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Milestone Mastercard® vs Arro Mastercard®

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Card Name
Milestone Mastercard® with $700 Limit
Arro Mastercard®
Annual Fee
Year 1 = $175
Year 2 Onwards = $49
No Annual Fee
Monthly Fee
Year 1 = $0
Year 2 Onwards = $12.50/month ($150 annually)
Year 1 = $1/month ($12 annually)
Year 2 Onwards = $3/month ($36 annually)
APR
35.9%
16%
Initial Credit Limit
$700
$50 - $200
Maximum Credit Limit
$700 (credit limit does not increase)
$2,500
FICO Score Needed
560 - 640
Arro does not consider FICO score for approval
Other Approval Requirements
  • No delinquent accounts
  • Min income of $20,000 annually
  • Not more than 2 hard inquiries prior 6 months
  • Min income of $1,800/month
  • Min $50 positive balance in bank account
  • Link bank account to Arro via PLAID
By : Mr Credit Card

Executive Summary

Both the Arro Mastercard and Milestone Mastercard are unsecured credit cards that are targeted at people with bad credit. While Milestone approves applicants with FICO scores ranging from 560-640, Arro does not rely on FICO scores at all. Instead, you need a minimum monthly income of $1,800 and and positive bank balance to be approved. The Arro Mastercard also has much lower fees and interest rates and also higher credit limits.

In this comparison, I will highlight the difference between Arro and Milestone and explain why we think Arro is the better credit card.


Similarities

Here are the ways both Arro and Milestone are similar.

  • Both are unsecured credit cards targeting those with bad credit
  • Both are Mastercard


That aside, they are quite different. Let's take a look at our different they are.


Differences

The Milestone Mastercard is different from the Arro Mastercard in the following ways:

Arro does not perform hard inquiry

Arro does not rely on FICO scores to determine your credit worthiness. Instead they have 3 criterias:

  • Minimum Monthly Requirements - Arro requires you to have a minimum monthly income of $1,800.

  • Minimum Bank Balance - Arro requires you to have a minimum bank balande of $50. Your chances of getting a larger initial credit limit increases if you have a higher positive bank balance

  • Link your bank account to Arro - Arro requires you to link your bank account to them via PLAID. This enables them to verify your income and bank balance required to approve you. It also enables you to set up autopay.


Milestone Performs Hard Inquiry and Has FICO score requirements

In contrast to Arro, Milestone performs a hard inquiry when you apply for their card. These are their requirements:

  • FICO Score Requirements - Though Milestone has a minimum FICO score requirement of 510, in reality, most cardholders who are approved have FICO scores between 560 and 640. That is the sweet spot.

  • No deliquencies - Milestone requires that you have no delinquencies. That means all charge offs and collection accounts have to be settled.

  • No more than 2 inquires during the last 6 months - You must have steer clear of going on an application spree for at least 6 months or else you will be denied by Milesone.


Arro has lower fees

Arro's Fee - Arro has signicantly lower fees than the Milestone Mastercard. With Arro, you have to pay $1/month year during the first year. This works out to $12 annually. From the second year onwards, you will have to pay a $3/month fee, which works out to $36 annually.

Milestone's Fee - For the Milestone Mastercard, you have to pay a $175 annual fee during the first year. From the second year onwards, the $175 annual fee is reduced to $49. However, in addition to the $49 annual fee, you have to pay a $12.50/month fee, which works out to $150 annually. Hence from the second year onwards, you have to pay a total fee of $49 + $150 = $199. This is significantly higher than the Arro Mastercard fee.

Arro has higher credit limit ceiling and will increase your credit limit while Milestone does not increase credit limit

Arro may start you off with a credit limit ranging from $50-$200. However, you can easily increase your credit limit by simply taking financial literacy courses on their app. Each course you complete will immediately either result in an increase in credit limits or a reduction in APR. Hence, your credit limit increase is totally within your control. The maximum credit limit on the Arro Mastercard is $2,500.

The Milestone Mastercard has a starting credit limit of $750 and the credit limit stays fixed and will never increase. So while you may have a higher credit limit with Milestone from the start, you are capped at the $700 limit.

Arro has a lower APR

The APR for Arro is 16% while the APR for Milestone is 35.9%. Furthermore, Arro will lower your APR if you complete certain financial literacy courses from their app.


Which is better? Clearly Arro is Better

The Arro Mastercard is clearly better than the Milestone Mastercard because it has lower fees, lower APR, higher credit limits and and approval process that is not based on FICO score but rather your income and cash flow. If you meet Arro's approval criteria, you will almost be certainly approved.

Fee wise, Arro saves you $163 during the first year compared to Milestone and $163 from the second year onwards. While all of us here at www.askmrcreditcard.com always recommend that you pay your balance in full, we have to admit that the 16% APR of Arro is very low even for a prime card. If you do have to occasionally carry a balance, 16% is way better than 35.9%. With Arro, credit limit increases are totally within your control by simply taking online finance courses from their app. Milestone does not even increase your credit limit.

To sum up, if you have credit scores in the 500 area or even in the low 600s, I would recommend the Arro Mastercard over the Milestone Mastercard anyday.