In the ever-evolving world of finance, building or rebuilding credit can often feel like an uphill battle, especially if you’re grappling with the usual minimum security deposit and low credit limit hurdles. However, a promising solution has emerged in the form of the Secured Chime Credit Builder Visa Credit Card. This financial tool offers an exceptionally low barrier to building credit, but the question lingers: is this unconventional card worth the elevated accessibility? Let’s delve into the details and find out.
Finance Devil Rating
4.2 stars out of 5
To Recap
The Secured Chime® Credit Builder Visa® Credit Card stands out for several reasons. It requires no credit check, boasts minimal fees, and incorporates various safety measures, making it one of the most accessible and stable ways to build credit. However, while it certainly has its merits, a secured card may offer more rewards with less effort if you can manage the standard minimum security deposit and the accompanying low credit limit.
Best for Low-Cost Credit Building
Secured Chime® Credit Builder Visa® Credit Card
- Rewards Rate: N/A
- Annual Fee: None
- Intro Offer: N/A
- Regular APR: N/A
- Recommended Credit: No Credit History
Note: Chime is a financial technology company, not a bank. Banking services and the debit card are provided by The Bancorp Bank N.A. or Stride Bank, N.A., both Members FDIC. The secured Credit Builder card is issued by Stride Bank, N.A.
Chime® Credit Builder Visa Credit Card Overview
Traditional secured credit cards often present a daunting challenge due to large security deposits, high interest rates, and costly fees. However, the Secured Chime® Credit Builder Visa® Credit Card offers a refreshing take on secured cards by eliminating the need for a minimum security deposit, many standard card costs, and any credit checks.
As a popular neobank, Chime adopts a unique approach by making your credit limit equal to the total balance you’ve deposited into your secured account. This means that you can only spend the money you have, sparing you from APR charges, late payment fees, and over-the-limit penalties. Moreover, Chime does not report your credit utilization, so low balances won’t hinder your credit-building efforts.
The Chime Credit Builder Visa’s features make it a compelling option for those looking to improve their credit. However, it’s important to note that Chime requires you to maintain a Chime Checking Account in addition to your linked banking account, secured deposit account, and Credit Builder card. Unfortunately, this means you won’t earn rewards or have the opportunity to upgrade to an unsecured card with Chime.
While the Chime Credit Builder Visa offers remarkable accessibility and cost-efficiency for credit improvement, a straightforward secured card may be easier to manage and provide a more hands-on card experience, potentially speeding up the credit-building process.
READ ALSO: Unveiling the Capital One Platinum Secured Credit Card: A Comprehensive Review
Pros and Cons
Pros
- Poses fewer card costs compared to almost any other credit-building card.
- Applying doesn’t require a credit check—not even a soft credit pull.
- Offers one of the highest potential credit limits among secured cards, with a maximum secured account balance of $10,000.
Cons
- Requires a Chime Checking Account with at least one $200 direct deposit to apply for the card, equivalent to a standard security deposit.
- No opportunity to upgrade to an unsecured card.
- May build credit more slowly than other secured cards, as Chime doesn’t report your credit utilization.
How the Chime Credit Builder Card Works
The Chime Credit Builder card is not your typical secured credit card. It operates with a few unique features that are worth understanding before you decide whether it’s the right choice for your credit-building journey.
The Credit Line
Instead of requiring an upfront security deposit like most secured cards, the Chime Credit Builder card sets your credit limit equal to the balance you’ve deposited into your secured account. However, there’s a catch. To even be eligible to apply for this card, you must open a Chime Checking Account and set up a direct deposit of at least $200 within the previous 365 days. This direct deposit requirement is mandatory, even if you don’t plan to use direct deposits for other purposes.
The advantage here is that you can’t spend more money than you have in your secured account, which means you can’t carry a balance and accrue interest charges. However, it also means that you need to ensure you have enough funds in your account to cover your card expenses each month.
