Milestone is built for people rebuilding credit, not for rewards or low rates

The Milestone Credit Card is a secured card issued by Milestone Bank, designed for people with limited or damaged credit history. It reports to all three credit bureaus, which means responsible use can help you build a credit score. The card itself carries an annual fee of $95 and requires a cash deposit that becomes your credit limit — typically between $200 and $2,500. There is no rewards program, no sign-up bonus, and the interest rate (currently around 24% APR) is high. You should consider Milestone only if you need to rebuild credit and other secured cards are not available to you.

The real question is not whether Milestone works, but whether it is the cheapest way to rebuild. Most people have better options. Capital One Secured and Discover Secured both charge lower annual fees and report to the same bureaus. Milestone makes sense only if those cards have rejected you or if you need approval very quickly.

Key Takeaways

  • Milestone requires a cash deposit that matches your credit limit, so you must have $200 to $2,500 available upfront.
  • The $95 annual fee is charged whether you use the card or not, making it expensive relative to competing secured cards.
  • The 24% APR is typical for secured cards aimed at poor credit, but you should compare it against Capital One Secured, Discover Secured, and OpenSky before deciding.
  • Milestone reports to all three bureaus, so on-time payments will build your credit history if you have little or none.
  • After 18 months of on-time payments, you may be offered an unsecured card and your deposit may be returned.

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 limit is $500. The deposit stays in the account and earns no interest — it straightforward sits there as collateral while you use the card.

This structure means Milestone is not a loan. You are spending your own money and paying interest on the balance you carry, just like any other credit card. The deposit protects the bank if you stop paying; they can take the money from the savings account to cover what you owe. For you, this means the card is less risky than an unsecured card would be, but it also means you cannot access that cash while the account is open.

Annual fee and interest rate compared to other secured cards

Milestone's $95 annual fee is higher than most competitors. Capital One Secured charges $0 to $39 depending on the tier. Discover Secured charges $0. OpenSky charges $35. If you carry a balance, you will also pay 24% APR, which is in line with other secured cards for people with poor credit, but not lower.

The combination matters. If you deposit $500 and pay the $95 annual fee but never use the card, you have paid 19% of your limit just to hold the account. If you do use it and carry a balance, the 24% APR will cost you roughly $10 per month on a $500 balance. Over a year, that is $120 in interest plus the $95 fee — $215 total on a $500 deposit. A card with no annual fee and the same APR would cost you only $120.

When Milestone makes sense and when it does not

Milestone is worth considering if you have been denied by Capital One Secured and Discover Secured. Both of those cards have lower annual fees and are easier to open. If you have no credit history at all — you have never had a credit card, loan, or utility bill in your name — Milestone may be one of the few cards that will accept you. It is also an option if you need a card quickly and other issuers have longer processing times.

Milestone does not make sense if you have fair credit (a score above 620 or so). At that point, you should look at unsecured cards with no deposit requirement, even if the APR is higher. It also does not make sense if you plan to pay off your balance in full every month — the $95 annual fee means you are paying for a service you do not need. In that case, a no-fee secured card is the obvious choice.

How Milestone reports to credit bureaus and what that means for your score

Milestone reports your account activity to Equifax, Experian, and TransUnion. This is important because it means your payment history will show up on your credit report. If you make on-time payments, your score will improve over time. If you miss a payment, that will also be reported and will hurt your score.

The improvement is gradual. A single on-time payment will not move your score much. But six months of on-time payments will show lenders that you are managing credit responsibly. After 12 to 18 months, you may see a meaningful increase — often 50 to 100 points, depending on where you started. The key is consistency: one missed payment can erase months of progress.

What happens after you have used the card for a while

Milestone's terms state that after 18 months of on-time payments, you may be offered an unsecured card. This is not automatic — the bank reviews your account and decides whether to upgrade you. If you are approved, you will get an unsecured Milestone card with a higher limit and your deposit will be returned to you.

In practice, many people are upgraded after 12 to 18 months of perfect payment history. Some are not. If you are not upgraded, you can ask the bank to reconsider or you can close the account and move to a different card once your credit has improved. The goal is to use Milestone as a stepping stone, not as a permanent card.

Alternatives to Milestone if you are rebuilding credit

Before you open a Milestone account, compare it against Capital One Secured, Discover Secured, and OpenSky. Capital One Secured has no annual fee for the first year and $39 after that (or $0 if you are approved for the higher tier). Discover Secured has no annual fee ever and offers 1% cash back on all purchases. Both report to all three bureaus and both have upgrade paths to unsecured cards.

OpenSky is worth considering if you have no credit history at all and have been denied elsewhere. It charges $35 annually and has a 24% APR, but it does not require a credit check. If you have a thin credit file but not a damaged one, Chime Credit Builder or Self Lender might work — these are not credit cards but credit-building tools that cost less and work faster.

Frequently Asked Questions

Can I get my deposit back before 18 months?

No. Your deposit is locked in the savings account for the life of the card. You can close the account and get your deposit back, but closing the account will hurt your credit score because it reduces your available credit and shows a closed account on your report. Wait until you are upgraded to an unsecured card or until your credit is strong enough that closing does not matter.

What if I miss a payment on Milestone?

A missed payment will be reported to all three credit bureaus and will damage your score. Milestone may also charge a late fee (typically $25 to $35) and your APR may increase. If you miss a payment by 30 days or more, the bank can take the money from your deposit to cover what you owe. This defeats the purpose of rebuilding credit, so set up automatic payments if possible.

Does Milestone offer a grace period before interest kicks in?

Milestone does not offer a grace period. Interest begins accruing on the day you make a purchase. This means carrying any balance will cost you money when ready. If you plan to pay off your balance in full every month, the $95 annual fee makes Milestone expensive compared to a no-fee secured card.

Can I increase my credit limit without adding more money?

No. Your credit limit is tied directly to your deposit. To increase your limit, you must add more money to the savings account. Some people do this over time as their credit improves, but it is not required. You can also wait for an upgrade to an unsecured card, which will have a limit set by the bank based on your creditworthiness.