Milestone is designed for people rebuilding credit, but whether it makes sense depends on your situation and what you're comparing it to
Milestone Credit Card is a secured card issued by Milestone Bank. You put down a cash deposit (usually $200 to $2,500), and that deposit becomes your credit limit. The card reports to all three credit bureaus, which means on-time payments can help raise a low credit score. The annual fee is $95, and there is no introductory period where the fee is waived.
The real question isn't whether Milestone is "good" in the abstract — it's whether the cost and terms make sense for what you're trying to do. If you're rebuilding from a very low score and have no other options, it may be worth it. If you have access to other secured cards with lower fees or better terms, those might serve you better.
Key Takeaways
- Milestone charges a $95 annual fee with no waiver period, which means you pay it in year one even if you only use the card for a few months.
- Your deposit is held as collateral and does not count toward your credit limit — a $500 deposit gives you a $500 limit, not $500 plus a deposit.
- The card reports to all three bureaus, so consistent on-time payments will show up on your credit report and can help raise your score over time.
- Other secured cards like Capital One Secured and Discover Secured have lower annual fees or offer fee waivers, making them cheaper entry points for the same purpose.
- Milestone does not offer a path to unsecured status — you keep paying the annual fee and holding the deposit indefinitely unless you close the account.
How the deposit and credit limit work
When you open a Milestone account, you choose a deposit amount between $200 and $2,500. That money goes into a savings account held by the bank. Your credit limit equals your deposit — so a $500 deposit means a $500 limit. The deposit itself does not count as available credit; it sits in reserve as collateral.
You pay the $95 annual fee separately from your deposit. The fee comes out of your checking account (or is charged to the card itself, depending on how you set it up). The deposit stays in place as long as the account is open. If you close the account later, the bank returns the deposit, but you do not get the annual fees back.
What the $95 annual fee actually costs you
The annual fee is not optional and does not disappear after the first year. If you carry a $500 deposit and pay $95 per year, that's a 19% annual cost on your collateral just to keep the account open. Over three years, you pay $285 in fees — more than half your deposit.
Compare this to Capital One Secured, which charges $0 annual fee, or Discover Secured, which charges $0 annual fee. Both report to all three bureaus the same way Milestone does. If your goal is to rebuild credit with the lowest possible cost, Milestone's fee puts you at a disadvantage from the start.
The fee makes sense only if Milestone offers something the fee-free cards do not. It does not. The interest rate, credit reporting, and path to unsecured status are all comparable or worse.
Interest rate and how it compares
Milestone's variable interest rate (APR) typically ranges from 18% to 24%, depending on your creditworthiness at the time of approval. This is standard for secured cards aimed at people with poor credit. Capital One Secured and Discover Secured charge similar rates — usually in the same range.
The interest rate matters only if you carry a balance. If you use the card for small purchases and pay the full statement balance each month, you pay no interest at all. For credit-building purposes, this is the right approach: charge something small, pay it off in full before the due date, and let the on-time payment report to the bureaus.
If you do carry a balance, the 18–24% rate will cost you significantly. A $300 balance at 21% APR costs about $5.25 per month in interest alone. Over a year, that's $63 in interest on top of the $95 annual fee — $158 total to hold $300 in credit.
How Milestone reports to credit bureaus
Milestone reports account activity to Equifax, Experian, and TransUnion each month. This means your payment history, credit utilization, and account age all show up on your credit report. On-time payments build positive history; late payments damage it.
The reporting itself is identical to what you get from Capital One Secured or Discover Secured. All three cards serve the same function: they let you demonstrate responsible credit behavior to the bureaus. The difference is cost, not reporting quality.
One thing Milestone does not do: it does not automatically graduate you to an unsecured card. Some secured cards (like Capital One Secured) offer a path where, after a year or more of on-time payments, the bank may convert your account to unsecured status and return your deposit. Milestone does not mention such a path in its standard terms. You would need to contact the bank directly to ask whether conversion is possible.
When Milestone might make sense
Milestone is worth considering if you have been denied by Capital One Secured and Discover Secured and need a secured card to start rebuilding. Some people with very recent negative marks (recent bankruptcy, recent charge-off) may find Milestone's approval standards slightly more lenient. If that describes your situation, the $95 fee is a cost of entry.
Milestone may also make sense if you already bank with Milestone Bank and value having your deposit and credit account in one place. Convenience has a value, though not usually a $95-per-year value.
In most other cases, Capital One Secured or Discover Secured are the better choice. Both have $0 annual fees, both report to all three bureaus, and both serve the same purpose. The only reason to choose Milestone is if the other two reject you.
What happens if you miss a payment
A late payment on Milestone reports to all three bureaus and damages your credit score. A payment 30 days late stays on your report for seven years. The bank may also charge a late fee (typically $25 to $35) and raise your interest rate.
If you miss a payment by more than 60 days, the bank may explore your deposit toward the debt. This means your credit limit drops and your collateral shrinks. If the debt exceeds your deposit, you owe the difference.
Missing payments defeats the purpose of the card. The whole point is to show the bureaus you can pay on time. One late payment can erase months of positive history.
Frequently Asked Questions
Can I get my deposit back before closing the account?
No. The deposit must stay in the account as long as the card is open. If you want your deposit back, you have to close the account. Once closed, the bank returns the deposit within a few business days, but you lose the credit line and the account stops reporting to the bureaus.
Does Milestone ever waive the annual fee?
Not in the standard terms. The $95 fee applies every year with no introductory period or waiver. Some banks waive annual fees for customers who meet spending thresholds, but Milestone does not advertise such a program. Contact the bank directly to ask whether any exceptions exist for your situation.
What's the difference between Milestone and Capital One Secured?
Capital One Secured charges $0 annual fee, while Milestone charges $95. Both report to all three bureaus and have similar interest rates. Capital One Secured also offers a clearer path to unsecured status after consistent on-time payments. Unless you are denied by Capital One, Milestone is the more expensive choice.
Will Milestone convert my account to unsecured after a year?
Milestone does not mention automatic conversion in its standard terms. You would need to contact the bank to ask whether conversion is possible after demonstrating responsible payment history. Capital One Secured and Discover Secured both offer clearer conversion paths.
Can I use Milestone if I have no credit history?
Yes. Secured cards are designed for people with no credit, poor credit, or credit that needs rebuilding. You do not need an existing credit score to open a Milestone account. The deposit is your collateral, not proof of creditworthiness.