When I noticed that Merrick Bank’s Secured Visa Card had a pretty good interest rate, I decided to take a closer look at this credit card. I know many of you are working hard to rebuild credit, so I try to review as many secured cards as I can.
The good news is that Merrick Bank reports your payment history to all three major credit bureaus. So if you make your payments on time, you can rebuild your credit history. Of course, the flip side is also true. If you don’t pay your bills on time, your credit score will drop even lower. And just to be clear, to improve your score, you need to pay all of your bills on time, not just your credit card bill.
Okay, there aren’t any rewards, so let’s jump right into the numbers.
Rates and fees
Please be sure you read the Credit Card Agreement and the Summary of Terms carefully. You do get a 25-day grace period, which is very good. Pay your entire bill during the grace period every month and you won’t have to pay any interest on your purchases.
Annual fee: It’s $36 and it’s deducted from your credit limit. So if you pay $200 for the deposit, your starting credit limit will only be $164. After the first year, you’re billed $3 per month.
Additional card fee: It’s $12 per year. After the first year, you’re billed $1 per month.
APR: You get a variable rate of 17.45 percent. This is a pretty good rate for this category.
Balance transfers: Not applicable.
APR for cash advances: You get a variable 22.45 percent rate. The transaction fee is 4 percent. There’s no grace period on a cash advance so interest expense starts accruing right away.
Foreign transaction fees: It’s 2 percent, which is a little better than average.
Credit limit: You choose your credit limit and it ranges from $200 to $3,000. Note that your security deposit does not earn interest. Your card can’t be used until the security deposit has been paid in full. The online application offers several payment methods and you can choose one depending on how fast you need the card.
Over-the-limit fee: Up to $35.
Other fees: Late payments and returned payments. Read the terms and conditions carefully so you’re aware of all the fees.
The bottom line
This card gets a thumbs-up rating from me, but it’s kind of a middle-tier card. On my The Best (and Worst) Secured Credit Cards list, this card slides into the #8 slot.
On the whole, this secured card seems like a good choice for rebuilding credit. My only concern is that I haven’t seen any consumer comments that indicate you can get “promoted” from Merrick’s secured card to their unsecured card. It appears you can’t apply for an unsecured credit card offer online, and instead, you have to wait for it to arrive in the mail. You’ll get an “Acceptance Certificate Number” and when you have that, you can then apply online.
Other than that, consumers have also reported getting their accounts closed for going over their credit limits and being charged a (previously undisclosed) $10 fee to make a payment via the phone. This tells me that there are more details in the mailed disclosure statements than what’s provided online. Read everything that comes with the card very carefully.
Have any of you used this secured card? If so, have any of you been offered an unsecured credit card? I’d love to hear about your experiences with Merrick Bank.
Note: Credit card agreements change frequently. So my review is based on the information that was in effect today. Be sure you read all the disclosure statements carefully.