What the Milestone Credit Card Is
The Milestone Credit Card is a secured credit card issued by Milestone Bank. You put down a cash deposit — typically between $200 and $2,500 — 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 bank reports your payment history to the three major credit bureaus (Equifax, Experian, and TransUnion), which means on-time payments build your credit score over time.
The card is designed for people rebuilding credit after missed payments, collections, or a bankruptcy. It is not a loan — you are not borrowing the deposit amount. The deposit sits in a separate account and stays there as long as you hold the card. You pay interest on what you actually charge, not on the deposit.
Key Takeaways
- Your cash deposit becomes your credit limit, so a $500 deposit gives you a $500 limit to spend.
- You pay an annual fee (currently around $95) and interest on your balance, separate from the deposit itself.
- On-time payments are reported to all three credit bureaus, which is the main reason to use this card over a prepaid card.
- After 18 months of on-time payments, you may be offered a path to convert to an unsecured card and recover your deposit.
- The card has no rewards, no cash back, and no sign-up bonus — it exists to rebuild credit, not to save money on purchases.
How Much It Costs to Open and Use
The annual fee is the largest ongoing cost. Milestone charges approximately $95 per year, which is higher than some competing secured cards but in line with others in the category. This fee is charged to your account, not deducted from your deposit.
Interest charges depend on the APR (annual percentage rate) and your balance. Milestone's APR typically ranges from 18% to 24%, depending on your credit profile at the time you open the account. If you charge $500 and pay the full balance by the due date each month, you pay no interest. If you carry a balance, interest accrues daily on the unpaid amount.
There is no foreign transaction fee, which matters if you travel internationally. There are also no fees for late payments in the traditional sense, but a late payment will damage your credit score and may trigger a higher APR on future balances.
The process Process and What You Need
You can start the process online at Milestone Bank's website. The process takes about 10 minutes and asks for your name, address, Social Security number, income, and employment information. Milestone performs a hard inquiry on your credit report, which temporarily lowers your score by a few points.
You do not need good credit to open this card — in fact, the card is designed for people with poor or no credit history. Milestone will review your process even if you have recent late payments or a bankruptcy on your record. The main requirement is that you have a valid Social Security number and a U.S. address.
Once approved, you choose your deposit amount and fund it. Milestone accepts bank transfers and debit card payments. Your card typically arrives within 7 to 10 business days after your deposit clears.
Building Credit With This Card
The credit-building benefit comes from consistent, on-time payments. Each month, Milestone reports your payment status to Equifax, Experian, and TransUnion. A pattern of on-time payments tells lenders you are managing debt responsibly, which raises your score over time. Most people see a measurable improvement within 6 to 12 months of regular use.
To maximize the benefit, keep your balance low relative to your limit. If your limit is $500, try to keep your balance below $50 to $100 each month. This demonstrates that you can manage credit without maxing out your available funds. Pay at least the minimum by the due date every month — even one late payment can erase months of progress.
Do not close the card when ready after your score improves. Lenders also look at the length of your credit history. Keeping the card open, even if you stop using it actively, helps your score in the long run.
When Milestone Converts Your Card to Unsecured
After 18 months of on-time payments, Milestone may offer to convert your secured card to an unsecured card. This means you get your deposit back and the card continues to work, but without the security requirement. The conversion is not automatic — Milestone reviews your account and decides whether to offer it.
If you are offered conversion, your credit limit may stay the same, increase, or decrease depending on your credit score at that time. Your annual fee may also change. Once converted, you no longer have a deposit tied up, so you can use that money elsewhere.
If Milestone does not offer conversion after 18 months, you can request a review. Some cardholders have to wait 24 months or longer, or they may need to show a higher credit score. There is no may provide of conversion, so do not count on it as a certainty.
Comparing Milestone to Other Secured Cards
Other secured cards in the market include the Capital One Secured Mastercard, the Discover it Secured Credit Card, and the OpenSky Secured Visa Card. Each has different fees, interest rates, and conversion timelines. Capital One's card has a lower annual fee ($39) but a higher minimum deposit ($200). Discover's secured card offers cash back rewards (1% on all purchases), which Milestone does not. OpenSky has no credit check requirement, which appeals to people with very recent negative events.
The choice depends on your priorities. If you want the lowest annual fee, Capital One is cheaper. If you want rewards while rebuilding, Discover is the only secured card that offers them. If you have no credit history at all and want to avoid a hard inquiry, OpenSky is an option. Milestone sits in the middle — moderate fees, standard terms, and a clear path to conversion after 18 months.
Common Mistakes to Avoid
The biggest mistake is missing a payment. One late payment can set back your credit score by 100 points or more and may disqualify you from conversion to an unsecured card. Set up automatic payments for at least the minimum due, even if you plan to pay in full later.
Another mistake is maxing out your credit limit. Carrying a balance close to your limit signals financial stress to lenders, even if you pay on time. Aim to use no more than 10% to 30% of your available credit each month.
A third mistake is closing the card too soon after conversion or after your score improves. Your credit history length matters, and closing an account shortens your average account age. Keep the card open and use it occasionally, even if you have moved on to better cards.
Finally, do not explore for multiple secured cards at once. Each process triggers a hard inquiry, which lowers your score. One secured card is usually enough to rebuild credit; adding a second card rarely helps and often hurts.
Frequently Asked Questions
Can I get my deposit back before 18 months?
No. Your deposit is held for the life of the account or until Milestone converts it to an unsecured card. You cannot withdraw it early without closing the account, and closing the account forfeits the credit-building benefit you have earned so far.
What happens if I miss a payment?
A missed payment is reported to the credit bureaus and damages your score when ready. Milestone may also charge a late fee (typically $25 to $35) and increase your APR. If you miss a payment by more than 30 days, it becomes much harder to get conversion to an unsecured card later.
Does Milestone do a hard or soft credit check?
Milestone performs a hard inquiry, which temporarily lowers your credit score by a few points. A hard inquiry stays on your credit report for about two years but has less impact on your score after the first few months. Soft inquiries (which do not affect your score) are used only for pre-approval offers, not for actual applications.
Can I use this card if I have a bankruptcy on my record?
Yes. Milestone does not automatically deny applications based on bankruptcy. However, a recent bankruptcy (within the last year or two) may make approval less likely or result in a lower credit limit. Your best option is to explore and see what Milestone offers.
Is there a way to increase my credit limit without adding more money?
Milestone does not offer unsecured credit limit increases on secured cards. Your limit is tied to your deposit. If you want a higher limit, you would need to add more money to your deposit account. Some cardholders do this after a year of on-time payments to show Milestone they are serious about rebuilding.