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This card is a good example of why credit card issuers have such a bad reputation among the less fortunate. Offering consumers credit cards with few benefits, high rates and fees, and little or no alternative, no matter how legal, remains unpleasant.

Good credit largely maintains low utilization. Low credit limits, such as the $300 limit on the Milestone Gold card, make it extremely difficult to maintain low credit utilization. A lower credit limit, even for the most creditworthy applications, is granted to this card with a relatively high annual fee, keeping people with poor credit ratings in check.

If the card has an annual fee, the credit limit will be reduced by the annual fee. Annual fees used to be much higher, but the 2009 CARD Act capped the fee credit card companies could charge to 25% of the credit limit (excluding late fees and penalties). Before the bill was introduced, the fees charged on subprime credit cards would only further reduce the credit limit of the card so that consumers would never escape the credit utilization crisis. Of the three possible Milestone Gold annual fees, the highest (for those with the worst credit) is 75-25% of the $300 credit limit. After the first year, the annual fee is $99, almost a third of the credit limit. We generally advise consumers not to borrow more than 30% of their total credit limit, which means the card’s annual fee alone is enough to lower your credit score, not improve it.

Learning how credit cards and personal finance work can be difficult in regions and populations where education and information access is not widespread and effective money management is not common. It’s also hard to avoid bad credit when credit cards and financial education are offered through advertisements issued by such cards.

Good credit and spending habits are not just things we have, they are habits. Habits are not easy to break, and bad credit and unhealthy spending habits are a vicious cycle for those who develop bad habits. Is this an excuse? No, that’s an explanation: when the terms are clear, it’s understandable that a card doesn’t offer benefits, because lending to people with bad credit is inherently risky. But for cards like Milestone Gold, with no clear terms even ostensibly outlined and seemingly keeping consumers’ low credit scores deliberately low, they only use people with bad habits and lack of resources to fix them .

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Cards like Milestone Gold will appeal to people who may not have a better option due to poor financial decisions and unfortunate circumstances. The card offers no rewards and comes with hefty fees and high interest rates without being upfront and clear about how the card works. There is a better way.

At first glance

Unsecured card without deposit

Zero Liability Guarantee

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$35-$99 annual fee

Up to 24.90% APR

More card benefits

Zero Liability Guarantee: Cardholders are not responsible for fraudulent purchases made with this card.
Identity Theft Monitoring: Mastercard’s automated identity theft monitoring.

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Beautifully printed

Interest expense

  • Regular APR: 24.90%
  • Purchase introductory APR: Not applicable
  • Introduction to Balance Transfer APR: N/A

Cost

  • Annual Fee: $35-$99
  • Balance transfer fee: see terms and conditions
  • Prepayments:
  • Foreign purchase transaction fee:

How the cards are stacked

Milestone Gold Mastercard® vs. Discover it® Secured Credit Card

Secured card loan deposit. The Discover it® Secured Credit Card makes a great secured card because it offers a 2% cash back bonus on the first $1,000 spent at restaurants and gas stations every quarter, and an unlimited 1% on everyone else’s spend Cash back – and all with no annual fee. It also offers a standard suite of Discover benefits, such as earning FICO points and a Discover Cashback match, which is equivalent to a first-year cashback reward at the end of the cardholder’s first year.

For those trying to restore their credit, the Discover it® Secured Credit Card makes more sense than the Milestone Gold Mastercard because it helps ease the relationship with the issuer, which can lead to an unsecured card and a greatly improved credit limit. Unlike Milestone Gold, the Discover it® Secured Credit Card offers an easy-to-use, habit-forming way to build credit. The only downside is that consumers must pay a deposit if approved.

Milestone Gold Mastercard® vs. Petal® 1 “No Annual Fee” Visa® Credit Card

Issued by FDIC member WebBank, Petal 1 first surpassed Milestone Gold by waiving annual fees. With credit lines ranging from $300 to $5,000 and 2%-10% cash back at select retailers, it continues to outperform weak competition. While not all purchases offer cash back, Petal 1’s attention to detail beyond credit history helps make it a good option for those with no credit history backing traditional cards.

It is certainly preferable to Milestone Gold for those whose circumstances may allow them to qualify for the Petal 1 card, as there is no annual fee alone.

Milestone Gold Mastercard® and Avant Credit Cards

While its terms are similar to Milestone Gold, and of course there’s nothing to offer, Avant has a modest annual fee and an expandable line of credit. While the marketing seems more geared towards helping those in need of credit recovery, the Avant card could be an option as a “last resort” along with Milestone Gold. It might be the penultimate resort on this list, but the goal should be to cross this list entirely, right?

Is this card right for you?

We would definitely not recommend this card to anyone – from a purely ethical standpoint, this card and how it’s marketed is bad news. For those who insist on having an unsecured credit card but have a poor credit history, we urge them to consider secured options to help build credit. For those who really have no other choice, this card may be a temporary and only solution, but only after reading the fine print can there be a clear plan to get out of a bad credit cycle and exhaust all other avenues .

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