Merrick Bank Secured Credit Card review: A low-interest card for credit-builders

The Discover it® Secured Credit Card stands out from other secured credit cards because it does more than just help build credit. You’ll earn rewards on purchases and bonus cash back on gas and dining purchases. The Cashback Match matches all cash back earned on purchases at the end of the first year, which can be one of the most valuable cash back welcome offers you can find with any credit card.

However, if you know that you’ll need to carry a balance and don’t plan on spending a lot, you might want the Merrick Bank Secured to lower what you’d pay in interest charges.

The Petal 2 Visa Credit Card (issued by WebBank) is one of the top credit-building cards available since it doesn’t charge many standard credit card fees. Unlike the Merrick Bank Secured card, you don’t have to worry about an annual fee or fees for late or returned payments or foreign transactions. You’ll also earn up to 1.5 percent cash back on all purchases after a period of on-time payments, which is a great incentive. 

The Petal 2 card is intended for people with no credit or fair credit and you may not qualify if you need to rebuild your credit. However, the Merrick Bank Secured is more accessible to those who need to repair their credit.

You must pay your security deposit within 20 days of applying. You can make your payment using any bank’s online payment service, ACH, MoneyGram, Western Union, money orders or checks. If you miss the deadline, your application will be denied.

Any remaining security deposit balance will be returned to you after your secured credit card account is closed and there are no outstanding balances.

In order for your application to be processed, you must make a minimum security deposit of $200. You can add funds (up to $3,000) to your initial deposit at any time to increase your credit line.

A student or credit-building card’s cost has a large influence on its overall score. 

Students already face a ton of expenses, so extra card costs are best avoided if possible, and people with limited or damaged credit tend often find the cards they can qualify for are much pricier than traditional credit cards designed for people with a good or better credit score. 

We compare a card’s total cost, including any annual fees, account activation fees, monthly fees and more against the total cost of other cards in this category and assign each card a score based on its affordability. We also factor rewards-earning potential into our assessment of a credit-building card’s total cost, subtracting a card’s expected earnings from the sum of its fees. 

To get a sense of a card’s rewards-earning potential, we estimate its average annual rewards rate and average annual earnings based on the most popular spending categories (as covered in the latest Bureau of Labor Statistics consumer spending report). 

However, we use a slightly lower spending assumption ($300 per month or $3,600 per year) to estimate average earnings, assuming students and credit-builders will start out with a lower credit limit, will want to keep credit utilization low and will focus primarily on small purchases they can easily pay off.

Given the many costs students face — from textbooks to laptops — the presence of an introductory APR on purchases or balance transfers also plays a role in a student card’s score.

A card’s APR is also a major factor in its credit-building score. Each card’s average APR is compared against the average APR of other cards in the category, and the cards with lower-than-average APRs receive a higher rating. 

Though high APRs are hard to avoid when you’re just starting out or working on your score, credit-builders should strive for as low an APR as possible since they’re likely to either be new to managing cards or trying to establish better financial habits and avoid falling into debt.

Along with a credit-building card’s cost, our rating system takes into account how easy the card makes it to build credit. To assess this, we evaluate its credit limit potential and minimum deposit requirement.

Unsecured cards with a high starting credit limit and secured cards that let you put down a large deposit and get a matching high credit limit will score the highest according to our “Ease of building credit” rubric and are more likely to appear on our list. 

This is because a high credit limit can make it much easier to keep your credit utilization low, a primary credit-building factor that makes up 30 percent of your FICO credit score. 

Secured cards have a slight advantage in this category since the maximum credit limit on a secured card tends to be much higher than the typical starting credit limit on an unsecured card that’s available with a bad or fair credit score. However, unsecured credit-building cards have the upper hand in another key aspect of building credit: accessibility. 

Cards that carry no or a low deposit requirement can also receive a high score according to our “Ease of building credit” rubric since these cards offer a lower barrier to entry than secured cards that require you to put up hundreds of dollars in an upfront deposit. 

Indeed, some users may prefer to pay a non-refundable $50 annual fee while they work on their credit score than tie up hundreds in a refundable security deposit.

We also evaluate each card’s benefits based on how useful they are for students or someone looking to build a positive credit history and save money on everyday spending. 

We consider the inclusion of a rewards program, student-centric perks and access to your credit score or a credit monitoring service of prime importance, along with the ability to prequalify for the card with only a soft credit pull and a clear path to increase your credit limit or graduate to an unsecured or full-fledged rewards card.

Cards that include these benefits are likely to score higher according to our credit-building card scoring rubric.