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Milestone® Mastercard® Review: An Honest Look at the Pros and Cons

What is the Milestone® Mastercard®?

The Milestone® Mastercard® is a credit card aimed at helping people with poor or limited credit history build or rebuild their credit. It’s an unsecured card, meaning you don’t need to put down a security deposit to get approved. This can be a major advantage over secured credit cards for those who don’t have the upfront cash for a deposit.But as with most things in life, the Milestone card comes with its own set of trade-offs. In this review, we’ll take an honest look at the good, the bad, and the ugly of this credit-building option. Buckle up, folks – it’s gonna be a wild ride!

The Good Stuff

Let’s start with the positives, shall we? After all, no one likes a Negative Nancy.

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No Security Deposit Required

As mentioned, one of the biggest draws of the Milestone® Mastercard® is that it doesn’t require a security deposit. This can be a game-changer for those who don’t have a few hundred bucks lying around to put down as collateral.

Potential for Credit Limit Increases

While the Milestone card starts with a relatively low credit limit of $700 (more on that later), there is the potential for limit increases down the line. Of course, this depends on your responsible use of the card and your overall credit profile, but it’s still a nice possibility.

Reports to Major Credit Bureaus

Another plus is that the Milestone® Mastercard® reports your payment history and account information to the three major credit bureaus: Experian, Equifax, and TransUnion. This means that if you use the card responsibly, it can help improve your credit score over time.

The Not-So-Good Stuff

Now, let’s talk about the downsides of the Milestone® Mastercard®. And trust me, there are a few doozies.

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High Fees

Ah, fees – the bane of every credit card user’s existence. And the Milestone card is no exception. In fact, it’s kind of an overachiever in this department.First up, there’s the annual fee. Depending on your creditworthiness, this can range from $35 to a whopping $99. And that’s just the beginning.There’s also the potential for a monthly fee of up to $12.50 after the first year. Yep, you read that right – a monthly fee on top of the annual fee. It’s like they’re trying to nickel-and-dime you to death.Oh, and let’s not forget about the over-limit fee of up to $41 if you happen to go over your credit limit. Because why not add insult to injury, right?

Low Credit Limit

Remember that $700 credit limit we mentioned earlier? Well, that’s the maximum you’ll get with the Milestone® Mastercard®. And if you’re stuck with one of the higher annual fees, that limit gets even lower after the fee is deducted.A low credit limit can be a double-edged sword. On one hand, it can help prevent you from overspending and racking up too much debt. But on the other hand, it can also make it harder to keep your credit utilization ratio (the amount of credit you’re using compared to your total available credit) in a healthy range.

 High APR

Let’s talk about the elephant in the room: the Milestone® Mastercard®’s APR (Annual Percentage Rate). Brace yourselves, folks, because it’s a doozy.We’re talking a variable APR that can reach as high as 35.9%. That’s higher than the national average for credit cards, which is around 24% according to data from the Federal Reserve.Now, if you’re the type of person who always pays their balance in full and on time, the APR might not be a huge concern. But if you tend to carry a balance from month to month, those interest charges can really add up and make it harder to get out of debt.

Is the Milestone® Mastercard® Right for You?

So, should you apply for the Milestone® Mastercard®? Well, that depends on your specific situation and goals.If you’re in dire need of a credit card to help build or rebuild your credit history, and you don’t have the cash for a security deposit, the Milestone card could be worth considering. Just be prepared for those high fees and that less-than-ideal credit limit.On the other hand, if you have the means to put down a security deposit, you might be better off looking into a secured credit card. These tend to have lower fees and more favorable terms, even if they require that upfront deposit.And if you’re someone who struggles with carrying a balance, the Milestone® Mastercard®’s high APR could end up costing you a pretty penny in interest charges. In that case, you might want to explore other options or work on paying down existing debt before taking on a new credit card.

 Alternatives to the Milestone® Mastercard®

If the Milestone® Mastercard® doesn’t sound like the right fit for you, don’t worry – there are plenty of other options out there. Here are a few alternatives to consider:

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Secured Credit Cards

As mentioned earlier, secured credit cards can be a great choice for those looking to build or rebuild their credit. Some popular options include the Capital One Secured Mastercard and the Discover it® Secured Credit Card.With these cards, you’ll need to put down a refundable security deposit (typically between $200 and $500), but you’ll often get more favorable terms and lower fees than unsecured cards like the Milestone.

Credit-Builder Loans

Another option to consider is a credit-builder loan. These are essentially loans where the money is held in an account while you make payments, and the payment history is reported to the credit bureaus.Once you’ve made all the payments, you get the money back (minus any fees or interest charges). It’s a bit of an unconventional approach, but it can be a great way to build credit without taking on traditional debt.Some popular credit-builder loan options include those offered by Self Lender and Credit Strong.

Alternative Credit Cards

If you’re not quite ready for a traditional credit card or loan, there are also alternative credit cards to consider. These are often aimed at helping people with little to no credit history get started.One example is the Petal® 2 Cash Back, No Fees Visa® Credit Card, which uses alternative data (like your income and banking history) to determine your eligibility and credit limit.Another option is the Chime Credit Builder Visa® Credit Card, which is designed to help you build credit by making on-time payments on a small credit line.

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Tips for Using the Milestone® Mastercard® Responsibly

If you do decide to go with the Milestone® Mastercard®, it’s important to use it responsibly to maximize its credit-building potential. Here are a few tips to keep in mind:

 Make Payments on Time, Every Time

This one should go without saying, but it’s worth repeating: make your payments on time, every single month. Payment history is the biggest factor in your credit score, so even one late payment can do some serious damage.

 Keep Your Credit Utilization Low

Credit utilization – the amount of credit you’re using compared to your total available credit – is another major factor in your credit score. Experts generally recommend keeping your utilization below 30% (and the lower, the better).With the Milestone® Mastercard®’s low credit limit, it can be easy to accidentally max out your utilization. So, be mindful of your spending and try to keep your balance as low as possible.

 Monitor Your Credit Reports

It’s always a good idea to keep an eye on your credit reports from the three major bureaus (Experian, Equifax, and TransUnion). You can get free copies of your reports once a year from AnnualCreditReport.com.Check your reports regularly to ensure that the information being reported by the Milestone® Mastercard® (and any other accounts) is accurate. If you spot any errors, dispute them right away.

Have a Plan for Graduating to a Better Card

While the Milestone® Mastercard® can be a useful tool for building credit, it’s not necessarily a card you’ll want to keep forever. Those high fees and that low credit limit can become a real drag once your credit improves.So, have a plan in place for eventually “graduating” to a better credit card with more favorable terms. This could mean applying for a different unsecured card or even a rewards card once your credit score reaches a certain threshold.

 Final Thoughts on the Milestone® Mastercard®

At the end of the day, the Milestone® Mastercard® is a bit of a mixed bag. On one hand, it can be a lifeline for those struggling to get approved for other credit cards due to poor or limited credit history. But on the other hand, those high fees and that less-than-ideal credit limit can make it a tough pill to swallow.If you do decide to go with the Milestone card, just be sure to use it responsibly and have a plan for eventually moving on to better credit products once your credit improves. And if the fees and terms don’t seem worth it to you, don’t be afraid to explore other credit-building options.No matter what you decide, just remember: building (or rebuilding) your credit is a marathon, not a sprint. Stay patient, stay disciplined, and keep your eye on the prize – a healthy credit score that opens doors to better financial opportunities down the road.

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