While the Destiny Mastercard is marketed as a card designed for building credit, the card’s exorbitant fees and low initial credit limit can make that a hard goal to achieve.
Rates & fees: Numerous fees and a sky-high interest rate can strain your wallet
Account fees
The Destiny Mastercard features extremely high fees for a credit-building card. You’ll need to pay a $175 annual fee for the first year and $49 for each year afterward. On top of the annual fee, you’ll also pay a monthly fee, which is an uncommon fee on most mainstream credit cards. This monthly fee is waived for the first year from account opening, but you’ll be charged $12.50 per month after that ($150 annually).
These two charges combine for $199 in costs annually to keep the account open. These fees cut directly into your already low initial credit limit and could make it difficult to focus on building your credit.
Interest rate
The Destiny Mastercard also has a very high variable interest rate of 35.90 percent. Very few cards on the market feature an APR this high, and carrying a balance can present an enormous risk of quickly accumulating high interest charges and increasing credit card debt.
Ideally, cardholders should always pay their statement balance in full at the end of each month to avoid accruing interest. Many other credit-building cards with a more favorable interest rate might be better if you need to carry a balance.
Credit limit: Small credit line limits your spending options
Your credit utilization ratio — the percent of credit you’re borrowing from your total credit availability — is an important factor in determining your credit score. Ideally, you want to keep your ratio to 30 percent or below. Going above this percentage over time can ultimately harm the growth of your credit score.
With an initial credit limit of just $700, you won’t have much room to work with if you want to stay under that 30 percent target. Assuming the Destiny Mastercard is your only source of credit, carrying a balance above $210 will result in a credit utilization ratio greater than 30 percent.
The card’s annual and monthly fees make this even more difficult. These fees are applied directly to your account and take up some of your limited total available credit.
Credit building: Minimal features
The Destiny Mastercard offers surprisingly few credit-building features. While it reports to all three major credit bureaus and considers applications from most credit histories, these are standard features on most credit-building cards. Further, the Destiny Mastercard doesn’t offer to increase your credit limit after a certain period of on-time payments or provide free FICO credit score access. Both of these features are great to have if you’re serious about boosting your credit score.
Rewards: No additional value
While this isn’t uncommon among credit-building cards, the lack of cash back or rewards on purchases especially stings considering the card’s annual and monthly fees. Also, with such a low credit line, there is no incentive to spend on this card.
Perks: Just more extra fees
The perks on this card are typical — fraud protection, autopay and 24/7 account access. However, overdraft coverage and credit protection just amount to more excessive fees on top of what’s already being charged.
Overdraft coverage is an optional feature allowing you to make purchases when you exceed your credit limit for a fee of up to $41. You’ll only pay one fee per cycle but can be charged two additional fees if your new balance stays over your credit limit after a billing cycle.
Credit protection covers you in events like emergencies, injuries or unemployment. For a fee of $1.49 per $100 of your balance, your monthly payments can be canceled for up to six months if you have a qualifying event.
These fees can add up and should be avoided unless absolutely necessary.
