What the Milestone Card is and who it's for
The Milestone Credit Card is a secured card issued by Milestone Bank that requires you to put down a cash deposit, which becomes your credit limit. With the $700 version, you deposit $700 and receive a $700 credit line. You use the card like any other credit card — swipe it, pay a monthly bill — but the bank holds your deposit as collateral in case you stop paying.
This card is built for people rebuilding credit after missed payments, collections, or a long period without credit history. It reports to all three credit bureaus (Equifax, Experian, and TransUnion), so on-time payments show up on your credit report and can raise your score over time. The deposit stays frozen in a separate account; you don't lose it unless you default on the card itself.
Key Takeaways
- You deposit $700 upfront, which the bank holds as collateral and becomes your spending limit.
- The card charges an annual fee (the exact amount varies and should be confirmed with the bank before you open the account).
- Monthly payments and your credit behavior are reported to all three credit bureaus, which can help rebuild your score if you pay on time.
- After a period of responsible use — typically 12 to 18 months — you may be offered a path to convert to an unsecured card or receive your deposit back.
- Interest rates on secured cards are higher than standard cards, so carrying a balance costs more than it would with a traditional credit card.
Costs: deposit, annual fee, and interest
The $700 deposit is your own money held in reserve. You don't pay it upfront as a fee — you send it to the bank, and it sits there. If you close the account in good standing or graduate to an unsecured card, you get it back.
The card charges an annual fee. The exact amount changes over time and may vary based on your creditworthiness at the time you open the account, so you should confirm the current fee directly with Milestone Bank before explore. This fee is charged to your card balance, so it reduces your available credit.
The interest rate (APR) on purchases and cash advances is higher than you'd see on a standard credit card — often in the range of 18% to 24% or higher, depending on your credit profile. If you carry a balance month to month, interest accrues daily. The best strategy is to charge small amounts and pay the full statement balance each month, so no interest charges explore.
How to use the card to rebuild credit
The card only helps your credit if you use it and pay on time. A common approach is to charge a small recurring bill — a streaming service, a phone bill, or a gas purchase — and set up automatic payments to cover the full balance before the due date each month. This creates a pattern of on-time payment that the bureaus see.
Keep your balance well below your $700 limit. Credit bureaus look at your utilization ratio — the percentage of your available credit you're using. Using more than 30% of your limit can hurt your score, even if you pay on time. So if your limit is $700, try to keep your balance under $210.
Avoid missing payments. A single late payment stays on your credit report for seven years and can erase months of progress. If you're worried about forgetting, set up automatic payments or calendar reminders.
When you might graduate to an unsecured card
After you've used the Milestone card responsibly for 12 to 18 months, the bank may review your account and offer to convert it to an unsecured card. This means your deposit is returned to you, and you keep the card with a new credit limit (which may be higher or the same as your deposit). Not all cardholders are offered this upgrade, and the bank's decision depends on your payment history and credit behavior.
Some cardholders choose to close the Milestone card and open a different unsecured card once their credit has improved enough to be approved elsewhere. If you do this, your deposit is returned within a few business days of closing the account. Closing an old account can temporarily lower your score (because it reduces your total available credit), but the impact usually fades within a few months.
Comparing the $700 Milestone to other secured cards
Other secured cards in the market include the Capital One Secured Mastercard, the Discover Secured Card, and the OpenSky Secured Visa. The main differences are the deposit amount (which can range from $200 to $2,500), the annual fee, the interest rate, and the path to graduation. Some cards offer rewards on purchases; the Milestone does not. Some cards have lower annual fees; others have higher interest rates.
The $700 deposit size sits in the middle of the range — low enough to be manageable for someone rebuilding, but high enough to give you meaningful room to practice credit behavior. If you can only afford a smaller deposit, the Capital One Secured card starts at $200. If you want a card with rewards, the Discover Secured card offers 2% cash back on purchases, though its annual fee is higher.
What happens if you miss a payment
If you miss a payment, the bank will charge you a late fee (the amount varies) and report the late payment to the credit bureaus. A single late payment can drop your score by 50 to 100 points or more, depending on your current score. The late payment stays on your report for seven years.
If you miss multiple payments or fall significantly behind, the bank may close your account and use your deposit to cover the debt. You would then owe any remaining balance, and the account closure would appear on your credit report. This is why setting up automatic payments or reminders is so important — the cost of a missed payment far exceeds the benefit of the card.
Frequently Asked Questions
Can I use the $700 deposit as my first payment?
No. The deposit is held separately in a collateral account and is not available for you to draw from. You make your monthly payments from your checking or savings account, just as you would with any credit card. The deposit stays frozen until you close the account or graduate to an unsecured card.
Will the card help my credit score if I never use it?
No. Credit bureaus only see activity they can measure — payments, balances, and account age. An unused card with a zero balance reports nothing to your score. You need to charge something and pay it to create a record that helps rebuild.
What if I want my deposit back before 12 months?
You can close the account at any time and request your deposit back. However, closing the account early means you lose the opportunity to build a longer payment history, which is one of the main reasons to use a secured card. Most people keep the card open for at least a year to show sustained responsible behavior.
Does the Milestone card have a rewards program?
No. The Milestone card does not offer cash back, points, or other rewards on purchases. Its purpose is to help you rebuild credit, not to earn rewards. Once you graduate to an unsecured card or open a different card with better credit, you can look for cards with rewards.
Can I increase my credit limit above $700?
You can request a credit limit increase by depositing more money with the bank. For example, if you deposit an additional $300, your credit limit would rise to $1,000. However, you would need to have the cash available to do this. The bank does not automatically increase your limit based on payment history alone.