Milestone Mastercard CashBack Rewards Review $300 Credit Limit
REVIEW

Milestone Has A 1.5% Cash Back Card

The Milestone Mastercard CashBack Rewards is one of the few credit cards for bad credit that allows you to earn 1.5% cash back on all purchases. The cash back is redeemed automatically monthly via statement credit and it will help offset the annual fee that you have to pay on the card. The card comes with a $300 credit limit and the annual fee is $75 for the first year and then $99 from the second year onwards. Though this is an improvement over their existing cards, the $300 credit limit does not increase and they still do not have a mobile app.

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 - The Milestone Mastercard CashBack Rewards allow you to earn 1.5% cash back on all 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.

Credit Limit - The starting credit limit for this card is $300 and will not increase thereafter.

Key Benefits

• 1.5% Cash Back - You can earn 1.5% cash back on all purchases. 1.5% cash back earning rate is also very competitive.


• Does Not Charge Monthly Fees - This card does not charge any monthly fee (unlike many other subprime credit cards).


• Low Foreign Transaction Fee - While most credit cards charge 3% foreign transaction fee, Milestone only charges 1%.

Shortcomings

• No Credit Limit Increases - This Milestone credit card has a low starting credit limit of $300 which does not increase.


• No Mobile App - They also do not have a mobile app and their online portal is not exactly mobile friendly.

Analysis: Does the Cash Back Offset the Fees?

To analyze any credit cards targeting those with bad credit, I always the "total fees to credit limit" ratio as a guide to see if the fees you are paying are reasonable or too high relative to what credit limit you will be getting. For this card, we have to adjust this ratio to factor in the cash back you will earn. We do this by subtracting from the total fees the cash back you will or are expected to earn each year.

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

Milestone also has a few other credit cards besides this version with the 1.5% cash back. These other versions have no cash back and also do not charge any monthly fees and all come with $300 credit limit which does not increase. The main differences is in the annual fee.

The other versions are the $35, $59 and the ($75 for first year, then $99) annual fee.

In terms of fees to credit limit ratio, the $35 annual fee version has a 11.67% ratio. The $59 annual fee version has a 19.67% fees to credit limit ratio while the ($75/$99) version has a 25% and 33% ratio for the first year and subsequent years respectively. For this cash back version, we will assume you will use up your full $300 credit limit a month (and pay in full). The cash back you will earn a month is 1.5% X 300 = $4.50. This works out to $4.50 X 12 = $54 of cash back a year. Based on this, the fees to credit limit ratio for the Milestone Mastercard CashBack Rewards is ($75-$54)/$300 = 7% for the first year and ($99-$54)/$300 = 15%.

Therefore, the best Milestone Card to get based on this measure is the one with the $35 annual fee (with no cash back), followed by the Milestone Mastercard with 1.5% CashBack Rewards. The table below summarizes these calculations and findings.

Card	Annual Fee	Credit Limit	Fees/Credit Limit Ratio
Milestone $35 AF No Cash Back	$35	$300	$35/$300 = 11.67%
Milestone $59 AF No Cash Back	$59	$300	$59/$300 = 19.67%
Milestone CashBack	$75 Y1, then $99	$300	Year 1 ($75-$54)/$300 = 7% Year 2 ($99 - $54)/$300 = 15%

Comparison with Other Cash Back Cards by Concora Credit

Milestone credit cards are marketed by Concora Credit, which also markets two other brands of credit cards called the Indigo and Destiny. And both of these happen to have cash back versions as well.

The Indigo Mastercard CashBack Rewards has the same 1.5% cash back, annual fees and credit limits as this Milestone cash back card. The Destiny Mastercard CashBack Rewards also has a 1.5% flat rate cash back on all purchases buy different fees and a higher credit limit.

For the Destiny CashBack version, the credit limit is $700 vs $300 for Milestone. For the first year, the Destiny cash back has an annual fee of $175. From the second year onwards, the annual fee is reduced to $49 from $175 but there will be a monthly fee of $12.50 which works out to $150 a year. Hence, the total fee from the second year onwards is $199. For the purpose of calculating the cash back you would earn a year, we assume the cardholder will max out his limit every month (and pay in full every month as well). Based on this assumption, the cash back earned a year would be (1.5% X $700 X 12 months = $126). And the total fees to credit limit ratio will be 7% and 10.47% for the first year and subsequent years respectively.

Based on this comparison, you are better off getting the Destiny Mastercard CashBack Rewards rather the Milestone version even though the fees are higher. The reason is because rather than getting a $300 credit limit, the Destiny cash back version has a $700 credit limit. The table below sumarizes our calculations

Card	Annual Fee	Monthly Fee	Credit Limit	Fees/Credit Limit Ratio Cash Back
Milestone CashBack 1.5% Cash Back	$75 Y1, then $99	$0	$300	Y1=($75 - $54)/$300 = 7% ($99-$54)/$300 = 15%
Indigo CashBack 1.5% Cash Back	$75 Y1, then $99	$0	$300	Y1=($75 - $54)/$300 = 7% Y2=($99-$54)/$300 = 15%
Destiny CashBack 1.5% CashBack	$175 Y1, then $49	Y1=$0, then $12.50/m or $150/y	$700	Y1=($175 - $126)/$700 = 7% Y2=($199 - $126)/$700 = 10.4%

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

Milestone is one of the few unsecured credit cards for bad credit that does not charge any monthly fees (annual fee only) and also accepts those who have just been discharged from bankruptcy. The addition of the 1.5% cash back version will doubtly makes this card more popular. It is just unfortunate that Milestone has only decided to add the 1.5% cash back to their ($75/$99) version rather than the $35 or $59 annual fee version.

Having said that, Milestone still has the same issues as their other cards. Firstly, the $300 credit limit is rather low and does not increase. Secondly, they still do not have a mobile app and their online portal isn't mobile friendly. If you do not mind just managing your account from your desktop computer or laptop, then it should not be an issue.
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 which issues Milestone) also has another card called the Destiny Mastercard with CashBack Rewards that comes with a $700 credit limit. This will probably be a better alternative for you.

To sum up, after reviewing and evaluating the Milestone Mastercard CashBack Rewards, we have decided to give it a 4 star rating for it's 1.5% cash back, absence of monthly fee and low foreign transaction fee. It's low credit limit (which does not increase) and lack of mobile prevents us from giving it a higher rating. If you get this card for rebuilding, you will not go wrong with it. My advice would be to use your full $300 credit limit but pay in full every time. Over time, you should probably get a card with higher limits once your score improve as $300 does not get you very far in terms of actual practical usage.