Merrick Bank Secured Credit Card Review

I can’t think of an easier or less expensive way to establish credit than through a secured credit card. It is a perfect starter card and also an excellent tool for rebuilding damaged credit. Choosing one is a matter of getting the biggest benefit for the least amount of money.

On that front, the Merrick Bank Secured Credit Card is about average. Its costs are moderate but don’t expect anything more than the most basic benefits. In this article, I review it and three alternatives that can help you build or rebuild your credit. One of them may provide the solution to your credit challenges.

Main Points and Observations

• • The card requires an initial security deposit of at least $200.

• • It charges an annual fee of $36 for first year. Billed $3 per month thereafter, and a 22.70% Variable APR.

• • The card reports your monthly activity to all three major credit bureaus.

• • It provides access to your FICO score for free each month but does not offer rewards on purchases.

I like the card’s triple-bureau reporting, which is the most efficient way to build credit — if you pay your bills on time. It also provides a path to a credit limit increase, but similar cards offer a path to an unsecured credit line.

How to Qualify & Apply For the Card

It takes only minutes to apply online for the Merrick Bank Secured Credit Card. You must submit your security deposit before Merrick Bank will review your application. You can access the card’s application online by clicking the Apply Now button below, where you’ll be redirected to Merrick Bank’s website.

The card is available to US residents 18 or older, and you need to provide your contact information, Social Security number, and details about your income and debt. You cannot have a pending bankruptcy, any outstanding tax obligations, or an existing Merrick Bank Secured Credit Card account.

Merrick Bank will check to see if you meet the income, debt affordability, and identity verification requirements. Once you apply, you must make your security deposit within 20 days using a check, ACH, MoneyGram, Western Union, money order, or your bank’s online payment service.

Upon approval, you should receive your credit card within two weeks.

Benefits & Drawbacks to Consider

When evaluating a secured credit card such as the Merrick Bank Secured Credit Card, first check the annual fee and any other charges to understand the cost. Next, consider the credit limit, which typically matches the deposit you make, to see if it meets your needs.

Review the card’s benefits and reporting practices to credit bureaus to ensure it will help build your credit history. Finally, examine the interest rates and penalties for late payments, as these can diminish the card’s value if they are too high.

Benefits

• • Credit building: You can improve your credit score with responsible use and by making timely payments, as Merrick Bank reports your activity monthly to all three credit bureaus.

• • Controlled spending: You determine your credit limit with the deposit amount you choose ($200 minimum).

• • Credit line increases: After nine months of on-time payments, the bank may grant you an unfunded credit limit boost.

• • Free FICO scores: Merrick Bank provides free monthly access to your FICO score so you can track your credit progress.

• • $0 fraud liability: You get Mastercard® protection against unauthorized charges.

• • Easy qualification: You may be eligible for the card despite having no, limited, or poor credit.

Drawbacks

• • Annual fee: You must pay an annual fee of $36 for first year. Billed $3 per month thereafter.

• • High interest rates: The card has a moderately high interest rate, which you can avoid by paying your entire balance each month.

• • Initial deposit requirement: You need to provide a security deposit of at least $200 upfront, which locks your funds as long as you have the card.

• • No rewards: The card offers no rewards, so you don’t earn points or cash back on your purchases.

• • No graduation path: Merrick Bank does not offer to upgrade you to an unsecured card.

• • Credit limit constraints: Your spending power depends on your deposit amount.

• • Foreign transaction fee: You will incur additional charges for transactions you make abroad or in foreign currencies.

The Merrick Bank Secured Credit Card helps you build credit but charges recurring fees and moderately high interest. It’s a middle-of-the-road card because, even though you get free credit score checks and fraud protection, it includes extra charges for using it abroad and provides no rewards.

Other Cards Worth a Look

To compare this card with the following three competitors, check the fees and interest rates to see how much they cost. Next, look at the credit limit and determine if you can get more credit than your deposit. Finally, see if the issuer offers rewards and reports to all three credit bureaus to help build your credit.

The OpenSky® Secured Visa® Credit Card provides an online application that takes minutes to complete and skips the credit check for approval. Its annual fee is about the same as the Merrick Bank Secured Credit Card, but its APR is higher. You can choose your due date, and you can take up to 60 days to fund your security deposit.

OpenSky reports your monthly payment history to each credit bureau once you start using your account. Paying on time helps you build your credit score and adds positive data to your credit history.

