Whether you’re trying to recover from bankruptcy, establish a credit history for the first time or raise your credit score, you might have difficulty opening a credit card. But the Indigo credit card is designed for people with low credit scores. So if you’re looking to build credit or raise your credit score, the Indigo Mastercard might be a good fit.
The card offers a competitive annual percentage rate and a low foreign transaction fee, which can be helpful if you travel. But the credit limit is low, and you might have to pay an annual fee.
What To Know About the Indigo Credit Card
Here’s everything you need to know about the Indigo credit card to determine if it’s the right choice.
1. You Can Use the Card To Build Credit
The Indigo credit card is for people with low credit scores. If you have a low credit score, you might not be able to get approved for a credit card. As a result, you can’t take steps, like making on-time payments, to raise your score. It’s a Catch-22. But the Indigo credit card is designed for this situation.
The Indigo credit card reports your payment history to the three major credit bureaus, meaning you can use the card to help you build credit by regularly paying your bill on time. Plus, you can check if you are pre-qualified for the card with a soft credit inquiry, which doesn’t impact your credit score.
2. It’s a Legitimate Credit Card
Celtic Bank in Utah issues the Indigo credit card. It’s an FDIC-insured bank, meaning that the Federal Deposit Insurance Corp. insures the bank’s accounts in case of bank failure. Even though FDIC insurance doesn’t necessarily impact credit cards, it indicates that the bank is legitimate.
Plus, the Indigo credit card is a Mastercard that includes additional protection — Mastercard ID Theft Protection for help with identity theft and zero-liability protection that ensures you’re not responsible for unauthorized charges.
3. It’s Easy To Pre-Qualify Without Impacting Your Score
There are two ways to determine whether you are qualified for a credit card: a hard credit inquiry, which can temporarily lower your credit score, or a soft credit inquiry, which does not impact your score. Even though a hard credit inquiry only affects your score temporarily, you might have additional concerns about lowering your score if you’re trying to raise it.
With the Indigo credit card, you can pre-qualify for the credit card with a soft credit inquiry that does not impact your score. It’s a helpful, low-risk way to review your options before deciding to move forward.
4. The Credit Limit Is Low
The Indigo Mastercard offers a credit limit of $300. Even though it’s not necessarily a low limit for a credit builder card, it can make it challenging to maintain a solid credit utilization ratio.
Your credit utilization ratio is the amount of credit you have available versus the amount you use. You can calculate your ratio by dividing the amount of credit you use by the available amount. For example, if you have a limit of $300 and use $150, your credit utilization ratio is 50%.
The ratio is one of the factors that credit bureaus consider when determining your credit score. It’s usually best to keep your utilization ratio under 30%.
5. The Card Offers a Standard APR
The average APR for credit cards is 24.14%, according to Forbes Advisor. The Indigo credit card has an APR of 24.9%. Even though it’s a higher rate than some other cards on the market, it’s a standard APR, especially since the credit card is for people with low credit scores.
It’s a good idea to shop around for the best fit since a few percentage points can make a difference when paying interest. But the APR is competitive for credit cards in this category. Plus, you’ll ideally pay your balance in full and avoid interest charges altogether.
6. The International Transaction Fee Is Low
With a 1% international transaction fee, the Indigo credit card offers a competitive perk for travel. Some credit cards don’t have any fees for international purchases, but others charge up to 3%. If you travel regularly, it’s a critical fee to note. But it might not matter as much if you’re not a regular traveler.
If you have a low credit score and are serious about raising it, the Indigo Mastercard could be a solid option. To take full advantage of the card, pay your balance in full and avoid interest charges. You might consider a different credit card with better perks or a lower APR as your credit score increases. But the Indigo credit card can be helpful if you’re committed to completing the necessary steps to raise your score.
- Can you use an Indigo Mastercard anywhere?
- You can use the Indigo credit card anywhere that accepts Mastercard, including foreign countries. It's a standard credit card designed for people with low or fair credit scores.
- Is there an annual fee for the Indigo Mastercard?
- The annual fee for the Indigo credit card ranges from $0 to $99. The cost is based on the bank's review of your credit profile and includes three annual fee options: $75 the first year and $99 every year after, $59 each year or $0 each year.
- It's important to consider annual fees to determine which card fits best. Some cards with annual fees come with additional perks like travel points, airport lounge access and other incentives that help offset the cost. The Indigo credit card does not offer additional perks, though. So it might be a good idea to consider if you can access a card from another bank without one.
- What bank is the Indigo credit card issued by?
- The Indigo credit card is a Mastercard-branded card issued by Celtic Bank. Celtic Bank is FDIC-insured, and the card comes with additional protection against fraud through Mastercard.
Information is accurate as of May 23, 2023.
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