What Merrick Bank credit cards are and who they're for
Merrick Bank issues credit cards designed for people rebuilding credit or working with a limited credit history. The bank requires a cash deposit upfront — typically between $200 and $2,500 — which becomes your credit limit. You use the card like any other credit card, and Merrick reports your payment history to the three major credit bureaus (Equifax, Experian, and TransUnion). The goal is to demonstrate responsible use over time so you can move to an unsecured card or higher limits.
Merrick Bank is a subsidiary of Customers Bank and has been issuing secured credit cards since 1996. The company does not require a credit check or a minimum credit score to open an account, which is why these cards appear in the bad credit category. However, the card does come with an annual fee and interest rate that reflect the risk the bank takes on borrowers with thin or damaged credit files.
Key Takeaways
- Merrick Bank secured cards require a cash deposit that matches your credit limit, ranging from $200 to $2,500.
- The annual fee is $39 to $99 depending on the card product, and the interest rate (APR) typically falls between 18% and 24%.
- Your payment history is reported to all three credit bureaus, so on-time payments directly affect your credit score.
- After 12 to 18 months of responsible use, you may be able to convert to an unsecured card or request a credit limit increase without adding more deposit.
- The deposit is held in a savings account and returned when you close the card or graduate to an unsecured product.
How the deposit and credit limit work
When you open a Merrick Bank secured card, you choose how much to deposit, and that amount becomes your credit limit. If you deposit $500, your limit is $500. The deposit sits in a savings account held by the bank and earns a small amount of interest — currently around 0.01% APY, though this varies. You cannot withdraw the deposit while the card is active; it serves as collateral against the risk of non-payment.
Merrick allows deposits between $200 and $2,500. The minimum deposit of $200 is low compared to some competitors, but the credit limit you receive is exactly what you deposit — no multiplier or bonus. If you want a $1,000 limit, you must deposit $1,000. Some cardholders open the account with a smaller deposit and add more later to increase their limit, though this requires a separate deposit and approval.
Fees and interest rates you will pay
Merrick Bank charges an annual fee of $39 to $99 per year, depending on which card product you choose. The bank offers two main secured card options: the Merrick Bank Secured Visa Card (standard option) and the Merrick Bank Secured Visa Card for New Credit (designed for people with very limited credit history). Both cards carry the annual fee, though the exact amount may differ.
The interest rate (APR) on purchases typically ranges from 18% to 24%, which is higher than rates on unsecured cards but standard for secured products aimed at borrowers with poor or no credit. If you carry a balance, interest accrues daily on the unpaid amount. The bank also charges a late fee (usually $25 to $35) if you miss a payment, and a cash advance fee of 3% to 5% if you use the card to withdraw cash.
Because the annual fee and high APR reduce the value of the card, the strategy is to use it for small, regular purchases and pay the full balance each month. This way you build credit history without paying significant interest charges.
How payment history affects your credit score
Merrick Bank reports your account activity to Equifax, Experian, and TransUnion every month. This means every on-time payment you make strengthens your credit profile, and every late payment damages it. The payment history is the single largest factor in credit score calculations (about 35% of your score), so consistent on-time payments on a Merrick card can move your score upward over time.
The card also helps by adding to your credit mix — the variety of credit types you manage (credit cards, installment loans, etc.). If you have no credit history, a secured card is one of the fastest ways to begin building a file that lenders will recognize. However, the high APR and annual fee mean this card is a tool for building credit, not for carrying balances or making large purchases.
When you can graduate to an unsecured card
After 12 to 18 months of on-time payments, Merrick Bank may contact you about converting your secured card to an unsecured card. This means your deposit is returned and you keep the card with a credit limit set by the bank (not tied to your deposit). The conversion is not automatic — the bank reviews your account and decides whether to offer it based on your payment history and current credit profile.
You can also request a credit limit increase without converting the card. If approved, you can add more money to your deposit to raise your limit, or in some cases Merrick may increase your limit without requiring additional deposit. The timing and terms vary by account, so contact the bank directly to ask about your options after 12 months of use.
If you do not receive an offer to convert, continue making on-time payments and check back every few months. Some cardholders convert after 18 to 24 months instead of 12 months. Once you have an unsecured card from Merrick or another issuer, you can close the secured card and retrieve your deposit.
How Merrick Bank compares to other secured card issuers
Merrick Bank is one of several banks offering secured cards. Capital One Secured Mastercard, for example, also requires a deposit and reports to all three bureaus, but has a lower annual fee ($39 vs. Merrick's $39 to $99) and similar APR ranges. Discover Secured Card requires a deposit and has no annual fee, though it is harder to get approved if your credit is very poor.
The choice between Merrick and competitors depends on your deposit amount, how quickly you want to convert to unsecured, and whether the annual fee matters to your budget. Merrick's main advantage is that it accepts applicants with virtually no credit history and no credit check. Its main disadvantage is the annual fee and the fact that your credit limit is capped at your deposit amount — you cannot get a higher limit without depositing more money.
If you are comparing options, request the terms from each issuer and calculate the total cost: deposit amount plus annual fee plus estimated interest if you carry a balance. The cheapest card is the one you use responsibly and pay off each month.
Frequently Asked Questions
What happens to my deposit if I close the card?
Your deposit is returned to you, usually within 5 to 7 business days of closing the account. The bank sends it to the bank account or address you have on file. Make sure your contact information is current before you close the card so you do not miss the refund.
Can I use a Merrick card to pay bills or make online purchases?
Yes. Merrick cards are Visa cards and work anywhere Visa is accepted, including online retailers, utilities, and subscription services. Using the card for regular bills (if you pay the balance in full each month) is a good way to build credit history without paying interest.
What if I miss a payment on my Merrick card?
A missed payment is reported to the credit bureaus and damages your credit score. You will also be charged a late fee (typically $25 to $35) and your APR may increase. If you miss a payment, contact Merrick Bank when ready to bring your account current and ask about hardship options.
Do I need good credit to open a Merrick Bank card?
No. Merrick does not require a credit check or minimum credit score. You only need to be at least 18 years old, have a valid Social Security number, and have the cash deposit available. This makes Merrick an option for people with no credit history or poor credit.
How long does it take to receive my Merrick card after I open the account?
Merrick typically mails the card within 7 to 10 business days after your account is approved. You can use the card online when ready in some cases, but physical card arrival varies. Check your account online or contact customer service for tracking information.