Depositing Your Funds
Managing your money with the Chime Credit Builder card involves handling funds across several accounts:
- Chime Checking Account
- Secured Account
- Chime Credit Builder Visa card
- Linked External Banking Account (if not solely using direct deposits)
Chime has made it relatively easy to transfer money between these accounts. However, if you’re new to credit cards, this process could feel somewhat tedious. The direct deposit requirement could also be a deal-breaker if you prefer not to have your paycheck routed into your Chime account or if your job doesn’t offer direct deposits.
The only way to add funds to your secured account is by transferring money from your Chime Checking Account. You have multiple deposit options, with automatic direct deposits (“Move My Pay”) being the most convenient. Alternatively, you can manually transfer money from a linked external bank account through the Chime app if it’s supported by Plaid. In a pinch, you can also make a one-time deposit of $25 to $200 from your external bank’s debit card during the life of your account. Additionally, Chime allows check deposits (if you’re eligible), peer-to-peer money transfers through the Chime app, and cash deposits at in-network ATMs.
Making Payments
When it comes to making payments, you have two options:
- Auto-Pay: You can activate the “Safer Credit Building” auto-pay option, which simplifies managing your Chime accounts and Credit Builder Visa card. All you need to do is move the money from your Chime Checking Account to your card’s account each month, ensuring you never miss a payment.
- Manual Payments: If you prefer more control over your finances, you can choose to pay manually each month. Chime will still remind you of your due date, and you can use your linked external banking account to make payments. This flexibility can be valuable if you want to maintain a consistent credit limit or keep minimal funds in your Chime accounts.
Building Credit
Building credit with the Chime Credit Builder card primarily involves paying off your card on time and in full every billing cycle. It’s essential to keep your credit utilization ratio low compared to your limit and keep your card active to increase your average account age. A positive payment history is the most crucial factor for your credit score.
However, there’s a unique aspect to consider: Chime doesn’t report your credit utilization to the three major credit bureaus. This can be both an advantage and a drawback. On the one hand, not reporting your credit utilization is beneficial if you can’t maintain a high secured account balance. On the other hand, it means you can’t leverage a high credit limit (up to $10,000) to boost your credit score.
Building credit takes time, and credit utilization is a significant factor you can immediately control. The Chime Credit Builder card also lacks the ability to upgrade to an unsecured card in the future, unlike traditional secured cards. These factors suggest that the Chime Credit Builder card might take a bit longer to improve your credit score but is a safer option if your financial resources are limited.
Withdrawing Your Funds
If you need to withdraw cash from your Credit Builder card’s secured account, you can do so through a cash advance at an ATM. It’s worth noting that cash advances typically come with fees and a high APR. However, Chime’s version of a “cash advance” functions more like a cash withdrawal, deducting the amount from your Available Spend Amount. There’s no cash advance APR, and using in-network ATMs (Allpoint, Visa Plus Alliance, or MoneyPass) incurs no fees. For out-of-network ATM usage, Chime charges a $2.50 cash advance fee.
A Deeper Look into the Current Card Offer
Here are some additional insights into the Chime Credit Builder card’s current offer:
- Rewards Rate: N/A
- Welcome Offer: N/A
- Annual Fee: $0
- Purchase Intro APR: N/A
- Balance Transfer Intro APR: N/A
- Regular APR: N/A
While the Chime Credit Builder card doesn’t come with rewards, this is common among credit-building cards. However, it’s worth mentioning that some secured cards, like the Discover it® Secured Credit Card, offer cashback rewards.
Other Cardholder Perks
The Chime Credit Builder card doesn’t offer many additional features, aligning with its focus on providing an accessible path to building credit. However, it does come with some standard perks commonly found in credit cards:
- 24/7 Pay-Per-Use Roadside Dispatch Assistance
- Dovly Uplift™ Credit Management and Report Inaccuracy Repair Service Access
- Access and Discounts to Partner Programs (e.g., Shipt deliveries, Sofar presale tickets, Preferred Hotels and Resorts bookings, and more)
Chime® Checking Account Perks
Although these perks are not exclusive to the Credit Builder Visa card, they are associated with the Chime Checking Account, which is required to apply for the secured card:
- Automatic Paycheck Notification: Chime notifies you as soon as your paycheck is directly deposited into your Chime Checking Account, allowing you to access your funds earlier.
