The Indigo® Mastercard® is marketed as an accessible solution for people with bad or thin credit files who want to improve or build their credit. Unlike a traditional secured credit card that requires a security deposit, the Indigo card doesn’t. But that doesn’t mean you won’t have to cover up-front costs to use the card.

The Indigo card charges a fairly high annual fee and has one of the highest annual percentage rates on the market. The Indigo card also doesn’t offer any cash back or rewards.

If you’re in the market for a credit card to build your credit, there may be better options. Here’s what you need to know about the Indigo Mastercard.

What Is the Indigo Credit Card and How Does It Work?

The Indigo credit card is an unsecured credit-building card that consumers with bad or fair credit can get approved for. You may prequalify for the card without a hard credit check. Cardholders have to pay a $175 annual fee the first year and $49 thereafter.

One of the selling points of the Indigo card is that it doesn’t require a security deposit. If approved, you’ll get a credit line of $700 — minus fees. So, if your annual fee is $175, your initial available credit will be $525. But no security deposit doesn’t mean you won’t have to pay for access to the card in other ways.

In addition to the annual fee, the Indigo card also charges a $12.50 monthly fee starting in the second year. In total, keeping the card for one year will cost $150 in monthly fees alone.

And if you opt in to these optional features, you’ll be presented with more fees:

— Over-limit coverage. If you’re opted in for over-limit coverage and go over your credit limit, you’ll pay a fee of up to $41 — but if your balance remains over your credit limit by your due date, you’ll be charged two additional over-limit fees.

— Credit protection. This lets you skip minimum payments for up to six months in case of involuntary unemployment, disability and other eligible events. The monthly fee is $1.49 per $100 on the ending balance of your billing statement. In other words, if your statement balance is $400, you’ll have to pay a $5.96 fee.

[Read: Best Credit Cards.]

Additionally, the Indigo card charges one of the highest APRs on the market — 35.9% compared with the 22.3% latest national average APR for credit card accounts, according to the Federal Reserve.

“The card also lacks rewards or meaningful perks,” says Alex Miller, founder of the points and miles site Upgraded Points.

“You have to understand that you’re going to be paying a lot in interest, and even fees, for using this card if you intend to carry a balance from month to month,” says Bruce McClary, senior vice president of membership and communications at the National Foundation for Credit Counseling.

“The main pros of the Indigo card include its accessibility for people with bad credit and the fact that it reports to all three major credit bureaus, which is key for credit-building,” Miller says. “It also has a relatively straightforward application process with prequalification available.”

[READ: Best Credit Cards for No Credit.]

How Does the Indigo Card Compare With Other Credit-building Cards?

A secured credit card can help you build or rebuild credit without having to pay hefty annual fees. However, for many of these cards, you’ll have to provide a security deposit — which can be as low as $49 — to establish your credit limit. But once your credit has improved, you may be eligible for an unsecured card and receive your security deposit back.

“These alternatives essentially offer better terms and more benefits while building your credit,” says Miller. “The only scenario where the Indigo card might be preferable is if someone has been denied for these other options and needs an accessible starting point for credit-building.”

[Read: Cards for Bad Credit]

How to Build or Improve Credit Using a Credit Card

Payment history and credit utilization are the two most important factors in credit scoring calculations, so if you want to build or improve your credit, consider applying these strategies regardless of the card you ultimately go with.

“Make your payments on time and only use a small portion of the card’s credit limit at once,” says Louis DeNicola, a freelance journalist and former U.S. News contributor who has covered personal finance for more than a decade. “The specific card you have doesn’t really matter.”

“Use the card for a small monthly subscription or bill and then set up auto pay for the full amount,” he says. “It’s a relatively hands-off way to use the card to improve your credit scores over time.”

If you can, pay your balance in full every month. “You don’t need to carry a balance to improve your credit — that’s a costly myth,” says DeNicola. If paying in full is not an option, “consider paying more than the minimum payment so you pay off those balances quickly,” says McClary. “That helps you avoid paying the most in interest while you’re using that card.”

Finally, “be patient with the process,” says McClary. “Your credit score is not going to magically go through the roof as soon as you open the credit card and use it for the first time.” Depending on your credit profile, he says you can expect to see some significant improvement in your score after six months of good credit behavior.

More from U.S. News

How to Avoid Credit Card Interest

How I Paid Off $6,000 in Credit Card Debt

What to Do if You Lose Your Job and Can’t Pay Your Credit Card Bills

I Have Bad Credit. Should I Consider an Indigo Credit Card? originally appeared on usnews.com

Update 03/16/26: This story was previously published at an earlier date and has been updated with new information.