What the Merrick Bank Credit Card is and who it's for
The Merrick Bank Credit Card is a secured credit card — you put down a cash deposit, and that deposit becomes your credit limit. Merrick is one of the few card issuers still offering secured cards to people with no credit history, recent late payments, or past collections. The card reports to all three credit bureaus (Equifax, Experian, and TransUnion), which means your payment history builds a credit score you can use later to move to an unsecured card.
This is not a prepaid card. You are not spending your own deposit. Instead, the deposit sits in a savings account at Merrick Bank, and you charge purchases to the card itself — just like any other credit card. You pay a monthly bill. If you don't pay, the bank can take the money from your deposit, but they report the missed payment to the credit bureaus first, which damages your score.
Merrick cards make sense if you have been turned down for regular credit cards, or if you need to rebuild a score after missed payments or collections. They don't make sense if you already have access to an unsecured card or a credit-builder loan, because those routes cost less and build credit just as fast.
Key Takeaways
- You deposit $200 to $2,500 with Merrick Bank, and that amount becomes your credit limit — the bank holds the deposit as security.
- The card charges an annual fee (currently $39 to $99 depending on the deposit amount) plus interest on purchases you don't pay off monthly.
- On-time payments report to all three credit bureaus and can raise your score within 6 to 12 months if you have no other negative marks.
- After 12 to 18 months of on-time payments, you can request to convert to an unsecured card and get your deposit back.
- A credit-builder loan from a credit union may cost less and build credit equally fast, so compare before you decide.
Costs: annual fee, interest rate, and what you actually pay
Merrick charges an annual fee based on your deposit amount. A $200 deposit carries a $39 annual fee; a $500 deposit costs $59 per year; a $2,500 deposit costs $99 per year. The fee is charged to your card in the first month, so if your limit is $200, you start with $161 of available credit after the fee is deducted.
The interest rate on purchases varies by applicant but typically ranges from 18% to 24% APR. This is higher than most unsecured cards, but standard for secured cards. If you carry a $300 balance at 21% APR, you pay roughly $5.25 in interest per month. The way to avoid this cost is to pay your full statement balance every month — which also builds your credit score faster than making minimum payments.
There is no penalty APR for late payments, but a late payment will be reported to the credit bureaus and can drop your score by 50 to 100 points. There is also no grace period — interest starts accruing when ready on new purchases if you carry a balance from the previous month.
How your payment history affects your credit score
Payment history is the single largest factor in your credit score — it accounts for 35% of your FICO score. When you make an on-time payment to Merrick, the bank reports it to Equifax, Experian, and TransUnion. After 6 months of on-time payments, you should see your score begin to move upward, assuming you have no other negative marks like collections or recent late payments on other accounts.
The speed of improvement depends on where you started. If you have no credit history at all, a score can climb 50 to 100 points in the first year. If you have recent late payments or collections, the improvement is slower — those negative marks stay on your report for 7 years, and they fade gradually rather than disappearing. A Merrick card can still help by adding positive payment history alongside the negative marks, but the negative items will continue to weigh on your score.
One missed payment can erase months of progress. A single 30-day late payment can drop your score by 50 to 100 points. A 60-day or 90-day late payment is worse. If you miss a payment, the bank will eventually take the money from your deposit, but the damage to your score happens first.
When to graduate from a secured card to an unsecured card
Most issuers, including Merrick, allow you to convert to an unsecured card after 12 to 18 months of on-time payments. When you convert, your deposit is returned to you and your credit limit is set by the bank based on your payment history and credit score. Some people see their limit increase; others see it stay the same or decrease slightly.
You don't have to wait for Merrick to offer the conversion. After 12 months of on-time payments, you can explore for an unsecured card from another issuer — a regular rewards card, a card with no annual fee, or a card with a lower interest rate. Once you are approved for an unsecured card, you can close the Merrick card and get your deposit back. There is no penalty for closing early.
The decision to convert or switch depends on your score and what other cards you have access to. If your score has climbed above 650 and you have been offered an unsecured card with no annual fee and a lower interest rate, switching makes sense. If your score is still below 620 and you have no other credit accounts, staying with Merrick for another 6 months may be the safer choice.
