What the Milestone Credit Card Is
The Milestone Credit Card is a secured credit card issued by Milestone Bank. You deposit $700 into a savings account held by the bank, and that deposit becomes your credit limit. You then use the card like any other credit card—make purchases, receive a monthly statement, and pay a bill. The bank reports your payment activity to the three major credit bureaus (Equifax, Experian, and TransUnion), which means on-time payments build your credit history.
The card is designed for people rebuilding credit or establishing a credit history for the first time. Because the bank holds your deposit as security, they take on less risk, which is why secured cards exist for people who cannot yet may have access to for unsecured cards.
After you demonstrate responsible use—typically 7 to 12 months of on-time payments—Milestone may convert your account to an unsecured card and return your deposit. This is not automatic; the bank reviews your account and decides whether to upgrade you.
Key Takeaways
- Your $700 deposit becomes your credit limit; you cannot spend more than that amount.
- You pay an annual fee (currently $95) in addition to the deposit, charged to your card in the first month.
- On-time payments are reported to all three credit bureaus and help build your credit score over time.
- After 7 to 12 months of responsible use, Milestone may convert your account to unsecured and return your deposit.
- Interest rates on purchases and cash advances are higher than typical unsecured cards, so carrying a balance costs more.
Costs You Pay Upfront and Ongoing
When you open the account, you send $700 to Milestone Bank. This money sits in a savings account in your name and earns a small amount of interest (the rate varies). You do not lose this money—it secures your credit line and is returned when your account is closed or converted to unsecured.
The annual fee is $95, charged to your card in your first billing cycle. This is separate from the deposit. If you keep the card open for multiple years without conversion, you pay $95 every year the account remains active.
The card carries a purchase APR (annual percentage rate) that is higher than most unsecured cards. The exact rate depends on your creditworthiness at the time you open the account, but expect it to be in the range of 18% to 24%. If you carry a balance from month to month, interest accrues daily on that balance. Cash advances carry a separate, higher APR and also charge a fee (usually 3% of the amount withdrawn).
How to Use the Card to Build Credit
The goal of a secured card is to demonstrate that you can use credit responsibly. Milestone reports your payment history to the credit bureaus, so every on-time payment strengthens your credit profile. Every late or missed payment also gets reported and damages your score.
To build credit effectively, keep your balance low relative to your limit. If your limit is $700, try to use no more than 30% of it ($210) in any given month. This ratio—called your credit utilization ratio—affects your credit score. Pay your full statement balance by the due date each month. Paying only the minimum keeps you in debt longer and costs more in interest.
Avoid cash advances. They carry higher fees and interest rates, and they count toward your credit utilization ratio just like purchases do. If you need cash, use an ATM with your debit card instead.
When Milestone Converts Your Account to Unsecured
Conversion is not may provide, and Milestone does not publish exact criteria for when it happens. The bank reviews accounts periodically and looks at payment history, account age, and credit behavior. Most cardholders who make all payments on time see conversion offers between 7 and 12 months of account opening.
When Milestone decides to convert your account, they notify you by mail or through your online account. At that point, your $700 deposit is returned to you (usually within 5 to 10 business days), and your credit limit may increase. Your card continues to work, but it is now unsecured—the bank no longer holds your deposit as collateral.
Conversion does not happen automatically just because you reach a certain date. If your payment history is spotty or your credit behavior raises concerns, Milestone may decline to convert. In that case, your account remains secured, and you keep paying the annual fee.
Comparing the Milestone Card to Other Secured Options
Other banks offer secured cards with different terms. The Capital One Secured Mastercard, for example, has no annual fee but requires a minimum deposit of $200 and has a similar APR range. The Discover Secured Card also has no annual fee and reports to all three bureaus. The OpenSky Secured Visa has no credit check and accepts deposits from $200 to $2,500, but charges a higher annual fee ($35) and higher APR.
The Milestone card's $95 annual fee is higher than some competitors, but the card does report to all three bureaus and offers conversion to unsecured status. If you can afford the $700 deposit and $95 annual fee, and you are committed to on-time payments, the Milestone card works. If the annual fee is a burden, a no-fee secured card from Capital One or Discover may suit you better.
The deposit amount itself matters less than your ability to use the card responsibly. A $200 deposit with perfect payments builds credit faster than a $700 deposit with late or missed payments.
What Happens if You Miss a Payment
Missing a payment on the Milestone card has when ready and long-term consequences. A payment that is 30 days late is reported to the credit bureaus and damages your credit score. A payment that is 60 days late is reported as well and causes more damage. A payment that is 90 days or more late may trigger account closure and collection activity.
If your account is closed due to non-payment, Milestone may hold your $700 deposit to cover the debt. You would then owe any remaining balance, and the closed account remains on your credit report for seven years. This defeats the purpose of the card, which is to build credit.
If you are struggling to pay, contact Milestone as soon as possible. Some banks offer hardship programs or temporary payment reductions, though Milestone's policies vary. Paying late is always worse than calling ahead and asking what options exist.
Frequently Asked Questions
Can I increase my credit limit after I open the account?
Milestone does not allow you to increase your credit limit by adding more money to your deposit. Your limit stays at $700 unless the bank converts your account to unsecured, at which point they may increase your limit. Some cardholders report receiving unsolicited limit increases after conversion, but this is not may provide.
What if I close my account before conversion?
If you close your account before Milestone converts it to unsecured, you forfeit the conversion benefit. Your $700 deposit is returned, but you lose the opportunity to move to an unsecured card. You also stop building credit history with that account. Close the account only if you no longer need it or cannot afford the annual fee.
Does the $700 deposit earn interest?
Yes, your deposit earns interest in the savings account Milestone holds for you. The rate is typically very low (less than 1% annually), so you earn only a few dollars per year. The interest does not offset the $95 annual fee, but it is better than earning nothing.
Can I use the card internationally?
The Milestone card is a Mastercard, so it works at merchants worldwide that accept Mastercard. However, international purchases usually trigger a foreign transaction fee (typically 1% to 3% of the purchase amount). Check your cardholder agreement for the exact fee before using the card abroad.
How long does it take to receive the card after I open the account?
Milestone typically mails the card within 7 to 10 business days after your account is approved and your deposit is received. You can check the status of your card through your online account or by calling customer service. The card arrives with a PIN mailer, which you use to set your PIN for ATM withdrawals and cash advances.