Secured credit cards are one way for people with bad credit histories to rebuild their credit score and learn how to manage credit better than they did the first time around. They have a built in credit limit which can’t be exceeded, as it matches the level of the security deposit which you leave with bank. The Merrick bank secured MasterCard is one card to consider if you want to use credit to help to rebuild your credit score, but the security deposit won’t earn you any interest from the bank.
The Merrick secured MasterCard advertises a number of benefits to the card holder, which are not really appropriate for those trying to establish sensible financial patterns. The benefits are actually initial offers on other cards which only cost $1 for the first month but then carry monthly fees of $12.95 to obtain cards which give discounts for further spending.
Promoting spending on such services as discounts for eating out, visiting theme parks and having your car cleaned are unnecessary expenses for those trying to get back on their feet financially. If you sign up for the card and look at the benefits, make sure that if you take them you have the right to cancel them after the first month. Obtaining a one of gift certificate to Lowes for $20 is not worth paying a monthly membership fee to obtain.
The Merrick secured MasterCard itself is not free. In common with other secured cards it carries an annual fee of $36. The APR is an expensive variable one at 17.45% currently, with a penalty APR which will not exceed $35%, if late payments are received. The initial security deposit you make must be a minimum $300 which will give you a credit limit of $300, but you can deposit up to $3000. At no time can the credit limit on the card exceed $5000. An additional card on the account costs an extra $12, and late payment fees range from $15 to $39 depending on the current balance.
If you are considering a secured credit card to improve your credit score you should always ensure that your monthly payments are received on time, as late payments will have an adverse effect on your credit score, and immediately land you with late payment fees and the penalty APR. This is of course the quickest way to find your self back in debt again, and the whole point of using a secured card is lost.
The secured MasterCard from Merrick compares favourably to other secured credit cards on the market, but a negative is that your security deposit is not earning any interest. Certainly the card is preferential to unsecured cards for sub prime credit also issued by Merrick, which carry higher fees.
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