What the Merrick Bank Credit Card Is
The Merrick Bank Credit Card is a secured credit card issued by Merrick Bank, a lender that works with people rebuilding credit. You put down a cash deposit, and that deposit becomes your credit limit. The card reports your payment activity to the three major credit bureaus — Equifax, Experian, and TransUnion — so on-time payments build your credit history.
This is not a prepaid card. You are not spending the money you deposited. Instead, you make purchases on credit and pay a monthly bill, just like any other credit card. The deposit sits in a savings account as collateral while you use the card.
Merrick Bank is a subsidiary of Customers Bancorp and has been issuing secured cards since 1997. The card is designed for people with no credit history, damaged credit, or a recent negative event — bankruptcy, late payments, collections — that made other cards unavailable.
Key Takeaways
- Your cash deposit becomes your credit limit, and you need between $500 and $15,000 to open the account.
- You pay an annual fee of $29 to $39 depending on your credit tier, plus interest on purchases if you carry a balance.
- On-time payments are reported to all three credit bureaus, which is the main reason to use this card instead of a prepaid alternative.
- After 18 months of on-time payments, Merrick may convert your account to an unsecured card and return your deposit.
- The card has no rewards, no cash back, and no sign-up bonus — it exists to rebuild credit, not to earn benefits.
Deposit Requirements and Credit Limits
You must deposit between $500 and $15,000 to open a Merrick Bank account. Your credit limit equals your deposit amount. If you deposit $1,000, your limit is $1,000. This deposit is held in a savings account in your name and earns a small amount of interest — currently around 0.01% APY, though this changes with market conditions.
You can request a credit limit increase after six months of on-time payments. If approved, you can add more money to your deposit to raise your limit. For example, if you started with $500 and want a $1,000 limit, you would deposit an additional $500.
The deposit is not a fee. It is your money, held by the bank. You can close the account and retrieve it at any time, though closing the account may affect your credit score because it reduces your available credit and shortens your credit history.
Fees and Interest Rates
Merrick charges an annual fee based on your credit tier. The fee ranges from $29 to $39 per year, depending on your creditworthiness at the time you open the account. This fee is charged once a year, usually on your account anniversary or the first billing cycle.
The interest rate (APR) on purchases is not fixed and depends on your credit profile. Rates typically range from 18.9% to 24.9%, though some cardholders report rates as high as 27.9%. This is higher than rates on unsecured cards for people with good credit, but standard for secured cards in this market.
There is no grace period on purchases. Interest accrues when ready, even if you pay your full balance by the due date. This means carrying any balance costs you money right away. To avoid interest charges, you must pay the full statement balance before the due date each month.
Late fees are $25 for the first late payment and $35 for subsequent late payments within six months. Merrick also charges a returned-payment fee of $25 if a check or automatic payment bounces.
How to Open an Account
You can open a Merrick Bank account online at merrickbank.com. The process takes about 15 minutes and requires basic personal information: your name, address, Social Security number, date of birth, and employment details.
Merrick performs a hard inquiry on your credit report, which temporarily lowers your credit score by a few points. This inquiry stays on your report for two years but stops affecting your score after about six months.
Once approved, you choose your deposit amount and fund the account. You can transfer money from a bank account or send a check. Merrick typically funds new accounts within 1 to 3 business days. Your card arrives in the mail 7 to 10 business days after funding.
You do not need to have a checking account with Merrick to open the card. Your deposit goes into a savings account managed by Merrick, separate from any other banking relationship you may have with them.
Building Credit and the Path to Unsecured Status
The main reason to use a Merrick card is that it reports to all three credit bureaus. Every payment you make — on time or late — appears on your credit report. This creates a record of responsible borrowing that credit scoring models use to calculate your score.
On-time payments are the single largest factor in credit scores, accounting for about 35% of your FICO score. Making your Merrick payment on time every month, even if it is just the minimum, builds this history faster than any other action.
After 18 months of on-time payments, Merrick may convert your account to an unsecured card. This means your deposit is returned to you and the card no longer requires collateral. Conversion is not automatic — Merrick reviews your account and decides whether to offer it. If you have missed payments or carried high balances, conversion may not happen.
Even if conversion does not occur at 18 months, you can request it. Some cardholders report that Merrick converts accounts after 24 months of perfect payment history, though this varies by individual.
What Happens If You Miss a Payment
A missed payment is reported to the credit bureaus and damages your credit score when ready. Even one late payment can lower your score by 100 points or more, depending on your current score and credit history.
If you miss a payment by 30 days, Merrick reports it as a late payment. If you miss by 60 days, it is reported as seriously delinquent. At 120 days past due, Merrick may close your account and send it to collections.
If your account goes to collections, the debt collector can sue you for the balance. A judgment against you can result in wage garnishment or a bank levy. The collection account stays on your credit report for seven years from the original missed payment date.
If you are struggling to make a payment, contact Merrick before the due date. Some cardholders report that Merrick will work with you on a payment plan or temporary hardship arrangement, though this is not may provide and depends on your situation.
Alternatives to the Merrick Card
Other secured cards exist and may have lower fees or better terms. The Capital One Secured Mastercard charges a $39 annual fee and reports to all three bureaus, similar to Merrick. The Discover it Secured card charges no annual fee and offers 1% cash back on purchases, though it requires a $200 minimum deposit.
If you have a bank account, some banks offer their own secured cards to existing customers. These cards sometimes have lower fees or higher deposit limits. Ask your bank whether they offer a secured card product.
A credit-builder loan is another option. You borrow a small amount of money (usually $300 to $1,000) and make monthly payments. The lender reports your payments to the credit bureaus, building your credit history without the ongoing fees of a credit card. Credit unions often offer these loans at lower rates than banks.
If you have a family member or friend willing to add you as an authorized user on their credit card, that can also build your credit. Their payment history appears on your credit report, though you do not need to use the card or make payments yourself.
Frequently Asked Questions
Can I use the Merrick card right away after opening the account?
No. You must fund your deposit first, which takes 1 to 3 business days. Then your physical card arrives in the mail, which takes 7 to 10 business days. You can use the card online or by phone once it arrives. Some cardholders report receiving a temporary card number via email that can be used when ready, but this is not may provide.
What happens to my deposit if I close the account?
Your deposit is returned to you, usually within 5 to 7 business days of closing. However, closing the account may lower your credit score because it reduces your total available credit and shortens your credit history. Keep the account open even after conversion to an unsecured card if you want to maximize the benefit to your score.
Can I use the Merrick card for cash advances?
Yes, but cash advances charge a higher APR than purchases — typically 24.9% to 27.9% — plus a fee of 3% to 5% of the amount withdrawn. A $100 cash advance costs $3 to $5 in fees plus interest. Avoid cash advances unless absolutely necessary.
Does Merrick report to all three credit bureaus?
Yes. Merrick reports your account activity and payment history to Equifax, Experian, and TransUnion. This is one of the main advantages of the card over prepaid alternatives, which do not report to any bureau.
How long does it take to rebuild credit with the Merrick card?
Credit scores improve gradually over time. Most people see a 50 to 100 point increase within three to six months of on-time payments, depending on their starting score and credit history. Larger improvements take 12 to 24 months. The exact timeline depends on your individual credit profile and what negative items are on your report.