I like the Discover it® Secured Credit Card because it offers several advantages and perks. These include cash back rewards, automatic account reviews for possible upgrades, additional security features, no annual or foreign transaction fees, and no penalty charge for the first late payment.

Cardholders also benefit from its highly ranked customer service and famous Cashback Match that automatically matches all the first-year cash back a new cardmember posts after the year ends. On the minus side, the card’s regular APR and interest rate on cash advances are higher.

The Capital One Platinum Secured Credit Card is unique in that you may qualify for a $200 credit limit with a deposit as low as $49, depending on your creditworthiness. It has no annual fee. The card resembles the Merrick Bank Secured Credit Card because of its fraud liability coverage, reporting to all three credit bureaus, and lack of rewards. But its APR is the highest in this group, and the maximum credit limit is only $1,000.

Capital One will review your account every six months to see if you qualify for a credit limit increase without an additional deposit. The issuer also may upgrade you to an unsecured account and return your security deposit to you as a statement credit.

Cardholder Reviews From Reddit

To evaluate online remarks about the card, first look for patterns in what people say, such as common complaints or praises. Next, consider the context and details in the reviews to judge their reliability. Lastly, balance the positive and negative comments to get an overall sense of user satisfaction.

Sparta2019 corrects another person’s misinformation about the lack of a grace period:

“This was not the case for me when I opened a Merrick-secured Visa two years ago. I had the normal grace period that most credit cards come with. Something may have changed, but I had no issues for the nine months I was a Merrick customer. I never paid them a cent of interest.”

Red1Blue wanted a partial deposit refund:

“I paid the annual fee for 12 months. I’ll wait three more months and then decide [whether to keep the card]. It is not a bad card. But I want to avoid paying an annual fee while not getting any rewards. I could move my money to a different card. Merrick would not permit a credit limit decrease so that I could take some of the money out of the deposit. They want the account closed to give the entire deposit back. That is a bummer. I’ll wait three more months and see where things stand.”

cugrad16 is no longer a fan:

“Maybe too late, but avoid the Merrick Bank Secured Credit Card! That’s total bad news. I opened an account in 2021, always paid on time, and was in full good standing until a few months ago. Suddenly, mysterious overcharges and ‘over-limit’ text alerts came through. They are on hold with their customer service forever, and they have been trying to figure it out for a day with no resolution. Multiple complaints were filed at BBB, with a lame response and no accountability.”

I found a wide spectrum of opinions about the card. Some folks complained about the lack of an upgrade path and/or the annual fee, while others had no problems with the card.

FAQs: How Much Is the Deposit?

The minimum amount is $200, but you can initially deposit up to $3,000. Your credit limit will equal your deposit amount at first. However, the bank may raise your credit limit without an additional deposit after nine months of timely payments.

You can make additional deposits of at least $50 at any time. The bank permits a maximum deposit balance of $5,000.

How Hard Is It to Get the Card?

It’s easy to get the card, as is the case with most secured credit cards. Merrick Bank may accept any credit background as long as you meet the card’s eligibility requirements regarding residency and age.

You must have a Social Security number to qualify for the card. Merrick Bank will deny your application if you are dealing with bankruptcy, owe income taxes, or if you already own another of its secured cards.

The bank checks your income and debts before approving your application. It doesn’t publish the maximum debt-to-income ratio it will accept — or the minimum income level.

The required security deposit removes the bank’s risk of loss should you default on the account, which is what makes approval easier. You have 20 days to fund your deposit. Otherwise, the bank will cancel your application.

Is Merrick Bank a Legit Credit Card Issuer?

Founded in 1997, Merrick Bank is FDIC-insured and recognized as a top-20 credit card issuer in the United States. It serves nearly 3 million cardholders and has extended almost $6 billion in credit. The bank claims to “thrive off the diversity of our employees, clients, and communities to help us build a stronger and safer environment for all.”

The Better Business Bureau has accredited Merrick Bank and awarded it an A+ rating. BBB customer reviews are less generous, averaging around one star out of five. Trustpilot gives Merrick Bank an Excellent rating of around 4.5 stars out of five.

In 2014, Merrick Bank settled a dispute with the Federal Deposit Insurance Corporation by paying customers $16.1 million for misrepresenting its PAYS Plan. The plan was supposed to provide monthly credit payments during unexpected life events such as hospitalization or unemployment.

