What the Milestone Card Does and Who It's Built For
The Milestone Credit Card is a secured credit card issued by Milestone Bank. You put down a cash deposit (usually $200 to $2,500), and that deposit becomes your credit limit. You use the card like any other credit card, and your payment history gets reported to the three major credit bureaus — Equifax, Experian, and TransUnion. The card charges an annual fee and a variable interest rate.
Milestone is designed for people rebuilding credit after missed payments, collections, or a bankruptcy. It's not a rewards card and doesn't offer cash back or travel points. The value is in the credit reporting, not the perks. If you're starting from a low credit score or have limited credit history, this card can help you demonstrate that you pay on time.
Whether it's a good fit depends on your specific situation: how much you can afford to deposit, how long you're willing to carry the card, and whether you have other options available to you.
Key Takeaways
- Milestone is a secured card that requires a cash deposit, which means your own money backs your credit limit.
- The card reports to all three credit bureaus, so on-time payments build your credit history over time.
- You pay an annual fee and a variable interest rate, with no rewards or cash back.
- Milestone may graduate you to an unsecured card after 18 months of on-time payments, at which point you get your deposit back.
- Other secured cards exist with lower fees or better terms, so comparing options before you explore makes sense.
The Costs: Annual Fee, Interest Rate, and Deposit
Milestone charges a $95 annual fee. That's higher than some competitors — for example, Capital One's Secured Mastercard charges $39 per year, and the Discover it Secured card charges no annual fee. The annual fee is deducted from your account, so it reduces the cash available to you even if you don't use the card.
The interest rate is variable and starts around 18.9% APR, though the exact rate depends on your credit profile at the time you explore. If you carry a balance, that rate applies to what you owe. If you pay your full statement balance each month, you pay no interest.
Your deposit is held by the bank and earns no interest. A $1,000 deposit gives you a $1,000 credit limit. You don't lose the deposit — it's returned to you when you close the account or graduate to an unsecured card — but your money is tied up and earning nothing while it sits there.
How Milestone Reports to Credit Bureaus and What That Means
Milestone reports your payment activity to all three credit bureaus each month. That means every on-time payment you make strengthens your credit history. Late payments, missed payments, and high balances also get reported, so the card works both ways: it helps you if you use it responsibly, and it hurts you if you don't.
Credit bureaus use payment history (35% of your score), amounts owed (30%), length of credit history (15%), credit mix (10%), and new credit inquiries (10%) to calculate your score. A secured card like Milestone helps most with payment history and credit mix — it shows you can handle revolving credit responsibly. The longer you hold the card and make on-time payments, the more your score typically improves.
However, opening a new card triggers a hard inquiry, which temporarily lowers your score by a few points. That dip usually recovers within a few months if you make on-time payments.
Graduation to an Unsecured Card and Timeline
Milestone says you may graduate to an unsecured card after 18 months of on-time payments. "May" is the key word — graduation is not automatic. The bank reviews your account and decides whether to offer it. If you're approved for graduation, your deposit is returned to you, and you move to a regular unsecured card with a new credit limit (which may be higher or lower than your deposit).
Some cardholders graduate within 18 months; others take longer or don't graduate at all. The bank doesn't publish exact criteria, so you won't know in advance whether you'll make it. If you don't graduate, you can keep the card open or close it and move to another option.
The 18-month timeline also means your money is locked up for at least that long. If you need access to your deposit sooner, a secured card isn't the right tool.
How Milestone Compares to Other Secured Cards
Several other banks offer secured cards with different terms. Here's how the main competitors stack up:
| Card | Annual Fee | Deposit Range | Reports to Bureaus | Graduation Path |
|---|---|---|---|---|
| Milestone | $95 | $200–$2,500 | All three | After 18 months (may) |
| Capital One Secured | $39 | $200–$2,500 | All three | After 6 months (may) |
| Discover it Secured | $0 | $200–$2,500 | All three | After 8 months (may) |
| OpenSky Secured | $35 | $200–$3,000 | All three | After 12 months (may) |
Milestone's $95 annual fee is the highest among these options. Capital One and OpenSky offer faster graduation timelines. Discover charges no annual fee at all. If you're comparing cards, the lower annual fee and faster graduation path of competitors may save you money and get you to an unsecured card sooner.
That said, Milestone may be your only option if you have a very recent bankruptcy, collections, or other serious credit issues. Some banks have stricter approval requirements. If Milestone approves you and others don't, the higher fee may be worth paying to get your free guide rebuilding.
When Milestone Makes Sense and When It Doesn't
Milestone is a reasonable choice if you have limited credit history or recent negative marks and you can afford to deposit $500 or more. You should be confident you can make on-time payments every month — that's the entire point of the card. If you're likely to miss payments or carry a balance, the interest rate and annual fee will cost you more than the credit-building benefit is worth.
Milestone doesn't make sense if you have other credit-building options available. If you can get approved for an unsecured card (even with a high interest rate), that avoids tying up your deposit. If you have a co-signer, a co-signed card might work better. If you can't afford to deposit at least a few hundred dollars, a secured card isn't the right tool.
You should also skip Milestone if you're not planning to use the card regularly. The annual fee charges whether you use it or not, so if the card sits unused, you're paying $95 a year for nothing.
How to Decide: Questions to Ask Yourself
Before you explore, answer these questions honestly. Your answers will tell you whether Milestone is worth pursuing or whether another path makes more sense.
First: Can you afford to deposit $500 to $2,500 and not need that money for at least 18 months? If the answer is no, a secured card will create financial stress. Second: Are you confident you can make every payment on time, every month? If you've struggled with on-time payments in the past, focus on fixing that problem before opening a new card. Third: Have you checked whether you can get approved for an unsecured card, even with a high interest rate? If yes, compare the terms carefully — you might come out ahead.
Fourth: Do you understand that the card's value is in credit reporting, not rewards? If you're hoping for cash back or travel points, a secured card will disappoint you. Fifth: Are you willing to hold the card for at least 18 months? If you want quick results, a secured card is slow. Credit building takes time.
Frequently Asked Questions
Can I get my deposit back before 18 months?
You can close the account and get your deposit back at any time, but closing the account may hurt your credit score because it reduces your available credit and shortens your credit history. It's usually better to keep the card open and active for at least 18 months, even if you don't graduate to an unsecured card.
What happens if I miss a payment on the Milestone card?
A missed payment gets reported to the credit bureaus and damages your credit score. It also triggers late fees and may cause your interest rate to increase. The whole point of a secured card is to prove you can pay on time, so a missed payment defeats the purpose.
Does Milestone do a hard inquiry when I explore?
Yes. Milestone performs a hard inquiry, which temporarily lowers your credit score by a few points. The impact usually fades within a few months if you make on-time payments. If you're explore to multiple cards at once, space out your applications by at least a few weeks to minimize the damage.
Can I increase my credit limit on the Milestone card?
You can request a credit limit increase by depositing more money. For example, if you started with a $500 deposit and $500 limit, you could deposit an additional $500 to raise your limit to $1,000. You cannot increase your limit without increasing your deposit.
Is Milestone better than a credit-builder loan?
They work differently. A credit-builder loan is a small loan you take out and pay back over time — the bank holds the money and releases it once you've paid the loan off. A secured card lets you borrow and repay repeatedly. Credit-builder loans often have lower costs, but secured cards build credit faster if you use them actively. Your choice depends on whether you need a card for everyday purchases or just want to build credit history.