Merrick Bank credit cards work best if you have poor or limited credit history and need to rebuild, but they come with high fees and interest rates that make them expensive compared to other options
Merrick Bank offers secured credit cards — you put down a cash deposit, and that deposit becomes your credit limit. The card reports to all three credit bureaus (Equifax, Experian, and TransUnion), which means on-time payments build your credit history. But the annual fee runs $25 to $39 depending on the card, the interest rate is typically 19.99% to 24.99%, and you won't earn cash back or rewards. You're paying for the ability to build credit, not for perks.
Whether Merrick is right for you depends on what you're trying to do and what other cards will accept you. If you've been turned down for unsecured cards, a secured card from any issuer (including Merrick) can work. If you have other options, there are cheaper ways to rebuild.
Key Takeaways
- Merrick Bank secured cards require a cash deposit that becomes your credit limit, and that deposit stays in a separate account while you use the card.
- Annual fees of $25 to $39 and interest rates of 19.99% to 24.99% make these cards expensive, so you should only carry a balance if you have no other borrowing option.
- The card reports to all three credit bureaus, so on-time payments do build your credit score, but other secured cards from banks like Capital One or Discover offer the same reporting at lower cost.
- Most cardholders graduate to an unsecured card within 12 to 18 months of responsible use, at which point you get your deposit back.
- Merrick cards have no rewards, no cash back, and no sign-up bonus, so the only benefit is access to credit reporting if you can't get approved elsewhere.
How Merrick Bank secured cards actually work
You deposit money into a savings account held by Merrick Bank. That deposit amount becomes your credit limit — if you deposit $500, your limit is $500. You then use the card like any other credit card: make purchases, receive a statement, and pay a bill each month. The deposit itself stays locked in the savings account and earns little to no interest. You cannot touch it while the account is open.
When you close the account or graduate to an unsecured card, Merrick returns your deposit. Graduation usually happens after 12 to 18 months of on-time payments, though the timeline varies. Some cardholders are converted automatically; others receive an offer to explore for an unsecured card and must request the deposit back once approved.
The card reports your payment history, credit utilization (how much of your limit you use), and account age to Equifax, Experian, and TransUnion each month. This reporting is what builds your credit score. Missing a payment or carrying a high balance relative to your limit will hurt your score, just as it would with any card.
Fees and interest rates compared to other secured cards
Merrick's annual fee of $25 to $39 is higher than what you'll find elsewhere. Capital One's Secured Mastercard charges $0 annual fee. Discover it Secured charges $0 annual fee. Even if you use the card responsibly and pay in full each month, you're still paying Merrick's annual fee with no way around it.
The interest rate — 19.99% to 24.99% — is standard for secured cards aimed at people rebuilding credit, but it's still a cost you want to avoid. If you carry a $500 balance at 24.99% for a year, you'll pay roughly $125 in interest alone, plus the annual fee. That's $150 to $165 in costs on a $500 limit. If you can pay your statement in full each month, the interest rate doesn't matter, but if you can't, the card becomes expensive fast.
Capital One and Discover secured cards have the same reporting to all three bureaus and the same graduation path, but without the annual fee. Unless Merrick is the only card that will accept you, starting with Capital One or Discover will cost you less.
When Merrick makes sense and when it doesn't
Merrick makes sense if you have been turned down for every other secured card you've tried. The bank does report to all three bureaus and does graduate cardholders, so it works for rebuilding. If Capital One and Discover have both declined you, Merrick may still approve you — the bank's approval standards are somewhat looser. In that case, the higher fee is the price of access.
Merrick does not make sense if you can get approved for Capital One Secured, Discover it Secured, or an unsecured card from a mainstream bank. You'll pay less and get the same credit-building benefit. It also doesn't make sense if you're planning to carry a balance month to month. The combination of annual fee and high interest rate makes the card very expensive for revolving debt.
If you're rebuilding after a bankruptcy, collections account, or long period of no credit activity, a secured card from any issuer (including Merrick) is a legitimate tool. But you should try the cheaper options first.
What happens after you've used the card for a year or more
After 12 to 18 months of on-time payments, Merrick may automatically convert your account to an unsecured card, or you may receive an offer to explore for one. When that happens, your deposit is returned to you — usually within 5 to 7 business days. You keep the card account open (now unsecured), and your credit history with that account continues to age, which helps your score.
Some cardholders report being converted without asking; others have had to request conversion or explore for a different unsecured card to get their deposit back. There's no published timeline, so you should contact Merrick after 18 months of perfect payments and ask about your options. Having a record of on-time payments makes the conversation easier.
Once you graduate, you can close the Merrick card if you want — you're no longer paying the annual fee, and you've already built the credit history. Or you can keep it open and use it occasionally, which keeps the account active and helps your credit mix (having different types of credit accounts open).
Red flags and common complaints
The most common complaint about Merrick is that the company is slow to graduate cardholders to unsecured status. Some people report waiting 24 months or longer despite perfect payment history. If you're counting on getting your deposit back by a certain date, contact the bank in writing (not by phone) and ask for a timeline. Having documentation helps if there's a dispute later.
Another issue: Merrick's customer service is available only by phone during business hours, and wait times can be long. If you prefer online chat or email support, you'll be frustrated. The card also has no mobile app, which some users find inconvenient for checking balances or making payments.
Finally, some cardholders report that Merrick denies graduation requests or takes months to process them. This is rare, but it happens. If you're approved for a Merrick card, read the cardholder agreement carefully and keep records of every on-time payment. If you hit the 18-month mark with perfect history and Merrick won't graduate you, you have documentation to dispute the decision.
Alternatives to Merrick if you're rebuilding credit
Capital One Secured Mastercard has no annual fee, reports to all three bureaus, and graduates cardholders on a similar timeline. It's the better choice if you can get approved.
Discover it Secured also has no annual fee and reports to all three bureaus. Discover is known for faster graduation — some cardholders report being converted within 6 to 8 months of on-time payments.
If you have a bank account with a credit union, ask whether they offer a secured card. Credit unions often have lower fees and more flexible approval standards than national banks. You may also have access to a credit-builder loan, which is a different tool but serves the same purpose: building credit history while you save money.
If you have a thin credit file (few accounts, old accounts, or no recent activity) but no major damage, you might be approved for an unsecured card with a low limit from a mainstream bank. Checking your approval odds without a hard inquiry (which temporarily lowers your score) is possible through sites like Capital One's pre-qualification tool or Discover's pre-approval page. Start there before explore for a secured card.
Frequently Asked Questions
Can I use my Merrick card right away after I'm approved?
Yes. Once your deposit clears (usually 1 to 3 business days), your card is activated and you can use it when ready. You don't have to wait for a statement or make a payment before you start building credit history.
What if I can't afford the deposit right now?
You'll have to wait until you can save the deposit amount. Merrick requires the full deposit upfront; there's no payment plan. If you need to rebuild credit when ready, look into a credit-builder loan from a credit union instead, which lets you borrow a small amount and repay it over time.
Does Merrick report late payments to the credit bureaus?
Yes. Late payments are reported just like they would be on any credit card. A single late payment can lower your score by 50 to 100 points, so set up automatic payments or calendar reminders to avoid missing a due date.
Can I increase my credit limit without adding more money?
Not with a secured card. Your limit is tied to your deposit. If you want a higher limit, you have to deposit more money. Once you graduate to an unsecured card, you may be able to request a limit increase without additional deposits.
What happens if I close my Merrick account before graduation?
You get your deposit back, but closing the account stops the credit-building benefit. Your payment history stays on your credit report, but the account will eventually age off. If you're thinking about closing the card, wait until you graduate to an unsecured card instead.