Milestone is a starter card for people rebuilding credit, but it works best if you understand exactly what you're paying for

Milestone Credit Card is issued by Milestone Bank and marketed to people with limited credit history or past credit problems. It requires a cash deposit that becomes your credit limit — typically $200 to $2,500 — and reports to all three credit bureaus. The card itself costs $95 annually, plus a $39 annual fee for an authorized user if you add one. There is no rewards program, no sign-up bonus, and no cash back. You pay interest on any balance you carry, currently ranging from 18.9% to 22.9% APR depending on your creditworthiness at the time of approval.

Whether Milestone makes sense depends on what you're trying to do. If you need a card specifically to build credit history and you're willing to pay the annual fee for that purpose, it can work. If you're looking for rewards, cash back, or a low-cost card, Milestone is not the right choice. If you already have access to other secured cards with lower fees, those are worth comparing first.

Key Takeaways

  • Milestone requires a cash deposit that becomes your credit limit, so you need $200 to $2,500 available upfront to open the account.
  • The $95 annual fee is the main cost to weigh against other secured cards, which may charge $0 to $49 per year.
  • Milestone reports to all three credit bureaus, which is necessary for building credit, but many competing secured cards do the same thing.
  • The card has no rewards, no cash back, and no sign-up bonus, so you're paying purely for the credit-building function.
  • Interest rates run 18.9% to 22.9% APR, so carrying a balance is expensive — the card works best if you pay in full each month.

How the deposit and credit limit work

When you open a Milestone account, you deposit cash into a savings account held by the bank. That deposit amount becomes your credit limit. If you deposit $500, your credit limit is $500. The deposit stays in the savings account and earns no interest — it simply sits there as collateral.

You can request a credit limit increase after six months of on-time payments, and the bank may increase your limit without requiring an additional deposit. After 18 to 24 months of consistent on-time payments, you may become may be able to access to convert to an unsecured card, at which point the deposit is returned to you. There is no may provide of conversion, and the timeline varies by individual account performance.

Annual fees compared to other secured cards

The $95 annual fee is Milestone's largest cost. To decide whether it's worth paying, compare it to other secured cards on the market. The Capital One Secured Mastercard charges $0 annually with no deposit minimum (though you can deposit up to $2,500). The Discover it Secured card charges $0 annually and offers 2% cash back on purchases at gas stations and restaurants, 1% on all other purchases. The OpenSky Secured Visa charges $35 annually and reports to all three bureaus.

If you're comparing Milestone to Capital One or Discover, you're paying $95 per year for a feature those cards don't charge for. If you're comparing to OpenSky, you're paying $60 more annually. The question is whether Milestone's other features — approval odds, customer service, or specific reporting practices — matter enough to justify the extra cost in your situation. For most people, they don't.

Interest rates and when they matter

Milestone's APR range of 18.9% to 22.9% is typical for secured cards aimed at people rebuilding credit. The rate you receive depends on your credit profile at the time you open the account. This rate applies only if you carry a balance from month to month.

If you pay your full statement balance by the due date each month, you pay no interest regardless of the APR. The card's value in that case comes entirely from the credit-building function — the monthly reporting to the bureaus that shows you're using credit responsibly. If you cannot pay in full, the high interest rate makes the card expensive. For example, a $500 balance at 22.9% APR costs about $9.54 in interest per month if you make no payments. Over a year, that's $114.48 in interest alone, plus the $95 annual fee, for a total cost of $209.48 on a $500 deposit.

Reporting to credit bureaus and credit score impact

Milestone reports account activity to Equifax, Experian, and TransUnion each month. This reporting is what makes the card useful for credit building. Each on-time payment is recorded and visible to lenders who pull your credit report. Over time, a pattern of on-time payments raises your credit score.

The card also reports your credit utilization — the percentage of your limit you're using. If your limit is $500 and you carry a $250 balance, your utilization is 50%. Credit scoring models penalize high utilization, so keeping your balance low (ideally under 30% of your limit) helps your score more than paying it off completely. This is one reason secured cards are useful for building credit: they let you demonstrate responsible use of a small amount of credit without risking large debt.

When Milestone makes sense and when it doesn't

Milestone is worth considering if you have been denied for other secured cards, if you need a card urgently and Milestone approves you quickly, or if you have a specific reason to prefer Milestone Bank's customer service or account management. It is not worth choosing if you have access to Capital One Secured, Discover it Secured, or other cards with lower or no annual fees and similar credit-building features.

Milestone also makes sense if you're building credit specifically to reach a milestone (such as may have access to for a mortgage or car loan) and you're willing to pay the annual fee as part of that strategy. It does not make sense if you're looking for rewards, cash back, or a low-cost way to maintain an existing credit account. For those purposes, a rewards card or a no-annual-fee card is a better fit.

Steps to compare Milestone against your other options

Start by listing the cards you could actually open. Check whether you'd be approved for Capital One Secured or Discover it Secured by reviewing their approval criteria — both are more lenient than many unsecured cards. If you can open either of those, compare the total cost: Milestone's $95 annual fee versus their $0 annual fee, plus any rewards or cash back you'd earn.

Next, consider the deposit amount you can afford. Milestone's minimum is $200; Capital One's is $200; Discover's is $200. If you need a higher limit, check whether each card allows you to deposit more. Then calculate the real cost of carrying a balance on each card if you think you might not pay in full. A $500 balance at Milestone's 22.9% APR costs roughly $114 per year in interest; the same balance at Capital One's typical rate (around 21.9% APR) costs roughly $110 per year. The difference is small, but it adds up if you're comparing across multiple cards.

Frequently Asked Questions

Does Milestone report to all three credit bureaus?

Yes. Milestone reports to Equifax, Experian, and TransUnion each month. This is important because some older secured cards report to only one or two bureaus, which limits how much your credit score improves. Milestone's three-bureau reporting is standard among modern secured cards.

Can I increase my credit limit without adding more money?

After six months of on-time payments, you can request a credit limit increase. Milestone may approve an increase without requiring an additional deposit. There is no may provide, and the amount of any increase depends on your account history and payment performance.

What happens to my deposit if I close the account?

Your deposit is returned to you, typically within 5 to 7 business days after the account closes. Any remaining balance on the card must be paid off before you close the account. If you convert to an unsecured card (which may happen after 18 to 24 months of on-time payments), your deposit is returned automatically.

Is the $95 annual fee worth it compared to Capital One Secured?

For most people, no. Capital One Secured charges no annual fee, reports to all three bureaus, and has similar approval standards. Unless you've been denied by Capital One or have a specific reason to prefer Milestone, Capital One Secured is the lower-cost choice.

What if I can't pay my full balance?

Interest accrues at your APR (18.9% to 22.9%) on any unpaid balance. This makes the card expensive to carry a balance on. If you know you'll need to carry a balance regularly, a secured card may not be the right tool — consider whether a personal loan or payment plan would be cheaper.