- SpotMe®: This feature acts as overdraft protection for Chime Checking Account debit cards. If you receive at least a $200 direct deposit that month, you can overdraft up to $200 with no fees. However, your subsequent deposits go toward covering the negative balance. You can also send and receive up to four SpotMe $5 “Boosts” to and from friends in the Chime app to extend your overdraft limit for that month.
Both of these perks can help you manage your Credit Builder card’s limit effectively. Getting your paycheck early can boost your credit limit for upcoming bills, and SpotMe can provide emergency cash if you need to use your card for unexpected expenses.
Rates and Fees
Secured credit cards are often associated with high rates and fees, but the Chime Credit Builder Visa card stands out with its minimal fees. Here’s a breakdown of the fees you may encounter:
- Late Payment Fees: None
- Cash Advance Fees: None (applies only to out-of-network ATMs)
- APR: None (since you must pay your balance in full each month)
- Annual Fee: $0
- Foreign Transaction Fees: None
- Cash Advance Fee for Out-of-Network ATMs: $2.50 (waived for in-network ATMs)
These fees are relatively low and can be easily avoided, making the Chime Credit Builder card a cost-effective choice in the world of credit-building cards.
How the Chime Credit Builder Card Compares to Other Secured Cards
Now that you have a better understanding of how the Chime Credit Builder card works, let’s compare it to some other secured credit card options to help you make an informed decision.
Chime Credit Builder Visa vs. SuperCash™ Card
Chime Credit Builder Visa Card
- Finance Devil Score: 4.2 stars out of 5
- Annual Fee: None
- Rewards Rate: N/A
- Recommended Credit Score: No Credit History
SuperCash™ Card
- Finance Devil Score: 3.9 stars out of 5
- Annual Fee: None
- Rewards Rate: 2% – 10%
- Recommended Credit Score: No Credit History
The Chime Credit Builder Visa card and the SuperCash™ Card have some similarities. Both use a secured account balance for their credit limits, waive most fees, and have no annual fees. However, there are key differences:
- Rewards: The SuperCash™ Card offers cash back rewards ranging from 2% to 10%, making it potentially more rewarding for cardholders who want to earn while they build credit. In contrast, the Chime Credit Builder card doesn’t offer rewards.
- Checking Account Requirement: The Chime card requires you to open a Chime Checking Account and set up a direct deposit of at least $200 to be eligible for the Credit Builder card. The SuperCash card doesn’t have such a requirement, potentially making it more accessible upfront.
- Credit Utilization Reporting: The SuperCash card reports credit utilization to the major credit bureaus, which can positively impact your credit score. Chime doesn’t report credit utilization, which can be an advantage if you struggle to maintain a high secured account balance but a disadvantage if you want to leverage a high credit limit to boost your score.
The choice between these cards depends on your preference for rewards, your ability to meet the direct deposit requirement, and your credit-building strategy.
Chime Credit Builder Visa vs. Discover it® Secured Credit Card
Chime Credit Builder Visa Card
- Finance Devil Score: 4.2 stars out of 5
- Annual Fee: None
- Rewards Rate: N/A
- Recommended Credit Score: No Credit History
Discover it® Secured Credit Card
- Finance Devil Score: 5 stars out of 5
- Annual Fee: $0
- Rewards Rate: 1% – 2%
- Recommended Credit Score: No Credit History
The Chime Credit Builder Visa card and the Discover it® Secured Credit Card are both excellent options for building credit. Here’s how they compare:
- Rewards: While the Chime card doesn’t offer rewards, the Discover it® Secured Credit Card provides cashback rewards. Discover matches all the cash back you earn at the end of your first year, making it a potentially more rewarding choice.
