What the Milestones Credit Card Is
The Milestones Credit Card is a secured credit card issued by Capital One. You put down a cash deposit, and that deposit becomes your credit limit. You use the card like any other credit card — make purchases, receive a monthly bill, and pay it back. The difference is that Capital One reports your payment history to the three major credit bureaus (Equifax, Experian, and TransUnion), which means responsible use can help build or rebuild your credit score.
This card is designed for people who are new to credit, returning to credit after a gap, or rebuilding after past credit problems. It is not a prepaid card — you are not spending your own deposit. You are borrowing against it, and your payment behavior gets tracked and reported.
Key Takeaways
- Your cash deposit becomes your credit limit, ranging from $200 to $2,500 depending on what you deposit.
- Capital One reports your on-time payments to all three credit bureaus, which can raise your credit score over time.
- The card charges an annual fee (currently $39) and a higher interest rate than cards for people with established credit.
- After responsible use for several months, you may be invited to upgrade to an unsecured card, at which point your deposit is returned.
- You can deposit more money later to increase your credit limit, though you will pay an additional annual fee for each increase.
How Your Deposit and Credit Limit Work
When you open a Milestones account, you choose how much to deposit. Capital One accepts deposits from $200 to $2,500. Whatever you deposit becomes your credit limit — if you deposit $500, your limit is $500. You do not spend your deposit; it sits in a separate account that Capital One holds as security.
You can increase your credit limit by depositing additional money. If you deposit another $300 after your account is open, your new limit becomes $800. Each additional deposit triggers another annual fee, so a $500 deposit and a $300 deposit means you pay two annual fees.
After you have used the card responsibly for several months (Capital One does not publish an exact timeline), the company may invite you to convert to an unsecured card. At that point, your deposit is returned to you, and you keep the card with a new credit limit that Capital One sets based on your payment history.
Fees and Interest Rates
The Milestones card charges a $39 annual fee. This is charged once per year and appears on your statement. If you add additional deposits to increase your limit, each deposit incurs its own $39 annual fee.
The card's interest rate (APR) is currently 24.9%, which is higher than rates offered to people with good or excellent credit. If you carry a balance month to month, interest charges add up quickly. The best way to use this card is to pay your full statement balance each month, which means you pay no interest at all.
There is no foreign transaction fee if you use the card abroad, and there is no penalty APR (a higher rate triggered by a late payment). Late payments do get reported to the credit bureaus, however, which can lower your score.
How Payment History Affects Your Credit Score
Capital One reports your Milestones account activity to Equifax, Experian, and TransUnion every month. This means every on-time payment you make helps build your credit history. If you miss a payment or pay late, that also gets reported and can hurt your score.
Credit scoring models weight payment history heavily — it typically accounts for 35% of your score. Making on-time payments on the Milestones card for several months in a row is one of the fastest ways to raise a low score or build credit from scratch. The longer your account stays open and active, the more positive history accumulates.
Keep your balance low relative to your credit limit. If your limit is $500 and you carry a $450 balance, that high utilization ratio can drag down your score even if you pay on time. Aim to use less than 30% of your limit if possible.
When to Use the Milestones Card and When to Look Elsewhere
The Milestones card makes sense if you have no credit history, a very low credit score (below 580), or a recent negative event like a bankruptcy or foreclosure. It is one of the few cards available to people in these situations, and the reporting to credit bureaus means you can start rebuilding when ready.
If you already have a credit score above 650 and access to other cards, the 24.9% APR and $39 annual fee are not competitive. You would may have access to for better terms elsewhere. Similarly, if you cannot afford to deposit $200 upfront, this card is not an option — there is no way around the deposit requirement.
If you need a card for emergencies but plan to carry a balance, the high interest rate makes this card expensive. Use it only if you can pay your full balance each month, or if building credit is more important to you than minimizing interest charges in the short term.
Steps to Open a Milestones Account
You can open a Milestones account online through Capital One's website. You will need to provide your Social Security number, date of birth, income information, and current address. Capital One performs a hard credit inquiry, which temporarily lowers your score by a few points.
Once your process is reviewed (usually within minutes to a few hours), Capital One tells you whether you are approved and what deposit amount they recommend. You can choose to deposit that amount or a different amount between $200 and $2,500. You fund the deposit by linking a bank account or providing a debit card.
After your deposit clears (typically 1 to 3 business days), your card is activated and ready to use. You can request a physical card to arrive by mail, or you can add the card to your digital wallet when ready to start using it.
Moving Beyond the Milestones Card
The goal of a secured card is to graduate to an unsecured card. Capital One reviews your account periodically and may offer to convert your Milestones card to a regular Capital One card after you demonstrate consistent on-time payments. When this happens, your deposit is released back to you, and your new credit limit is set by Capital One based on your history with them.
You do not have to wait for Capital One to offer the upgrade. After 6 to 12 months of on-time payments, you can contact Capital One and ask to be considered for conversion. There is no may provide they will approve it, but asking does not hurt.
Once you have an unsecured card and your credit score has risen, you become may be able to access for other cards with better terms — lower APRs, higher limits, and rewards programs. At that point, you can close the Milestones card if you want, though keeping it open (even unused) helps your credit score by maintaining your account history length.
Frequently Asked Questions
Can I use my deposit if I need the money?
No. Your deposit is held separately and is not accessible while your account is open. It is returned only when you close the account or when Capital One converts your card to unsecured. If you need cash, you cannot withdraw from your deposit.
What happens if I miss a payment?
A missed payment gets reported to the credit bureaus and can lower your score significantly. Capital One may also charge a late fee (up to $40, depending on your balance) and increase your APR. If you miss a payment, contact Capital One as soon as possible to bring your account current.
Can I use this card internationally?
Yes. The Milestones card works abroad and has no foreign transaction fee. However, your bank or card issuer may charge a fee on the currency conversion itself, so check with Capital One before traveling.
How long does it take to build credit with this card?
You will see activity reported to the credit bureaus within 30 to 45 days of opening the account. Your score may start to rise after 2 to 3 months of on-time payments, though the improvement depends on your starting score and overall credit profile. Significant improvement typically takes 6 to 12 months of consistent use.
What if Capital One denies my process?
If you are denied, Capital One will tell you why. Common reasons include very recent bankruptcy, an active fraud alert, or an address mismatch. You can reapply after addressing the issue, or you can explore other secured card options from different issuers.