Indigo Mastercard CashBack Rewards Review $300 Credit Limit
REVIEW

Indigo Adds 1.5% Cash Back to Lineup

Indigo offers unsecured subprime credit cards with different annual fees to rebuilders with bad credit. The Indigo Mastercard with CashBack Rewards is their latest offering that comes with a 1.5% cash back for every purchase that you make. This makes it a much more attractive credit card though it still the same shortcomings as their other credit cards.

Pros and Cons

Pros	Cons
1.5% cash back on all purchases No Monthly Fee	Low $300 Credit Limit Credit Limit does not increase over time No Mobile App

Card Details

Annual Fee	$75 during first year $99 from second year onwards
Regular APR	24.9%
Foreign Transaction Fee	1%
Starting Credit Limit	$300
Cash Back	1.5% on all purchases

1.5% Cash Back - This card offers 1.5% flat rate cash back on all your purchases. Cash back is redeemed automatically via statement credit the following month.

Fees - The annual fee is $75 for the first year and increases to $99 from the second year onwards. Indigo does not charge any monthly fees.

Credit Limit - The starting credit limit for this card is $300 and it will remain at this level forever as Indigo does not increase credit limits for their cardholders.

What We Like?

• 1.5% Cash Back - Not many unsecured credit cards for bad credit folks offer cash back rewards. This card not only offers that, but at 1.5% for all purchases, it is very competitive as well.


• Does Not Charge Monthly Fees - All Indigo credit cards do not charge any monthly fee and this cash back version is no exception.


• Low Foreign Transaction Fee - The 1% foreign transaction fee that Indigo charges is lower than the usual 3% charged by most credit cards.

Shortfalls

• No Credit Limit Increases - Not only is the starting credit limit of $300 very small, but that limit does not ever increase.


• No Mobile App - Indigo does not have any mobile and their online portal isn't mobile friendly. So you would have to manage your account online from a desktop computer.

Analysis: Does the Cash Back Offset the Fees?

Let's analyze the Indigo Mastercard CashBack Rewards. For this analysis, I use two measures. The first thing we would want to know is the fees to credit limit ratio. In fact, this is the measure we use for every credit card targeting people with bad credit that we evaluate. The lower the ratio is, the better. The best would be to have a card with no annual fee.

The second measure we look at is to actually look at the same ratio (ie fees to credit limit) but factoring in the cash back you would earn (this applies to cards with cash back). We assume that a cardholder will use their full credit limit (and pay in full every month) and so maximize their cash back earnings. We then subtract the cash back earnings from the total fees (since cash back does offset the fees you pay) and rerun the fee (less the cash back) to credit limit ratio.

Fees to Credit Limit Ratio Compared to Indigo's other credit cards

Aside from this 1.5% cash back version, Indigo will present you either one of three offers if you get pre-approved. All of their cards come with a $300 starting credit limit that does not increase ever. You could be presented with version that have the following annual fee structure: $0, $59 or ($75 for the first year, then $99) versions. As a recap, the 1.5% cash back version also has an ($75 first year, then $99 thereafter) annual fee structure.

In terms of fees to credit limit ratio, the best version is the one with no annual fee. The second best turns out of be the card we are evaluating (the Indigo Mastercard CashBack Rewards). As you can see from the table below, during the first year, the (fees less cash back earned) over credit limit ratio is 7%. From the second year onwards (with the higher $99 annual fee), the fees to credit limit ratio increases slightly to 15%. This is better than the $59 annual fee version with a ratio of 19.67%.

Card	Year	Annual Fee	Monthly Fee	Credit Limit	Fees/Credit Limit Ratio No Cash Back	Fees/Credit Limit Ratio Cash Back
Indigo $0 AF No Cash Back	Same Fee Throughout	$0	$0	$300	$0/$300 = 0%	N.A
Indigo $59 AF No Cash Back	Same Fee Throughout	$59	$0	$300	$59/$300 = 19.67%	N.A.
Indigo CashBack	Year 1	$75	$0	$300	$75/$300 = 25%	($75-$54)/$300 = 7%
Indigo Cash Back	Year 2	$99	$0	$300	$99/$300 = 33%%	($99 - $54)/$300 = 15%

Comparison with Other Subprime Credit Cards Offering Cash Back

Indigo is issued by Concora Credit, which also issue the Milestone and Destiny credit cards. Both these cards also have a cash back version and we will compare them with the Indigo Cash Back Rewards Mastercard here.

The Milestone Mastercard with Cash Back Rewards is essentially identical with Indigo in terms of fees and 1.5% cash back. The Destiny Mastercard with CashBack Rewards also has a 1.5% flat rate cash back on all purchases. It has a higher annual fee and also charges a monthly fee from the second year onwards. But it has a much higher credit limit at $700. If you fully use your full credit limit, you can earn $126 in cash back a year ($10.50 a month). In contrast, both the Indigo and Milestone cash back version only allow you to earn a maximum of $54 a year in cash back (1.5% X $300 = $4.5 a month). From a fee to credit limit ratio basis, the Destiny $700 limit cash back version has the lowest ratio at 15% from the second year onwards among the three cards. That means you get the most bang for the buck (in terms of credit limit) for the fees that you pay for the card.

Card	Year	Annual Fee	Monthly Fee	Credit Limit	Fees/Credit Limit Ratio No Cash Back	Fees/Credit Limit Ratio Cash Back
Indigo CashBack	Year 1	$75	$0	$300	$75/$300 = 25%	($75-$54)/$300 = 7%
Indigo Cash Back	Year 2	$99	$0	$300	$99/$700 = 33%%	($99 - $54)/$300 = 15%
Milestone CashBack	Year 1	$75	$0	$300	$75/$300 = 25%	($75-$54)/$300 = 7%
Milestone Cash Back	Year 2	$99	$0	$300	$99/$700 = 33%%	($99 - $54)/$300 = 15%
Destiny CashBack	Year 1	$175	$0	$700	$175/$700 = 25%	($175-$126)/$700 = 7%
Destiny CashBack	Year 2	$49	$12.50/month = $150 a year	$700	($49 + $150)/$700 = 28.4%	($199 - $126)/$700 = 10.4%

Our Take: 1.5% is Great But Credit Limit Remains at $300

It is great that Indigo has added a cash back version to it's credit card line up. And 1.5% flat rate cash back for all purchases is very competitive as well. Like other Indigo credit cards, this version also does not charge any monthly fees.

Despite this, the Indigo Mastercard with CashBack Rewards faces the same limitations as Indigo's other cards. They lack a mobile app and it's online portal is not mobile friendly and you have to manage it only from a desktop computer or laptop. However, the biggest shortfall is the low starting credit limit of $300 which does not increase at all over time.

Many of you will be attracted to the 1.5% cash back feature but uncertain about the low $300 credit limit. Fortunately, Genesis Financial (which is the company behind Indigo) also has another card called the Destiny Mastercard with CashBack Rewards that comes with a $700 credit limit which you should consider instead.

To sum up, after reviewing and evaluating the Indigo Mastercard with CashBack Rewards, we have decided to give it a 4 star out of 5 for it's competitive 1.5% cash back program and it's absence of monthly fees. It's lack of mobile app and low credit limit which does not increase prevents us from giving it a higher rating.