- Annual Fee: Both cards have no annual fees, which is a significant advantage for credit-building cards.
- Credit Limit: The Chime card offers a credit limit equal to your secured account balance, while Discover starts cardholders with a $200 minimum security deposit and allows you to increase your limit over time. Discover also reviews your account for potential transition to an unsecured card, which the Chime card does not offer.
- Credit Reporting: Both cards report to the major credit bureaus, helping you build a positive credit history.
If you’re looking for a credit-building card with rewards and the potential to transition to an unsecured card, the Discover it® Secured Credit Card might be the better choice. However, the Chime Credit Builder card’s lack of interest and credit checks can make it an attractive option for those who want a straightforward credit-building experience.
Best Cards to Pair with the Chime Credit Builder Card
While your primary focus with the Chime Credit Builder card should be on building your credit score, you might consider pairing it with another credit card for specific rewards or benefits once your credit improves. Here are some options:
- Capital One QuicksilverOne Cash Rewards Credit Card: Once you have a fair credit score, this card offers 1.5% cash back on all purchases, making it a solid choice for everyday spending.
- Discover it® Cash Back: If your credit score improves and you’re looking for cashback rewards, this card offers rotating 5% cash back categories and 1% on all other purchases.
- Chase Freedom Unlimited®: With good credit, this card provides 1.5% cash back on all purchases and features a variety of redemption options.
These cards can complement the Chime Credit Builder card by offering rewards and benefits that align with your financial goals and spending habits.
8 Things To Know About The Chime Credit Builder Visa Secured Credit Card
Minimum Deposit Requirement: To apply for the Credit Builder card, you must first receive a single qualifying direct deposit of $200 or more into your Chime Checking Account. This deposit must come from sources like your employer, payroll provider, gig economy payer, or benefits payer via Automated Clearing House (ACH) deposit or Original Credit Transaction (OCT). Keep in mind that certain transactions, such as bank-to-bank ACH deposits and peer-to-peer payments using apps like Venmo and Cash App, do not qualify as eligible direct deposits.
No Credit Checks: Chime does not require a credit check for approval, making it accessible to individuals with bad credit or those who have faced recent rejections from multiple credit card applications. This approach can help avoid negative impacts on your credit score due to multiple hard credit checks.
Fee Structure: Chime’s Credit Builder card stands out for its fee structure. It doesn’t charge annual fees, international fees, maintenance fees, or interest on purchases. While this means no rewards or bonuses are offered, it can be beneficial for those seeking a break from high interest fees.
Unique Account Design: Unlike typical secured credit cards, Chime’s card doesn’t mandate a minimum security deposit to open an account. Cardholders can transfer money into their secured account at any time, with each transfer contributing to their monthly spending limit. This offers flexibility but requires careful budgeting to avoid overspending.
Credit Building: Chime reports account activity to all three major credit bureaus, facilitating the establishment of on-time payment behavior and lengthening of credit history. The absence of credit utilization reporting means cardholders need not worry about keeping their spending within a certain percentage of their credit limit. However, they should be aware of late payment consequences.
Qualifying Direct Deposit Requirement: To apply for the Credit Builder card, you need to have received a single qualifying direct deposit of $200 or more into your Chime Checking Account. This deposit must originate from sources like your employer, payroll provider, gig economy payer, or benefits payer through Automated Clearing House (ACH) deposit or Original Credit Transaction (OCT). It’s important to note that certain types of deposits, such as bank-to-bank ACH transfers, Pay Anyone transfers, verification or trial deposits from financial institutions, peer-to-peer transfers using services like PayPal, Cash App, or Venmo, mobile check deposits, cash loads or deposits, one-time direct deposits like tax refunds, and similar transactions may not qualify as eligible direct deposits, as determined by Chime.
Credit Reporting: Chime will report your financial activities to the major credit bureaus, namely TransUnion®, Experian®, and Equifax®. The impact on your credit score can vary, as credit scores are independently calculated by credit bureaus based on a range of factors, including your financial decisions with other financial service providers.
