The Secured Visa® from Merrick Bank
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The Secured Visa from Merrick Bank is a basic secured credit card, without any rewards or particularly rapacious fees. Because this card is targeting people with poor or no credit history, your credit limit is determined by your security deposit. This is just one way for the bank to protect its assets.
Almost anyone can be approved for this card barring certain circumstances, such as a pending bankruptcy filing or outstanding tax obligations. This might be a good option for people who don’t have a bank account and are serious about fixing or establishing credit, as this card offers a relatively high credit limit of $3,000. However, your limit must be backed by a security deposit of equal value, which can be paid online or with a money order.
This is a product specifically designed to help people build or repair credit. Your account information, including payment history, outstanding balance, and any late payments, are reported to the three major credit reporting bureaus: Experian, TransUnion and Equifax. This is not a unique benefit, as most card companies report this information as an incentive to pay on time, but it is an important one for people who need to get their credit on the right track.
To get this card you would have to match the credit limit you wish to have in a cash security deposit, which can be between $200 and $3,000. The good thing about this card is that you can opt for a higher credit limit, which will reflect on your credit reports as having more credit extended to you. Many secured cards have lower limits, usually maxing out at about $500.
We also like that after the first year, the issuer will regularly review your account for credit line increases. These increases would be unsecured, meaning no additional security deposit would be required.
If you keep your balance low or nil each month, this will help boost your credit score over time. Many lenders look at your credit-to-debt ratio as a metric in determining how creditworthy you are. The lower your debt and the more credit you have, the better your score will be. So if you were to put the $3,000 max security deposit on this card and pay off your balance each month, your reports would show that you have $3,000 in available credit.
Another plus is that you don’t have to have a bank account to get this card. The security deposit can be funded with a money order through USPS, Western Union or MoneyGram.
The main drawback of this card is the $36 annual fee. It’s not as much as some other secured cards, but there are cards out there that don’t have annual fees. The Capital One Secured Mastercard, for instance, does not have an annual fee. But the initial maximum credit line is low, just $200, so there’s a trade-off.
The Discover it® Secured card might be the best option for people who have a bank account. Not only are there no annual fees, but you can earn 2% cash back on gas stations and restaurants. Keep in mind, the only way that cash-back bonuses makes sense – and money – is if you pay your balance in full each month; otherwise the interest rate will eat through any bonuses you earn.
Who should get this card
This card is a good choice for people who don’t have a bank account and are serious about establishing good credit. The high credit limit — up to $3,000, which must be backed by a security deposit of equal value — is a great tool in repairing credit. By taking advantage of that option, cardholders can show that they have a good amount of credit extended to them.
Once you begin qualifying for better cards, you can close this account and get your security deposit back.
Fees and APR
- The APR is a variable 19.20%.
- For cash advances, the APR is 24.20%.
- The annual fee is $36.
- Returned and late payment fees are $38.
- There is a 2% foreign transaction fee.
Extras and perks
You can manage your account online.
How this card compares
The Discover it® Secured card packs a powerful punch of attributes not typically seen in secured cards. For starters, you earn cash back with the card — something no other secured card on the market offers. Earn 2% back on and gas stations and restaurant spending, up to a combined quarterly maximum of $1,000, and 1% back on all other spending. And it will double your cash back at the end of the first year. The bank will also review your account, starting at eight months to see if you qualify to graduate to an unsecured card.
The Capital One QuicksilverOne Cash Rewards Credit Card is a decent choice for a consumer trying to rebuild (or build for the first time) their credit and earn rewards at the same time. A word of caution here, though. This card is not right for you if you plan to carry a balance. The interest you accrue will cancel out any rewards you earn. That, and the APR is fairly unforgiving.
The Credit One Bank Platinum Card offers some rewards, and offers decent APRs for a secured card. A major drawback of the Credit One Bank Platinum Card is that you won’t know the exact terms of your offer until you’ve applied.
The Capital One Secured MasterCard has flexible opening options that other secured cards do
not. If you qualify, you can put down as little as $49 to get a credit limit of $200. Or, you can pay the $200 security deposit in installments. This card can give you access to a higher credit line after you make five on-time monthly payments.