Review: Merrick Bank Credit Cards

merrick-bank-credit-cardMerrick Bank offers credit cards for people with bad credit histories or those trying to build credit for the first time, including an unsecured credit card and a secured credit card. (See our Unsecured Credit Cards and Secured Credit Cards sections for more information on the difference between these types of cards.) Our overview/review of these cards is below:

Merrick Bank Unsecured Credit Cards

Many people learn of Merrick Bank for the first time from mail solicitations, in which unsecured credit cards are offered to those who’ve had credit problems in the past. This may be attractive because bad credit often prohibits you from getting an unsecured card; most card companies won’t take the chance on you.

However, looking at the Merrick Bank unsecured credit card terms & conditions, it is obvious that most people who are offered the card would be better off without it. Merrick Bank shows that your interest rate could be 16.70% at the lowest, which is already a fairly high interest rate. BUT it could be as high as 28.70%! Your card might have no annual fee, but it could have an annual fee of $96! Your card might not have any account set-up fee, but it could have a set-up fee of $75!

If you’ve received a mail offer from Merrick Bank (Merrick only offers unsecured credit cards by invitation, you can not apply for one online), you can check to see the exact rates and fees you would be charged — we’re guessing it will be on the higher end.

In most cases, we strongly recommend against accepting offers from Merrick Bank. Even if you have bad credit, there are better options. (Again, see our Unsecured Credit Cards and Secured Credit Cards sections for some of them.) In fact, one of those better options is from Merrick Bank itself:

Merrick Bank Secured Visa

In our book, if you are having trouble getting credit due to a poor credit history, you are better off getting a secured credit card and building up a good credit history than getting an unsecured credit card with crazy high fees and interest rates. Yes, you have to put down a security deposit in order to get one, but you’ll be able to get that money back in the future, and the rates and fees you pay are often lower than those of the unsecured cards willing to accept you.

The Merrick Bank Secured Visa is a good example. You put a security deposit down, anywhere from $200 to $3000, and you get a credit line equal to the amount of your deposit. You then use the card like any other credit card, including making payments every month (payments do NOT come from your security deposit). Merrick Bank reports your record of on-time payments to the 3 credit bureaus, helping you improve your credit and hopefully allowing you to qualify for a good, unsecured credit card in the future. (This assumes you actually do pay on time every month.)

The reason we would rather you have a Merrick Bank secured card over a high-cost Merrick Bank unsecured card is that the interest rate and fees are lower in most cases. The secured credit card interest rate is 17.70% and the card’s annual fee is $36. Neither of those numbers is great, but they are a heck of a lot better than paying 25+% interest and having maybe $150 in fees like with the Merrick Bank unsecured card. If you have bad credit, we think this is the better way to go. You’ll find an online application for the Merrick Bank secured Visa here.

(Note that this is not a recommendation for the Merrick Bank secured credit card — we are only stating our preference for this card over Merrick Bank’s unsecured cards. You can find secured credit cards with lower fees and interest in our Secured Credit Cards section.)