APR for the credit card. The Milestone credit card does not charge any of these fees, and all of its fees are typical to most credit cards.

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25-Day Grace Period

Like most credit cards, the Milestone Mastercard offers a 25-day grace period for consumers to pay their bill before interest is charged.

Mastercard Gold Protection

The Milestone Mastercard offers Gold benefits such as rental car insurance, price protection, and identity theft protection with zero liability. Applicants should research the benefits to see specific rules or limitations.

Low Foreign Transaction Fee

This Mastercard offers a 1% foreign transaction fee, lower than the typical 3% for many cards. This is another nice perk.

Cons

Annual Fee

Instead of requiring a deposit, the Milestone Mastercard charges users an annual fee. The amount can vary based on credit score, but it can start as low as 35 dollars per year. This can rise to 99 dollars for the second year. Annual fees are not uncommon for credit cards, but secured cards often have no annual fee, only requiring a deposit.

APR Can Increase

If consumers make a late payment, the APR can rise from 24.9% to 29.9%. This is a high APR for a credit card.

No Credit Line Increase

No matter how long a consumer keeps the Milestone Mastercard account open, the credit line will remain at its initial value. Many other cards, including secured credit cards, will increase the credit line over time.

What You Need to Know About Getting Milestone Credit

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This card treats consumers fairly but is also cautious. The card does not charge additional fees, has a low annual fee the first year, and offers a typical grace period. Also, the Mastercard gold perks are helpful. But since it is for those with poor credit, it contains features to influence the behavior of cardholders.

For consumers interested in this card, they should first know exactly how they ended up with poor credit. This card is designed for consumers to pay off the balance within the grace period each month. If consumers do so, their credit score will improve and they will hopefully qualify for a different credit card within a year. However, if consumers do not pay on time, not only will their APR rise, but their annual fee will rise as well. This makes the Milestone Mastercard operate like a one-year test for consumers. Good behavior results in moving up to a better product, but bad behavior brings higher costs.

Conclusion

The Milestone credit card exists for one purpose: to help a consumer rebuild their credit. The application is easy with the prequalification, and the annual fee can start at 35 dollars. This is for credit rebuilding, so the APR will rise with any late payment, encouraging prompt payment. Still, it is designed to be fair, with no processing fees and a 25-day grace period for payments. However, it is not designed to be a credit card with long term membership, as the annual fee will rise while the credit line will remain steady.

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