Mr Credit Card
While most subprime unsecured credit cards only starts you off with a $300 credit limit and do not have any rewards program, the Destiny Mastercard gives you a $700 credit limit. This card will appeal to rebuilders looking for a higher credit limit card and also to rebuilders who have secured credit cards and are looking to take their first steps towards an unsecured credit. Like all unsecured credit cards for bad credit, you should only consider applying for this card if you have at least six months to a year of rebuilding under your belt and have steadily improved your credit scores (ie you should not be applying for this card if your score has just dropped very recently). In this review, we will analyze this card focusing on their fees versus the credit limit.
At A Glance
Advantages and Disadvantages
| Pros | Cons |
|---|---|
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Requirements
- Credit Score - You would need a minimum credit score of at least 510. Obviously, you stand a better chance if your score is higher.
- No Current Delinquencies - You must be paying all your bills on time at the moment and preferably for the last six months. That also means you should have paid off or settle all (or most of your) charge offs and collections and have nothing outstanding in your credit reports unless the amounts owed are really small and they are reaching the end of the statutes of limitations.
- At Least 6 Months of Rebuilding history - You must have been rebuilding for at least six months to a year and your scores must be on an upward trend. If you have just taken a hit to your score (say from 700s to 500s or even 600s) because of circumstances like divorce, job loss, medical bills etc, you will most likely be denied for this card. If you are in this situation, you should be looking at cards that do not look at credit cards with no credit checks and those that guarantee approval.
- Debt to Income Ratio - Your total monthly debt payment to monthly income ratio should not exceed 40%. Anything higher and your chances of approval are low regardless of your credit score.
Card Details
| Annual Fee |
$175 during first year $49 from second year onwards |
| Monthly Fee |
None during first year. $12.50/month which totals $150 annually from second year onwards |
| Regular APR | 35.9% |
| Starting Credit Limit | $700 |
I would like to highlight the fee aspect of this card.
There are two fees that this Destiny credit card charge, an annual fee and a monthly fee.
Fees During the First Year - During the first year, the annual fee is $175. There is no monthly fee during the first year so the total fee you have to pay during the first year is $175. The annual fee will appear on your first statement so your $700 credit limit will be reduced by this amount.
Fees from Second Year Onwards - From the second year onwards, the $175 annual fee is reduced to $49. But the monthly fee starts to kick in. You have to pay $12.50 a month (which totals $150 a year) from the second year onwards.That means that the total fee you have to pay from Year 2 is $199 ($49 + $150).
Key Benefits
Can Set Up AutoPay - Destiny allows you to set up autopay from your checking or savings account. We recommend that you set it up to avoid late payments.
Can Pay with Moneygram - Destiny allows you to pay your bills with Moneygram.
Some Drawbacks
Credit Limit does not increase - While $700 is a great starting credit limit for people with bad credit, Destiny is known not to increase your credit limit over time. So you are stuck with this credit limit as long as you keep this card.
No Mobile App - Another thing to be aware of is that Destiny does not ave a mobile app. For those of you who are used to managing your other credit cards on a mobile app, the lack of a mobile app can be a real inconvenience.
Cannot Pay via Debit Card - Destiny does not allow you to pay your bills via Debit card even if your debit card is from your checking account (which they obviously accept). This might upset those of you who like to pay with a debit card.
Analysis
Total Fees to Credit Limit Ratio - 1st Year. During the first year of your card membership, you will be charged an annual fee of $175. There is no monthly fee. So the total fee you pay for the first year is $175. The Fee/Credit Limit Ratio is $175/$700 = 25%. The way to interpret this is that a quarter of your credit limit is taken up in fees.
Total Fees to Credit Limit Ratio - 2nd Year Onwards - From the second year onwards, the annual fee is reduced to $49. However, you will now be charged a monthly fee of $12.50, which works out to $150 a year. That means that your total fees from the second year onwards is $49 + $150 = $199. Hence, the Total Fee to Credit Limit Ratio is $199/$700 = 28%. This means that you will be paying 28% of your credit limit in fees.
Below is a table that summarizes the calculations above.
| Year | Annual Fee | Monthly Fee | Fees/Credit Limit Ratio |
|---|---|---|---|
| Year 1 | $175 | $0 | $175/$700 = 25% |
| Year 2 | $49 | $12.50/month = $150 a year | ($49 + $150)/$700 = 28.4% |
Competition
We are going to compare Destiny to two types of credit cards. The first type have both annual fee and monthly fee. We are also going to compare Destiny with credit cards that have $700 credit limit. Below is a table showing these comparisons.