Merrick versus other secured card options
Merrick is not the only secured card on the market. Capital One Secured MasterCard, Discover Secured Card, and U.S. Bank Secured Visa all offer similar products. The main differences are annual fee, interest rate, and how quickly they convert to unsecured cards. Capital One's card has no annual fee but a higher interest rate; Discover's card has no annual fee and reports to all three bureaus; U.S. Bank's card requires a minimum deposit of $500.
A credit-builder loan from a credit union is often a cheaper alternative. You borrow $500 to $1,000, the money sits in a savings account, and you make monthly payments to yourself. The loan costs $25 to $50 in interest over the life of the loan, compared to $39 to $99 per year for a Merrick card. Credit-builder loans report to the credit bureaus just like credit cards do, and they build your score at roughly the same speed. The downside is that you don't get a card to use for everyday purchases — you are only building credit, not learning to manage a credit line.
If you have access to a credit union, ask whether they offer credit-builder loans before you explore for a Merrick card. If you don't have a credit union nearby or you need a card for purchases, Merrick is a reasonable choice — but compare the annual fee and interest rate to Capital One and Discover first.
How to use a Merrick card without damaging your score
The goal of a secured card is to build credit, not to carry a balance. Here is the strategy that works: charge a small purchase every month — $20 to $50 — and pay the full balance before the due date. This shows the credit bureaus that you can borrow money and pay it back on time. It also keeps you from paying interest.
Do not charge more than 30% of your credit limit in any given month. If your limit is $500, keep your balance below $150. Credit utilization — the percentage of your available credit that you are using — accounts for 30% of your FICO score. High utilization signals risk to lenders, even if you pay on time. Once your balance is paid off, your utilization drops back to 0%, and your score benefits.
Set up automatic payments if possible. Many people miss Merrick payments because they forget, not because they can't afford them. An automatic payment for the full statement balance, due a few days before the due date, removes the risk of a missed payment. You can change or cancel the automatic payment anytime, so there is no downside to setting it up.
What happens if you miss a payment or can't afford the deposit
If you miss a payment by 30 days, Merrick reports it to the credit bureaus and your score drops. If you miss by 60 or 90 days, the bank may close your account and take the money from your deposit to cover the balance. You will still owe any remaining balance, and the late payment stays on your credit report for 7 years.
If you can't afford a $200 deposit right now, a Merrick card is not the right tool. A credit-builder loan with a smaller monthly payment, or a secured card from a different issuer with a lower minimum deposit, may work better. Some credit unions offer credit-builder loans with deposits as low as $50 to $100. If you have a friend or family member who can co-sign, you might also may have access to for an unsecured card without a deposit, though co-signing carries risk for the other person.
If you have already opened a Merrick card and your circumstances have changed, contact the bank to discuss your options. They cannot waive the annual fee, but they may be able to lower your credit limit (and thus your deposit requirement) if you ask.
Frequently Asked Questions
Can I use a Merrick card right away, or do I have to wait for approval?
Merrick typically approves secured card applications within 1 to 3 business days. Once approved, the card ships within 7 to 10 business days. You can use the card as soon as it arrives. The deposit is separate — you fund it online or by mail, and it must be received before you can set up the card.
What if I want to close my Merrick card before 12 months?
You can close the card anytime. Your deposit will be returned to you, usually within 5 to 7 business days. Closing early does not hurt your credit score, but it does remove a positive payment history from your report, which may lower your score slightly. If you are planning to explore for a loan or mortgage soon, it is better to keep the card open and active.
Does Merrick report to all three credit bureaus?
Yes. Merrick reports to Equifax, Experian, and TransUnion. This means your payment history builds credit across all three bureaus, and your score will improve across all three reports. Some secured cards report to only one or two bureaus, so Merrick's reporting to all three is an advantage.
Can I increase my credit limit after I open the card?
Yes, but only by increasing your deposit. If you deposit an additional $300, your credit limit increases by $300. You can request a deposit increase online or by phone. There is no additional annual fee for the increased limit — you pay one annual fee based on your total deposit amount.
What is the difference between a secured card and a prepaid card?
A secured card is a credit card backed by a deposit. You borrow money, pay it back, and build a credit score. A prepaid card is not a credit card — you load money onto it and spend your own money. Prepaid cards do not build credit because there is no borrowing or credit reporting. If you see a card advertised as "prepaid" or "reloadable," it will not help your credit score.