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Concora Credit is removing the ability to pre-qualify for its credit cards, so this page is out of date. We're updating this article to reflect these changes.
The Indigo credit card is an option if you're hoping to rebuild your credit, but it may not be an ideal one.
The card, issued by Utah-based Celtic Bank, comes in a variety of different colors and designs, but don’t let that distract you from its potentially high fees. Depending on the offer you get, it can provide a costly pathway toward building credit. Even for those with poor credit, better options exist.
Here’s what you need to know about the Indigo Mastercard.
» MORE: NerdWallet’s best credit cards for bad credit
🤓Nerdy Tip
The Indigo credit card is among a handful of products — including the Milestone card and Destiny card — serviced by Concora Credit and targeting those with bad credit. All are unsecured cards, meaning they don't require an upfront security deposit, but they do charge expensive fees. Check out our guide to all of the Concora Credit cards here.
1. You can pre-qualify without hurting your credit scores
Before formally applying for the Indigo card, you can pre-qualify on the card's website to check your likelihood of approval (and the annual fee you’re likely to pay) without affecting your credit scores. This way, you know where you might stand.
But pre-qualification doesn’t mean you're approved; it’s more of a soft “yes” or a “probably.” If you agree with the tentative terms, you’ll still have to submit a full application for review, which will come with the usual temporary ding to your credit scores.
» MORE: Explore credit cards that don't run a credit check
2. It can help you build credit ...
The Indigo credit card reports to all three major credit bureaus: TransUnion, Equifax and Experian. That's ideal for someone trying to build credit because these bureaus collect the information used to calculate your credit scores.
Payment history is a key factor in those scores. As long as you stay on track with payments, you can qualify for better credit cards in the future.
» MORE: What makes up your credit score?
3. ... But its potential annual fee may cost you
Whether you pay an annual fee will depend on your creditworthiness. The Indigo credit card has different terms with annual fees ranging from $0 to $99. The higher the annual fee, the less appealing this card becomes. After all, you could instead save up a few hundred dollars for a secured credit card deposit, which would allow you to build credit and get that deposit back eventually as long as you make on-time payments. (You will not be able to recover the cost of an annual fee.)
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You can also explore your pre-qualification options elsewhere to find out if you can qualify for better offers.
For lower fees, consider: The $0-annual-fee Capital One Platinum Secured Credit Card can start you off with a credit limit of $200 for a deposit of $49, $99 or $200, depending on what you qualify for. You can also get access to a higher credit line in as little as six months of paying on time. Whatever amount you deposit, you’ll eventually get back if you maintain a good payment history. And it doesn't have the high annual fee of the Indigo card.
🤓Nerdy Tip
Some alternative secured credit cards allow for a flexible security deposit. For instance, the Chime Secured Credit Builder Visa® Credit Card let you choose your deposit amount, which sets your credit limit. This card also skips the fees and interest charges because it doesn't allow you to carry a balance from one month to the next.
» MORE: NerdWallet's best secured credit cards
4. And those fees can lower your initial credit limit
Let's say you have an account with a credit limit of $300 and a $75 annual fee. In that case, your initial credit limit is really $225 until you pay the fee. If the terms you prequalify for also indicate that you’ll pay setup or maintenance fees, those may decrease it further.
A low credit limit also makes it easy to run a high credit utilization, which can hurt your credit even as you’re working to improve it. It’s not worth paying a high annual fee for a credit limit that’s floor-low.
For a decent credit limit and low fees, also consider: If you have low-to-fair credit or cash flow, the Petal® 1 "No Annual Fee" Visa® Credit Card might be an option for you. It offers a decent credit limit ranging from $300 to $5,000, depending on eligibility. Petal’s Leap program may also allow you to qualify for a higher credit limit than the one you’re granted if you make at least six consecutive monthly payments or pay 15% of your statement balance, whichever is greater. Terms apply. The card earns up to 10% cash back when you use the card to make purchases with select merchants.
» MORE: Can't get a credit card? Try these alternative options
5. The APR runs high
A high interest rate is not unheard of on a card that caters to applicants with poor credit. Nevertheless, it means that carrying a balance will be expensive.
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As of May 2023, the APR on the Indigo credit card is 24.90%. It’s not the highest interest rate among credit cards for those with poor credit, but it’s still costly if you can't pay your balance in full each month.
For no interest charges, also consider:The Chime Secured Credit Builder Visa® Credit Card doesn’t charge a security deposit upfront. You must have a qualifying Chime® account to fund the card's flexible security deposit, but you get to choose an amount that aligns with your budget. The card doesn’t charge fees or interest because you can’t carry a balance from one month to the next.
See more from Chime®
Chime says the following:
The secured Chime Credit Builder Visa® Credit Card is issued by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC, pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa credit cards are accepted. Please see the back of your card for its issuing bank.
To apply for Credit Builder, you must have received a single qualifying direct deposit of $200 or more to your Checking Account. The qualifying direct deposit must be from your employer, payroll provider, gig economy payer, or benefits payer by Automated Clearing House (ACH) deposit OR Original Credit Transaction (OCT). Bank ACH transfers, Pay Anyone transfers, verification or trial deposits from financial institutions, peer to peer transfers from services such as PayPal, Cash App, or Venmo, mobile check deposits, cash loads or deposits, one-time direct deposits, such as tax refunds and other similar transactions, and any deposit to which Chime deems to not be a qualifying direct deposit are not qualifying direct deposits.
Based on a representative study conducted by Experian®, members who made their first purchase with Credit Builder between June 2020 and October 2020 observed an average FICO® Score 8 increase of 30 points after approximately 8 months. On-time payment history can have a positive impact on your credit score. Late payment may negatively impact your credit score.
On-time payment history may have a positive impact on your credit score. Late payment may negatively impact your credit score. Chime will report your activities to Transunion®, Experian®, and Equifax®. Impact on your credit may vary, as Credit scores are independently determined by credit bureaus based on a number of factors including the financial decisions you make with other financial services organizations.
Money added to Credit Builder will be held in a secured account as collateral for your Credit Builder Visa card, which means you can spend up to this amount on your card. This is money you can use to pay off your charges at the end of every month.
Out of network ATM withdrawal and over the counter advance fees may apply. See here for details: https://www.chime.com/chime-credit-builder-visa-credit-card-agreement/
What's next?
» Explore other options in credit cards for bad credit, including cards with lower fees.
