Milestone is a starter card for people rebuilding credit, but it comes with a high annual fee and limited rewards
Milestone Credit Card is issued by Milestone Bank and marketed to people with limited credit history or past credit problems. It reports to all three credit bureaus, which means on-time payments can help rebuild your credit score. The card charges a $95 annual fee with no rewards program, no sign-up bonus, and a variable interest rate that starts around 24% APR — typical for cards aimed at this market.
Whether Milestone makes sense for you depends on what you're trying to do. If you need to prove you can handle credit responsibly and you're willing to pay the annual fee, it can work. If you're looking for rewards or a low-cost way to build credit, other cards or secured alternatives may serve you better.
Key Takeaways
- Milestone reports to all three credit bureaus, so consistent on-time payments show up on your credit report and can help raise your score over time.
- The $95 annual fee is non-refundable and applies whether you use the card or not, making it expensive relative to the benefits offered.
- The card has no rewards, no cash back, and no sign-up bonus, so you pay the fee purely for the credit-building function.
- Your credit limit starts low (typically $200 to $1,000) and may increase after six months of on-time payments, but the card itself does not may provide a limit increase.
- Secured credit cards from other issuers often charge lower or no annual fees and offer the same credit-building benefit at lower cost.
How the annual fee compares to other starter cards
The $95 annual fee is the card's biggest drawback. Many secured credit cards — which also target people rebuilding credit — charge no annual fee at all. Capital One Secured and Discover Secured, for example, have zero annual fees and report to all three bureaus just like Milestone does.
If you're paying $95 per year for a card with no rewards, no bonus, and a high interest rate, you're essentially paying for the privilege of proving you can pay on time. That's a real cost, and it matters if you're on a tight budget. The fee renews every year, so if you keep the card open for five years, you'll have paid $475 just in annual fees.
Some people justify the fee by saying the card helped them rebuild credit faster, but there's no evidence that Milestone builds credit meaningfully faster than a no-fee secured card. Both report to all three bureaus. Both help if you pay on time. The difference is Milestone costs more.
When Milestone might make sense for you
Milestone works if you meet two conditions: you need a credit card right now, and you cannot get approved for anything else. If you've been turned down for secured cards or other starter cards, Milestone may still approve you because it has looser approval standards. Some people with very recent negative marks or very thin credit files find Milestone is the only card that will take them.
The card also works if you're disciplined about paying in full every month and you plan to use it for small, regular purchases. Each on-time payment reports to the bureaus, and after 6 to 12 months of perfect payment history, you may become may be able to access for cards with better terms. Milestone then becomes a stepping stone rather than a permanent card.
If you fall into this category, the $95 fee is a cost of entry into the credit system. It's not ideal, but it's a known cost, and you can plan around it. Just don't expect the card to reward you for using it — it won't.
The interest rate and how it affects you
Milestone's variable APR typically starts around 24% and can go higher depending on market conditions and your creditworthiness. That's high, but it's standard for unsecured cards aimed at people with credit problems. The rate can change quarterly based on the prime rate.
The high rate matters only if you carry a balance. If you pay the full statement balance every month, you pay no interest at all, and the APR is irrelevant. But if you miss a payment or carry a balance, the interest charges pile up fast. A $500 balance at 24% APR costs you about $10 per month in interest alone — on top of the $95 annual fee.
This is why Milestone only makes sense if you can commit to paying in full every month. If you're not confident you can do that, a secured card with a lower credit limit (which forces you to spend less) might be safer.
Credit limit increases and how they work
Milestone starts you with a credit limit between $200 and $1,000, depending on what the bank approves you for. After six months of on-time payments, you may become may be able to access for a limit increase, but the bank doesn't automatically raise it. You have to request an increase, and the bank will review your account and credit report before deciding.
A higher limit helps your credit score in two ways: it lowers your credit utilization ratio (the percentage of your limit you're using), and it shows lenders you've proven yourself responsible. But Milestone doesn't may provide increases, and some cardholders report that increases come slowly or not at all.
If building credit quickly is your goal, a secured card where you control the limit (by depositing cash) might be faster. You deposit $200 to $2,500, and that becomes your credit limit when ready. No waiting six months to ask for an increase.
How Milestone compares to secured cards
A secured credit card requires you to put down a cash deposit, which becomes your credit limit. You use the card like a regular card, and the deposit sits in a savings account as collateral. After 6 to 18 months of on-time payments, most issuers convert the card to unsecured and return your deposit.
The key differences: secured cards usually have no annual fee, your credit limit is set when ready (not after six months), and you get your deposit back once you've proven yourself. Milestone has a $95 annual fee, a lower starting limit, and no deposit to reclaim.
For most people rebuilding credit, a secured card is the better choice. Capital One Secured, Discover Secured, and OpenSky all report to the bureaus, cost nothing annually, and work the same way Milestone does. The only reason to choose Milestone is if you can't get approved for a secured card — which is possible, but not common.
What happens if you miss a payment
Missing a payment on Milestone has the same consequences as missing a payment on any credit card: the late payment reports to all three credit bureaus and damages your score. A 30-day late payment typically drops your score by 100+ points. A 60-day or 90-day late payment is even worse.
Milestone also charges late fees (typically $25 to $35 for the first late payment, higher for subsequent ones) and may raise your APR as a penalty. If you miss a payment by more than 60 days, the bank may close your account and send the debt to collections.
This is why the card only works if you're confident you can pay on time every month. If you're struggling with cash flow or have a history of missed payments, Milestone is not the right card. A secured card with a lower limit might be safer because it forces you to spend less and reduces the risk of carrying a balance you can't pay.
Frequently Asked Questions
Does Milestone report to all three credit bureaus?
Yes. Milestone reports to Equifax, Experian, and TransUnion, so your payment history shows up on all three of your credit reports. This is one of the card's strengths — every on-time payment helps your score across the board.
Can I get my annual fee back if I close the card?
No. The $95 annual fee is non-refundable. If you close the card after one year, you've paid $95 for that year of credit-building and you don't get it back. This is why it's important to decide upfront whether the fee is worth the benefit to you.
What's the difference between Milestone and a secured card?
Milestone is unsecured (no deposit required) but charges a $95 annual fee and has a lower starting limit. Secured cards require a deposit but usually charge no annual fee and give you an when ready credit limit equal to your deposit. For most people, secured cards are cheaper and faster.
Will Milestone convert to a regular card after I build credit?
Milestone doesn't convert. It stays a Milestone card as long as you hold it. After you've built credit with Milestone, you can explore for other cards with better terms and close Milestone if you want to stop paying the annual fee.
What credit score do I need to get approved for Milestone?
Milestone doesn't publish a minimum credit score requirement. The bank approves people with limited credit history, recent negative marks, or low scores — situations where other cards would decline you. If you're unsure whether you'll be approved, you can check without a hard inquiry on the Milestone website.