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Milestone Credit Card: 5 Important Things to Know

The world of credit cards is broad and diverse, offering options for every type of customer. The Milestone credit card might seem like an escape for those with poor credit histories. However, before making any financial commitment, it’s important to read the small print carefully.

The Milestone credit card isn’t necessarily the pinnacle of options among credit-building cards, despite what its name suggests.

This post will go over five important details concerning the Milestone credit card, including its features, costs, advantages, potential drawbacks, and many more things you must check out!

1. Multiple Milestone Credit Cards With Annual Fees

The Milestone credit card doesn’t offer a whole package with lots of features. Rather, there are several versions of this card, and which one you get depends on how good your credit is. You won’t be able to determine which version you are eligible for until you submit Milestone’s pre-qualification application.

We have listed here several popular Milestone credit cards:

  • Milestone Mastercard 300: This card carries an annual fee of $35.
  • Milestone Mastercard 301: For the first year, this card has an annual fee of $75, which jumps to $99 for the following years.
  • Milestone Mastercard 322: The annual fee for this version is $59.

A $35 annual fee for an unsecured credit card intended for those with bad credit might seem reasonable, but there is an exception. Consumers might only be qualified for the versions with higher annual costs based on their creditworthiness. 

It should be noted that the Milestone card is less appealing in this sense because there are credit cards available for people with bad credit that don’t have an annual fee.

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2. Additional Costs to Consider

The Milestone credit card may not be stopped at its annual fee. In fact, there are about 20 other versions of the card that may be obtained through direct offers or particular websites. Also, they might vary greatly from the versions that are frequently marketed. While some cards have restricted benefits, others have a range of additional costs:

  • Some cards may cost you around $175 in the first year.
  • At the time this article is being written, the APR (Annual Percentage Rage) can reach 35.9%.
  • Apart from the annual price for the card, some Milestone credit cards also charge a monthly fee, which is frequently referred to as a “Maintenance Fee,” which can total up to $150 per year.

The fees on Milestone credit cards can vary greatly, and some of them might not be in line with your financial goals. So, it’s important to exercise caution while selecting one. If you go above your credit limit, you could potentially be charged overlimit fees of up to $40.

Several other credit cards do not charge overlimit fees or allow spending above the credit limit in the first place, despite Milestone’s claim that you can choose for “overlimit coverage” to avoid this expense. 

For those with bad credit scores, alternative credit cards with lower fees and perhaps better conditions, like the Petal® 1 “No Annual Fee” Visa® Credit Card or the Discover it® Secured Credit Card, 

For people with poor credit, alternative credit cards with lower fees and perhaps better terms, like the Petal® 1 “No Annual Fee” Visa® Credit Card or the Discover it® Secured Credit Card, offer competitive options.

3. Low Credit Limits

The Milestone credit card has some notable drawbacks, including its low credit limit availability. The credit limit is normally set at $3000 for all three versions that can be acquired directly from the Milestone website. For some cardholders, this amount might not be sufficient to pay a month’s worth of necessities, which raises the risk of being charged an overlimit fee.

Also, the annual fee of your Milestone credit card lowers your actual credit limit. Like, if you hold the Milestone credit card with a $300 credit limit and a $75 annual fee in the first year, your available credit essentially drops to $225 until the annual charge is paid. As a result, your credit utilization ratio, an important component of credit scoring, starts at 25%, which is higher than the recommended minimum of 30%.

If you’re looking for larger credit limits, consider secured credit cards like the Capital One Quicksilver Secured Card Rewards Credit Card, which can offer credit limits of up to $3,000 depending on the deposit amount.

4. Some Positives to Consider

The Milestone credit card has some disadvantages, but it also provides a lot of benefits, especially for those with bad credit. We have listed here a few of the Milestone card’s benefits, let’s learn one by one:

No Security Deposit: Milestone credit cards are unsecured, which means they don’t call for a security deposit, unlike many other credit cards marketed for people with bad credit.

Widely Recognized: Since Milestone credit cards are issued as Mastercards, they are accepted by the majority of businesses, offering cardholders access to a wide range of services.

Credit Building: Milestone credit cards notify the three major credit agencies about your credit activity. It allows you to establish or restore your credit history. For users, trying to boost their credit score, this is quite important.

5. Cancelling the Milestone Credit Card

Anyone can cancel their Milestone card if they discover that it may no longer meet their financial objectives or if they’ve found a better credit card solution. However, it’s crucial to comprehend the procedure and any potential consequences.

Cancel Before Usage: Preferably, you should cancel the card before using it for any transactions or cash advances. Milestone cards in this case will refund your annual charge.

Pay of the Balance: If the card has already been used, you must settle the balance before canceling the card.

Effect on Credit Scores: If you cancel your card, it will temporarily lower your credit ratings, especially, due to the hard inquiry was conducted when you applied for the card. However, if the costs and terms of the Milestone card do not match your financial objectives, the short-term drop can be justified by long-term savings.

Final Thoughts

The Milestone credit card can help those with bad credit build their credit, but it has a few limitations. Users must carefully consider whether this fits their financial needs and goals due to its multiple versions with varying costs, low credit limits, and the risk of additional expenses.

Although the Milestone credit card has perks like no security deposit and the chance to develop credit, there are other options on the market that can provide better conditions, reduced costs, and bigger credit limits. In the end, a thorough evaluation of your financial status and requirements, along with a comparison of the card’s advantages and disadvantages, should serve as the basis for deciding whether to keep or cancel the Milestone credit card.

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