Destiny Credit Card: Many Fees, Few Benefits

Applying for the Destiny Mastercard® is a bit like tempting fate: It does have some credit-building features, but it's far more expensive than other credit cards for bad to average credit (typically, FICO scores of 689 or lower).

The card’s annual fee is as much as $175, while the annual percentage rate, or APR, is 35.9% as of this writing — outrageous numbers considering that the card offers few perks to offset those costs.

Even if you have bad credit, you're not doomed to products like the Destiny Mastercard®. You can find plenty of secured credit cards and alternative cards that charge low or no annual fees and may even earn rewards.

Destiny Mastercard®: Basics

Card type: Fair credit.

Annual fee: As of December 2023, according to the card's website, the annual fee is $175 in year one; after the first year, the fee is $49.

Monthly fee: Up to $12.50 each month ($0 the first year).

Sign-up bonus: N/A.

Rewards: None.

APR: As of December 2023, according to the website, the purchase APR was 35.9%.

Accessibility

The Destiny Mastercard® is relatively easy to qualify for with limited or bad credit or even a prior bankruptcy. And because the Destiny Mastercard® is an unsecured card, you won't need to tie up hundreds of dollars in a security deposit to open the account.

You do need to be at least 18 years old and have a valid Social Security number.

Credit bureau reporting

The Destiny Mastercard® reports to the three major credit bureaus, Equifax, Experian and TransUnion. If you use the card responsibly — keeping your utilization rate below 30% and paying balances in full every month, for example — your credit scores will likely get a lift.

After doing the hard work of building your credit, treat yourself by getting a better card with fewer fees and more robust perks.

» LEARN: How to cancel a credit card in 6 steps

High annual fee

You’ll pay $175 in the first year of using the Destiny Mastercard®, an absolutely ridiculous amount considering that it doesn’t earn rewards or offer perks like cell phone insurance. The annual fee drops to $49 in subsequent years, but that amount is still high compared with other cards that don’t charge a cent.

Plus, the Destiny card’s annual fee is assessed upon account opening, which immediately reduces the amount of available credit.

You can get the annual fee back if you close the account and haven’t made any transactions with the card. Just note that canceling a credit card can have implications for your credit scores. (There is no upgrade path to another Destiny card with no annual fee.)

Regardless, paying an annual fee for a credit card doesn’t have to be your destiny, especially if you can come up with a security deposit (which, unlike an annual fee, is refundable). The Capital One Platinum Secured Credit Card and Discover it® Secured Credit Card are some of NerdWallet’s highly rated cards with no annual fee.

» MORE: How closing a credit card can impact your credit score

Overlimit and monthly fees

It's not surprising to find annual fees on unsecured credit cards for bad credit. What raises an eyebrow, though, is that you may also owe overlimit and monthly fees, which make the Destiny Mastercard® even more expensive to hold.

Overlimit fees are largely extinct, but among the vanishingly small number of issuers that still feature them, they're the price cardholders pay in exchange for the ability to charge beyond a card’s credit limit. For the Destiny Mastercard®, it's an opt-in feature with a fee that can be as much as $41. However, the card’s terms and conditions state that transactions that put you over the credit limit may still be refused, even if you've enrolled in overlimit coverage. You could end up paying for something without reaping its benefit.

A monthly fee is another indignity you’ll endure if you have the Destiny Mastercard®. As the name suggests, this fee is assessed every month for the “privilege” of using the credit card. The Destiny Mastercard® waives the fee in the first year, but after that, it charges $12.50 a month, or $150 a year. These monthly fees are on top of the annual fee.

Overlimit and monthly fees are the exception, not the rule, so you won’t have to look hard for a card without them. None of the cards on our list of best credit cards for bad credit charge them.

» SEE: 8 credit fees and how to avoid them

High interest rate

As of December 2023, the purchase APR on the Destiny Mastercard® is 35.9%. Balances that aren’t paid off by the due date will be charged this interest rate, making it extremely costly to revolve a balance. If you have this card, try to pay it off in full every month to prevent your debt from swelling.

Small credit limit

The maximum credit limit on the Destiny Mastercard® is $700, a fairly small amount that’s whittled down by the annual fee. After the $175 annual fee is charged to the account, you’ll be left with just $525 worth of spending power. So before you’ve made a single transaction of your own, your credit utilization ratio — the percentage of available credit you're using — is already at 25%. High utilization rates tend to correlate with lower credit scores.

Other credit cards for bad or no credit extend higher credit limits and don’t charge an annual fee. The maximum credit limit on the Varo credit card, for example, is $10,000 per billing cycle.

If you like paying a lot of money and getting very little in return, the Destiny Mastercard® is a great pick.