The Merrick Bank Credit Card is a pretty good unsecured credit card for people with bad credit. You can get a credit limit of $300 to $1,350 to start, without placing a security deposit and with the potential for credit limit increases to reward consistently on-time payments. It’s probably going to cost you, though.
You might have to pay a one-time fee of up to $75 before even opening an account, for one thing. In addition, the annual fee you have to pay the first year your account is open will be $0 - $72, depending on the specifics of your credit history, how much debt you already have, your income and other factors. Similarly, if you carry a balance from month to month, you will have to pay interest at a high rate, with exactly how high depending on your overall creditworthiness. And if you keep your account open for longer than a year, you’ll face a $0 1st yr, $0 - $6 after monthly fee.
A lot depends on the specific offer you receive. You have to receive an offer to be able to apply.
What I Like About the Merrick Bank Credit Card
No Security Deposit
If you have bad credit and need to borrow money for an emergency expense, a card with a security deposit won’t help make ends meet. With a so-called secured credit card, your spending limit equals the amount of your deposit, so you can’t borrow more money than you have to start.
The Merrick Bank Credit Card has no such requirement. Instead, you could borrow $300 to $1,350 to begin with. That’s not the largest amount, but it could be a big help in the right situation.
On-Time Payments Lead to Higher Limits
If you’re approved for the Merrick Bank Credit Card and you pay the bill on time for the first seven months, you can get a credit limit increase that doubles your initial spending limit. If you start with a $300 limit, for example, you could get bumped up to $600.
Not all credit card companies are so transparent about their credit-limit-increase policies, but you really should pay at least the minimum amount required by the due date every month regardless. Otherwise, you’ll hurt your credit score even more. Ideally, you should also pay in full monthly in order to avoid interest charges.
Reports to All 3 Major Credit Bureaus
Using the Merrick Bank Credit Card responsibly can help improve your credit score. After all, credit scores reflect what’s in our major credit reports, and Merrick Bank relays information about this card to all three major credit-reporting companies each month. To benefit, you need to pay the bills on time and try to avoid using too much of your credit line.
You can use WalletHub’s credit score simulator to see how much a new credit card can improve your score.
$0 Fraud Liability & Other Basic Benefits
Like with other major credit cards, you won’t have to pay for unauthorized charges made with your Merrick Bank Credit Card, as long as you report them in a timely manner. In addition, you can benefit from other standard perks such as identity theft protection.
What I Don’t Like About the Merrick Bank Credit Card
Potential for an Initial Fee
You might have to pay a one-time fee as high as $75 to set up your account. It depends on how risky Merrick Bank thinks you are as a borrower.
This type of fee is fairly common among unsecured credit cards for people with bad credit, but it certainly isn’t standard. You should be able to find a fee-free alternative.
High Annual Fee Possible
If you have bad credit, the annual fee you’re assigned by Merrick Bank is likely to be closer to the $72 maximum possible with the card than its $0 minimum. As a result, you’re likely to pay a lot more than the average credit card applicant. The average annual fee among credit card offers available right now is $22.22.
Monthly Fees Starting the Second Year
After the first year, the card’s annual fee gets replaced by a $0 1st yr, $0 - $6 after monthly fee. Ideally, you will have improved your credit score enough to graduate to a better deal by that point.
High APR
Although it’s not the highest APR among unsecured cards for bad credit, paying interest at an annual rate of 26.7% - 29.70% (V) will cost you a pretty penny. The exact rate you receive depends on factors like your credit history and ability to pay the bills, but it’s likely to be more expensive than average if you have limited or damaged credit. The average APR for a credit card offer right now is 23.1%.