Despite that decade-old legal hiccup, I see no reason to question Merrick Bank’s legitimacy or trustworthiness.

Is a Secured Credit Card Good For a First Card?

Consumer experts often recommend a secured credit card as a first card because it helps instill financial responsibility and build creditworthiness. Here’s a look at the key benefits of using a secured credit card as your first card:

REASON	EXPLANATION
Builds Credit History	Making on-time payments with a secured card can help establish a good credit history, which is essential for future financial activities.
Lower Risk of Creating Unmanageable Debt	Because the credit limit is often the deposit amount, you can reduce the risk of debt.
Credit Limit Control	You can set your credit limit based on the deposit you make, giving you control over your spending limit.
Improves Credit Score	Responsible use of a secured card, including paying the full balance on time, can improve your credit score over time.
Secured with Deposit	The cash deposit minimizes the bank’s risk, making it easier to get approved for a secured card than an unsecured one, even if you have no credit history.
Potential for Graduation	Some secured cards (but not this card) allow you to upgrade to an unsecured card after demonstrating responsible use and payment behavior.
Potential for an Unfunded Credit Limit Increase	The issuer may increase your credit limit without an additional deposit if you use the card responsibly.

College students may have a better alternative as student credit cards are ideal first cards because of their relaxed qualification requirements. If you’re an undergraduate, consider one of these as your introduction to credit cards.

Can I Be Denied a Secured Credit Card?

Yes, an issuer can deny you a secured credit card. Even though you provide a deposit as collateral, the issuer may still check your credit history, income, and debts to assess your risk. If you’re too risky, the issuer may reject your application. If it turns you down, you’ll receive an Adverse Action Notice explaining why.

This notice details the specific reasons for the denial, such as a low credit score or insufficient income. The notice is valuable because it shows you what areas of your financial profile need improvement. Addressing these issues by paying down debt and correcting errors on your credit reports can help you build creditworthiness and increase your approval odds.

You can appeal a rejection by correcting inaccuracies in your application, cleaning up your credit reports, or improving your credit factors and then reapplying. Alternatively, you can apply to a different secured credit card issuer that doesn’t perform a credit check.

How Does the Card Compare to the Merrick Bank Double Your Line® Mastercard?

The bank also issues an unsecured card, the Merrick Bank Double Your Line® Mastercard. It offers consumers with fair credit an adequate initial credit limit and the opportunity to double it through responsible use. Qualified applicants receive a competitive APR, and your creditworthiness determines the annual fee you pay.

This chart compares the two Merrick Bank credit cards:

	Merrick Bank Secured Credit Card	Merrick Bank Double Your Line® Mastercard
Type of Card	Secured	Unsecured
Annual Fee	$36 for first year. Billed $3 per month thereafter	Up to $72, depending on your creditworthiness
APR on Purchases	22.70% Variable	Up to 29.70%
Setup Fee	None	It depends on your creditworthiness
Credit Building	Reports to all three credit bureaus to help build your credit history	Also reports to all three credit bureaus
Credit Limit	Set by the deposit amount and can increase over time.	It starts with a preset limit, which can double after seven months of on-time payments.
Deposit Required	Yes, the credit limit is equal to the deposit	No deposit required
Rewards	None	None
Special Features	The credit limit can increase with responsible use	Credit line doubles after seven months of on-time payments
Eligibility Requirements	It is easier to qualify with a poor or limited credit history	Requires a fair credit history for approval
Foreign Transaction Fee	Applicable	Applicable
Fraud Protection	$0 fraud liability	$0 fraud liability
Free Credit Score Access	Yes	Yes

I do not recommend the Merrick Bank Double Your Line® Mastercard. It requires fair credit, has high costs, and pays no rewards. You can get better cards if you have a fair FICO score.

This Card May Be For You If…

• • You want to establish or improve your credit: This card reports to the three credit bureaus. If you pay on time, it can help you build a good credit history.

• • You can afford a deposit: You need to put down a deposit that will be your credit limit, so it’s good if you have some money to start with.

• • You’re OK with fees: The card has annual fees and interest charges, so you should have enough to cover those before you apply.

The Merrick Bank Secured Credit Card is a reasonable choice, but you may want to select the Discover it® Secured Credit Card instead for the reasons I stated in this review. Whichever card you get, remember to pay your bills on time and keep your unpaid balances low if you want to efficiently boost your credit score.