| Card | Annual Fee | Monthly Fee | Program Fee | Credit Limit | Fees/Credit Limit Ratio |
|---|---|---|---|---|---|
| Destiny $700 Limit | Y1=$75, then $49 |
Y1=$0, then $12.50/m or $150/y |
$0 | $700 |
Y1=$175/$700 = 25% Y2=$199/$700 = 28.4% |
| Milestone AF + MF $700 Limit | Y1=$175, then $49 |
Y1=$0, then $12.50/m or $150/y |
$0 | $700 |
Y1=$175/$700 = 25% Y2=$199/$700 = 28.4% |
| First Premier $700 Limit | $79 Y1, then $49 |
Y1=$8/m or $96/year, then $10.40/m or $124.80/y |
$55 | $700 |
Y1 = ($55+$79+$96)/$700 = 32.9% Year 2 ($49 + $124.80)/$700 = 24.8% |
| Total Visa | $75 Y1, then $49 |
Y1=$0, then $8.25/m or $99/y |
$89 | $300 |
Y1 = ($75+$89)/$300 = 56% Year 2 ($99 + $48)/$300 = 49% |
| Reflex Mastercard $750 limit | $125 | $0 | $0 | $750 | $125/$750 = 16.6% |
Compared to other Concora Credit Inc Credit Cards
The Destiny Mastercard is marketed by Concora Credit Inc and they have a couple of other credit cards like Milestone and Indigo. The card that bears the closest resemblence to the Destiny Mastercard is the Milestone Credit Card with $700 credit limit. In fact, they are essentially identical in every aspect. There is no difference getting either the Destiny or Milestone Mastercard.
Compared to other cards with annual fee and monthly fee
As the Destiny Mastercard has both an annual fee and monthly, I will be comparing this card with other cards with similar characteristics. In this review, I have picked both the Total Visa and First Premier Mastercard. As you can see from the table above, both the Total Visa and First Premier charge a program fee and you have to pay it before you can activate your card. The Destiny Mastercard does not charge a program fee. You will also notice that First Premier charges a monthly from the first year onwards (which is not the norm as most credit cards that have monthly fee only charge them from the second year onwards).
As you can see from the comparison table above, the Total Fee to Credit Limit ratio for Total Visa is really high. The reason is because Total Visa starts you off with a credit limit of $300. You can request for a credit limit increase only after one year and there is no guarantee that they will increase your credit limit. In fact, it is around 50%. That means that you will be paying near half of your credit limit in fees alone. The First Premier has similar Total Fee to Credit Limit ratio as Destiny Mastercard because the credit limit is $700.
The advantage that cards like Total Visa and First Premier have over Destiny is that they both have a mobile app. Having said that Destiny has been known to have a relatively short payment hold (up to 48 hours) after you pay your bills. Issuers like Total and First Premier can have longer payment holds on credit limits.
Compared to cards with $700 credit limit with no monthly fee
There are a few cards in the subprime space that have similar credit limits as Destiny but do not charge any monthly fee. One such card is the Reflex Mastercard. With the Reflex credit card, you either get a credit limit of $300, $500, $750 or $1,000. And if you pay your first six bills on time, your credit limit to $600, $1,000, $1,500 and $2,000 respectively. Reflex charges an annual fee of $125 and does not charge any monthly fee. The have a mobile app and allow you to pre-qualify with no impact on your credit score. Because they have no monthly fee, their Total Fee to Credit Limit ratio is better than Destiny's.
Our Take: Who should get this card?
As you can see from our analysis above, the Total Fee to Credit Limit Ratio is pretty decent compared to other subprime credit cards which only offer $300 as their credit limit. Furthermore
The one thing you have to bear in mind is that Destiny does not have any mobile app. So you have to manage your account from their online portal. You also can pay via debit card. Your $700 initial credit limit also does not change or increase over time.
To sum up, if you a rebuilder and looking for your first unsecured credit card, then you might want to consider the Destiny Mastercard Cash Back. Though the fees are quite high on an absolute basis, you can offset that by earning cash back on all purchases.
Reminder - As a reminder, as with all unsecured credit cards for bad credit, you should only apply for this card is you have been rebuilding for at least six months and have seen an improvement in your credit score and also have been paying on time. Destiny requires that you have no delinquent accounts so it is very important for you to pay off or settle your charge offs and collections before you apply for this card. If you have just faced a sharp drop in your credit, you should consider credit cards that do not check your credit and guarantee approval. But for those of you who have been discharged from bankruptcy, the Destiny Mastercard is an unsecured credit card that you want to consider because they will approved folks like you. And the reason is because your debts have essentially been wiped out and you are starting from scratch again.
Alternatives to Destiny
Reflex Mastercard - We have mentioned Reflex Mastercard earlier in our review and comparison. With a $125 annual fee for the $750 and $1,000 credit limit version (which will double after six months to $1,500 and $2,000), the Reflex Credit Card offers a good alternative to the Destiny Mastercard with potentially a higher credit limit and lower fees. You can go through a pre-qualification process with no impact on your credit score so I suggest you check it out.
Mission Lane Visa - The Mission Lane Visa has an annual fee that ranges between $0 and $59. You will get a credit limit increase after you pay your first seven bills on time. Starting credit limit is usually from $300 onwards and Mission Lane has a consistent track record of credit limit increases. They also allow you to go through a pre-qualification process with no impact on your credit score. Mission Lane has slightly stricter requirements to get approved and I sugges you check out our review before you apply.
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