Indigo Credit Card Review
Right off the bat, we’re going to go ahead and say that the Indigo card isn’t the greatest. Yes, you can avoid hurting your credit score through qualification, and yes, you can get approved for it even if you have a bad credit score. Still, despite all of these things, the card isn’t the best option for reconstructing your credit standing.
Oddly enough, the card is harder to land than most of the best cards out there that are secured. On top of that, every year you may find yourself spending a hundred dollars more than these same cards. To its credit, however, the Indigo card is one of the top unsecured credits cards you can have if your credit score happens to be bad. So, if you need something like a small emergency loan, this card is probably the one for you.
- The card is unsecured, which can be helpful in building up your credit
- You can undergo pre-qualification by using a soft inquiry
- It reports to all three credit bureaus
- APR variable is high for purchases
- Annual fee can reach 99 dollars (exact numbers depends on your credit score).
- Lay payments fees can be 38 dollars
Detailing the Pros
If you’re coming right out of high school or college and want to build up your credit, this Mastercard can help with the task. Here are some advantages to using it:
The Card Is Unsecured and Is Thus a Good Tool for Building Credit
You have quite a few options to look into when you’re trying to build up your credit. Acquiring a second card is always a viable option, but you’ll have to deposit cash to trade for a credit line. But the more natural route would be to apply for an unsecured card like the Indigo Mastercard because you will more than likely qualify. Both routes have their advantages, but one route doesn’t require you to unnecessarily part ways with your cash.
No Hard Inquires Necessary
Even if your credit history is a little spotty–lack of payments, gaps in payments, etc.–you won’t necessarily be immediately disqualified from getting the Indigo Mastercard. Pre-qualification is available and doesn’t require that your credit reports undergo a hard inquiry. The most important thing to remember about that, though, is that pre-qualification does not mean you’re going to get approved. It’s just a way of getting you in the door easier. However, if you do decide to really apply for the card, there will be a hard inquiry into the files of your credit.
Card Is with the Three Major Bureaus
The Indigo Mastercard is designed to assist you will building, your credit score. In order to do this, the card reports how you use it to all three major credit bureaus. It does this to make sure that you are using it responsibly. If you are, then in the future, your credit score should be such that you can apply for a card that offers you better rewards.
Here are some things you need to keep in mind:
You Can Use a Soft Inquiry to Pre-Qualify for the Card
The Indigo card has a qualification process built for people with less than great credit. It’s called a “soft inquiry.” By using a soft inquiry, you’ll be able to see if you qualify for the card without having to actually submit an application for it. By doing the process this way, you avoid a hard inquiry process, which could reduce your credit standing even further–temporarily. Pre-qualifying doesn’t guarantee that you’ll be approved for the card.
The Card Helps You Build up Your Credit
As previously stated, the Indigo Mastercard is meant for those who have bad credit. It also answers to major credit bureaus each month like every other credit card out there. In other words, if you pay your bills consistently and on time each and every month, your credit score will improve. Track your progress online to keep yourself up to date.
The Card Can Possibly End up Being Free to Use
Depending on the state of your credit, the Indigo Mastercard has various annual fees. It can be anywhere from 0 dollars, to 59 dollars, or 75 dollars for your first year. Once your first year is up, however, the card becomes 99 dollars. These ranges are pretty random, so it makes sense if you want to aim for a card with more stable costs. If an emergency loan isn’t something that you’re after than a secured card it the better option for you anyway.
The unfortunate fact is that annual fees exist if your credit score isn’t immaculate and you’re looking around for an unsecured card because of it. The Indigo Mastercard is unsecured, so unlike its counterpart in the Capital One MasterCard, it will have annual fees for you (again, if your credit is a little shaky).
Only you know how responsible you are. If you feel this is a price you can handle, this a price you can pay every time, and your okay with paying this price as a way to build up your credit, then by all accounts, you should be fine. There is an alternative method, however. If you want, you can try applying for a credit card made by retailers. A retail credit card can increase your credit slowly, but you have to be able to pay off your dues on time and in full every month, consistently. This shouldn’t be too bad if you keep your purchases with the card light.
The Card Has Really High-Interest Rates
If you carry a monthly balance with this Mastercard you’re going to be watching your rates rack up quickly. The card accrues an annual rate that sits far above the usual averages of secured credit cards and general credit cards. The purchase rate for this thing can rest around 23.90 percent, and your late payments can end up being 38 extra dollars. So, if possible, you will want to pay off whatever you owe as fast as you can. If you don’t, this card will tear you down instead of helping to build you up.
How to Maximize This Card
If you plan on getting this card, you should also make a plan to back out of it. You probably don’t want to have to pay the annual fee for a second time, so be sure to keep up to date with your credit as you progress with the card.
As you make your way through the year, if you’ve been responsible with the card, your credit score should have a good look to it, and by extension, you should be able to get yourself a better credit card by the time the year is over. Definitely reward yourself with one that has no annual fees and a much lower APR purchase rate.
What’s the Competition?
There are to other cards you can compare this one with, and both are from Captain One. You have the Capital One Secured Mastercard and the Quicksilver Cash Rewards card.
Let’s look at QuickSilver first.
You may want to consider this one over the Indigo if you can qualify for it. It’s slightly better, its a cash back card, and has an annual fee of 39 dollars. With every purchase, you make with this card you will collect back 1.5 percent of your cash. The one thing to watch out for with this one is the 26.98% APR rate, as it is a little higher than the Indigo Mastercard.
Now for the Secured Mastercard.
If you just don’t like the sound of annual fees, then this card will probably be your best bet. It does require a cash deposit, though. You’re looking at figures like 49 dollars, 99 dollars, and maybe even 200 dollars (again, exact amounts depend on your credit score). If your first five monthly payments are taken care of on time, then you may be able to obtain a higher credit limit.
This is a card for those who don’t have credit or have credit that could be better. Does that sound like you? Are you just trying to get your credit score started? Are you trying to resuscitate the score you already have? If you can answer yes to any of these questions then this card is meant for you. All you have to do is keep yourself responsible. Pay off your credit dues on time, pay them off in full and do it each and every month. If you do, there’s no doubt that your credit score will climb. If you don’t, the opposite will happen, but that can be said about most credit cards. Parting with your cash to pay off your annual fee will be a painful experience but a necessary one to get your credit in good standing. The trick is to keep your eye on the goal. Pay off this annual fee once, and you may not have to pay another annual fee again down the line.
David is a financial expert who graduated from the University of Fordham (Master in Finance) in 2001. He has 10+ years of experience in private equity and wealth management. With strong expertise in senior-level financial planning, personal financial analysis, and mortgages, David knows his way around personal finance. Before working at CCR he used to be a financial analyst at McKinsey.
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