The Secured Visa® from Merrick Bank

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.

Review

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% back on gas stations and restaurant spending, up to a combined quarterly maximum of $1,000, and 1% back on all other spending. 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.

If you chose to close your account in the future once you begin qualifying for better cards, your security deposit is refundable.

Fees and APR

• The APR is a variable 18.95%.
• For cash advances, the APR is a variable 23.95%.
• The annual fee is $36.
• Returned and late payment fees are up to $39.
• There is a 2% foreign transaction fee.

Extras and perks

You can manage your account online.