Recently, someone asked me about a credit card offer they received from Merrick Bank. I wasn’t familiar with Merrick Bank, so I agreed to look into it. The Merrick Bank credit card is pretty interesting for the right type of person.
Merrick Bank Credit Card Review
The first thing is what is Merrick Bank and where is it located. If you’ve never heard of Merrick Bank, don’t worry, you probably aren’t alone. Most people don’t realize that “bank” can mean a lot of different things. In this case, bank means an issuers of loans and credit cards, not a bank that takes regular deposits and has branches. It is FDIC insured, and is one of the top issuers of Visa cards.
It seems that Merrick Bank offers two main products according to the people I talked to. One is a Merrick Bank Secured credit card, and the other is a more traditional unsecured Merrick Card Classic Visa or MasterCard.
Don’t forget to check out my review of the Acorns app.
Secured Visa by Merrick Bank
The Merrick Bank Secured Visa can be applied for by anyone by filling out an application that is available online. Current terms include a 17.70 percent interest rate, calculated at PRIME + 14.20 percentage points, and a $36 annual fee that turns into a $3 per month annual fee after the first year. In other words, when you apply for the card, you’ll pay a $36 fee all at once, then no fee for the next 12 months. Then, in month 13, you’ll start paying $3 per month as the “annual fee.”
You can apply for a credit line between $200 and $3,000. As is typical for a secured credit card, the amount of your deposit determines your credit line. So, if you deposit $500 with them, you’ll get a $500 credit line.
The company says it does report your activity to the three major credit bureaus, so it can be used to help repair your credit, or rebuild your credit after a bankruptcy.
Obviously, if you have decent credit, this is not the card for you, but if you have poor credit, no credit, or don’t have the right kind of income to qualify for another card, this one can be a way to rebuild your credit.
As always, I am opposed in almost all cases to credit cards with an annual fee, so this should be considered a credit card of last resort.
Merrick Bank Visa Classic or MasterCard
To apply for a regular, unsecured credit card from Merrick Bank, you have to have received an offer from the company. Most people seem to receive an offer by mail. There is an offer number on that mailing, and you must enter it in order to apply for the card. This is typically a “sub-prime” card, meaning that it is offered to people with higher credit risk, such as people who have a bankruptcy on their credit report, or those with low credit scores.
The interest rates and annual fees on the normal Merrick Bank credit cards range from 17.45% to 29.70%, again based on PRIME plus a certain markup. Annual fees range from zero to $72 per year. Some cards have a setup fee of up to $75, and I would strongly advise against that. Be sure to carefully review your terms. A $72 annual fee is crazy. Don’t do it. Also, note that they will charge your setup fee and annual fee to your card right away. In other words, that $500 credit limit will start with a balance of $147 on it already.
If you can’t pay that $147 off immediately, do not sign up for the card. It isn’t worth paying 17% interest.
The interesting thing about many Merrick Bank credit card offers received in the mail is that they offer an automatic increase in the credit line after a certain period of time. So, for example, the card starts as an $800 credit limit card, then after making seven payments on time, the limit automatically increases to $1,300. Again, this is a great way to help rebuild credit after a bankruptcy, or other financial difficulties.
Remember that your total available credit is part of your credit score, as is your total credit utilization percentage. In other words, if you really can use and pay off this card every month, it can help raise your credit score. However, if you end up carrying a balance on this card, it probably isn’t going to help your credit score very much.
Free Credit Score from Merrick Bank
Many of the Merrick Bank credit cards come with a free credit score offer. Unlike many credit card company free credit scores, this is a real FICO score, and according to the company, the actual, real credit score the company uses when evaluating your account. In other words, this is a similar FICO score to what other credit card companies might use.
The free credit score is available by logging into your account online. The score is updated monthly. You don’t update it, or choose to update it. Rather, the company updates it on its schedule and informs you when there is a new score to look at.
Merrick Bank Credit Card Recommendation
Merrick Bank cards are designed for people with low or bad credit scores, often resulting from a bankruptcy or foreclosure. As such, the terms and conditions are not great, and there are virtually no extra features like you would find on credit cards available to people with better credit scores. For example, there are no credit card rewards points or cash back offered. In addition, the annual fees can be pretty high.
If you have the ability to get a better credit card, do it. This is not good credit card for people with options. However, if your credit is messed up and you are looking to rebuild or improve your credit score, this card is a good option, especially if you get an offer with no annual fee. If not, I wouldn’t recommend this card.
Merrick Credit Cards = good for people rebuilding from bad credit. Stay away for everyone else.