Merrick Bank is a credit card issuer that works with people building or rebuilding their credit
Merrick Bank is a private company that issues credit cards, not a full-service bank where you keep checking or savings accounts. They are based in Salt Lake City, Utah, and have been operating since 1988. Their main business is offering credit cards to people who have limited credit history, poor credit scores, or are working to repair past credit problems.
The company does not take deposits or offer traditional banking services. Instead, they make money by issuing cards and collecting interest and fees from cardholders. If you are looking for a place to deposit paychecks or pay bills, Merrick Bank is not that kind of institution — you would need a separate checking or savings account at a traditional bank or credit union for those purposes.
Key Takeaways
- Merrick Bank issues credit cards designed for people with limited or damaged credit history, not traditional bank accounts.
- Their secured credit card requires a cash deposit that becomes your credit limit, and the deposit stays in a separate account.
- Merrick Bank reports your payment activity to the three major credit bureaus, which can help build your credit score over time if you pay on time.
- The card comes with an annual fee and interest charges, so carrying a balance costs money — paying in full each month avoids interest.
- You will need a separate bank account elsewhere to receive paychecks or handle everyday banking.
How Merrick's secured credit card works
A secured credit card requires you to put down a cash deposit with the company. That deposit becomes your credit limit — if you deposit $500, you can charge up to $500 on the card. The deposit sits in a separate account and is not used to pay your bill; you still make monthly payments from your regular bank account like any other credit card.
The deposit protects Merrick Bank if you stop paying. It also gives you a way to build credit history without a lender taking a risk on you based on your past. As you make on-time payments, you demonstrate to credit bureaus and other lenders that you can handle borrowed money responsibly.
After you have held the card for a period of time — usually 12 to 18 months of on-time payments — you may be able to convert it to an unsecured card. An unsecured card does not require a deposit, and your deposit gets returned to you. At that point, your credit limit may increase as well.
Fees and interest you will encounter
Merrick charges an annual fee to hold the card, which varies depending on the specific card product. This fee is charged once per year, usually on your billing anniversary, and is deducted from your available credit or added to your balance.
If you carry a balance from month to month instead of paying it off, you will be charged interest. The interest rate (called the APR, or annual percentage rate) varies based on your creditworthiness and current market conditions. Merrick's rates tend to be higher than those offered to people with good credit, because the company is taking on more risk.
Late payments also trigger fees, and paying late can damage your credit score. Missing a payment by 30 days or more is reported to credit bureaus and stays on your credit report for seven years.
How Merrick reports to credit bureaus
One reason people use Merrick cards is that the company reports your payment history to Equifax, Experian, and TransUnion — the three major credit bureaus. This means your on-time payments build a positive record that other lenders can see. Over time, consistent on-time payments can raise your credit score.
However, this also means that missed or late payments are recorded and can lower your score. Before opening any credit card, understand that you are creating a public record of how you handle borrowed money. If you are not confident you can make payments on time, a credit card may not be the right tool for you right now.
What you need before you can open an account
To open a Merrick secured card, you will need to be at least 18 years old and a U.S. resident. You will need a valid Social Security number and a regular bank account where you can make deposits and payments. Merrick will run a credit check, which appears on your credit report as a hard inquiry and can temporarily lower your score by a few points.
You will also need to decide how much to deposit. The minimum and maximum deposit amounts vary by card product. Your deposit must be available in cash or in your bank account — you cannot use a credit card to fund the deposit.
Merrick versus other credit-building options
Merrick is one option among several for building credit. A credit-builder loan from a credit union works differently: you borrow a small amount of money, make payments into a savings account, and at the end you get the money back plus interest earned. This builds credit without the ongoing fees of a credit card.
A secured savings account at some banks and credit unions also builds credit history without a card. You deposit money, the bank holds it as collateral, and reports your account to credit bureaus. This costs less than a credit card because there is no annual fee or interest charges.
If you have someone willing to co-sign, you might also be able to get an unsecured card from a traditional bank without a deposit, though this requires the co-signer to take on legal responsibility if you do not pay.
What happens if you do not pay
If you miss payments, Merrick will contact you by phone and mail to collect. If you continue not to pay, the account goes to collections, meaning Merrick sells the debt to a third-party collector who then pursues you for payment. A collections account stays on your credit report for seven years and significantly damages your score.
In rare cases, Merrick or a collector may file a lawsuit to recover the debt. If they win, they can garnish your wages or place a lien on your property, depending on your state's laws. This is why it is critical to contact Merrick when ready if you cannot make a payment — they may be able to work out a plan with you before the account becomes seriously delinquent.
Frequently Asked Questions
Can I use a Merrick card to build credit if I have no credit history?
Yes. Merrick specifically serves people with no credit history or limited history. Your deposit protects the company, so they are willing to issue a card when traditional banks would not. Making on-time payments will create a credit record that other lenders can see.
What happens to my deposit if I close the card?
Your deposit is returned to you, usually within one to two weeks after you close the account and pay any remaining balance. If you have an outstanding balance, the deposit may be applied to it first. Check your cardholder agreement for the exact process.
Can I increase my credit limit without adding more money?
Yes, after you have made on-time payments for several months, you can request a credit limit increase. Merrick may grant this without requiring an additional deposit. However, they may also ask you to deposit more money if you want a higher limit.
Is Merrick Bank a scam?
No. Merrick Bank is a legitimate, regulated financial company. However, like all credit cards, it charges fees and interest. Read the terms carefully before opening an account so you understand the costs involved.
Do I need a Merrick card, or are there better options?
It depends on your situation. If you want to build credit quickly and do not mind paying an annual fee, a secured card works. If you prefer to avoid fees, a credit-builder loan or secured savings account from a credit union may cost less. Compare the options based on fees, interest rates, and how long you plan to use the product.