Credit One vs. Milestone
When you have bad credit, it can be very difficult to rebuild it. Past mistakes can follow you, and you may have to open a new account in order to start rebuilding your credit history. At the same time, there are very few companies that will offer new accounts to those with poor credit, without a security deposit.
Credit One and Milestone are two cards that are designed for people with bad credit to help them rebuild their credit histories. Let’s take a look at these two cards, and see which one is right for you.
Unlike most cards offered to those with bad credit, the Credit One Bank® Platinum Visa® for Building Credit also offers rewards for spending. Depending on the card you are approved for, you will receive: 1% cash back on eligible gas, groceries, mobile phone service, Internet service, and cable or satellite TV service. Or, you could earn 1.1% cash back on eligible dining purchases and 1% cash back on all other eligible purchases.
Depending on your credit profile, your account may or may not have a grace period. If your account does have a grace period, your due date will be at least 24 days after the close of each billing cycle, and interest will not be charged on any purchases if your entire statement balance is paid in full by the due date each month. If your account doesn’t have a grace period, then interest will charged on all of your purchases from the posting date. Either way, all accounts are charged interest on cash advances from the posting date.
Once you are approved for your account, it will have an annual fee of between $0 and $99 depending on your credit profile, and there is a $19 annual fee to order additional cards for authorized users. The standard APR for purchases will be 15.65% to 24.15%, based on your creditworthiness when you open your account. For cash advances, the interest rate will be 17.90% to 25.15%, also based on your creditworthiness. Both of these rates are variable rates which are based on the prime rate.
The Milestone Mastercard is offered by Mid America Bank & Trust Company through a partnership with Genesis Bankcard Services to people who need to rebuild their credit. You can complete the pre-qualification form, and find out if you are prequalified based on your credit profile. Depending on your creditworthiness, you could receive a card with a $35 annual fee, a $59 annual fee or one with a $75 fee the first year, and $99 thereafter. There is also an authorized user fee of $25 each year to add an additional cardholder.
Regardless of which offer you receive, the standard interest rate will be 23.9% for purchases and 29.9% for cash advances. 29.9% is also the penalty APR that applies if you make a late payment. This card offers a standard grace period of 25 days. This means you can avoid interest charges if you pay your entire statement balance in full before the due date, which is 25 days after your statement period ends.
Which card is right for you?
Both of these cards have their own strengths and weaknesses. On one hand, the Credit One card can offer a lower standard interest rate, and has no penalty interest rate. Otherwise, those who apply for the Credit One card will have a wide variety of interest rates and annual fees they might be charged, depending on their credit. However, the Credit One card does offer modest rewards for spending while the Milestone card does not.
The Milestone card has just one standard interest rate of 23.9% given to all applicants, regardless of their credit. Milestone cardholders can also be assured they will have the opportunity to avoid interest charges by paying their balance in full, while Credit One customers may or may not receive a grace period.
Nevertheless, these are both very similar products that can appeal to people with bad credit who want to rebuild their credit history without opening up a secured card account. Unlike the secured cards that are marketed to people with bad credit, both the Milestone and the Credit One Bank® Platinum Visa® are standard, unsecured cards that do not require payment of a refundable security deposit.
Tips for rebuilding your credit
Regardless of which card you choose, you should do everything possible to make each payment on time. Making timely payments is the most important factor on your credit score, and is the best thing that you can do to improve it quickly. After a year of on-time payments, you may be able to qualify for a different credit card with a lower annual fee and more favorable terms.