Secured Account: Any funds added to your Credit Builder account will be held as collateral for your Credit Builder Visa card. This means you can use this money to cover your charges at the end of each monthly billing cycle
Chime’s Credit Builder Visa Secured card can be a suitable choice for individuals looking to rebuild or establish credit history. It features no annual fees, no credit checks, and no interest charges on purchases. Cardholders set their credit limits by making deposits into a Credit Builder account. While it’s a good tool for beginners to build credit, they should also learn about how regular credit cards function for future financial management.
Finance Devil’s Take: Is the Chime Credit Builder Visa Card Worth It?
The Chime Credit Builder Visa card serves as a valuable credit-building opportunity for individuals who might not have easy access to traditional banks or secured cards. Its lack of credit checks, minimum secured account balance requirements, and minimal fees make it an exceptionally accessible choice for steadily improving your credit score without the obstacles of credit utilization or excessive fees.
However, it’s important to note that the Chime Credit Builder card may require a bit more effort to manage than a typical secured card. The mandatory direct deposit requirement could be challenging for some, especially if you prefer not to have your paycheck routed into your Chime account. Additionally, if you struggle to meet the $200 direct deposit requirement, you might find it challenging to maintain a sufficient secured account balance.
Ultimately, the Chime Credit Builder card is an excellent option if you’re seeking a low-cost way to build credit and believe that fees, low credit limits, or credit checks on other cards could pose obstacles. However, if you’re open to alternatives, highly-rated secured cards may offer more rewards, educational benefits, and a faster path to improving your credit score while keeping costs reasonable. Your choice should align with your specific financial situation and credit-building goals.
To Wrap It Up
The Secured Chime® Credit Builder Visa® Credit Card offers a unique path to building or repairing your credit. With its minimal fees, lack of credit checks, and accessible credit limits, it provides an attractive option for many individuals. However, it’s essential to weigh these benefits against the requirement for a Chime Checking Account and the potential for slower credit growth. Ultimately, your choice should align with your specific financial goals and circumstances.
FAQs
Is it possible to use the Chime credit card with insufficient funds?
No, the Chime Credit Builder card won’t allow you to make any purchases if your secured account doesn’t have sufficient funds. According to the card’s application disclosure, you must add funds to your secured account within 60 days of receiving your approval notification, or Chime will cancel your card.
Which financial institution issues the Chime Credit Builder Visa card?
Chime, a financial technology company, does not directly issue its own credit cards or banking accounts. Instead, Chime partners with Stride Bank to provide the Secured Chime Credit Builder Visa card and collaborates with The Bancorp Bank for the Chime Checking Account.
Are there transaction limits associated with the Chime Credit Builder card?
The Secured Chime Credit Builder Visa card comes with two primary transaction limits: a $515 cash advance limit and a spending limit of up to $10,000 (or up to your Available Spend Amount for either type of transaction).
Is Chime a secure platform?
While Chime is generally considered safe, there are some factors to be aware of. Chime operates as a neobank, acting as a digital intermediary rather than a traditional bank that holds your money. Neobanks, also known as “challenger banks,” are relatively new in the financial market and often cater to underbanked customers. They do not always adhere to the same federal regulations as traditional banks.
Although Chime enjoys a solid reputation as one of the leading neobanks in the United States and partners with FDIC-insured banks, regulatory concerns have arisen periodically in recent years. These concerns stem from a high number of customer complaints regarding account closures and delays in resolving disputes compared to well-established banks. Notably, a 2021 ProPublica report highlighted numerous complaints filed with the Consumer Financial Protection Bureau and Better Business Bureau (BBB).
Is the Chime Credit Builder Visa card made of metal?
The Chime Credit Builder card you initially receive is constructed from plastic. However, there is an opportunity to upgrade to a metal card version by completing specific transactions outlined in promotional offers periodically sent via email. To qualify for the upgrade, these transactions must amount to at least $1, with a maximum of five transactions per day, all completed within 60 days of receiving the email notification.
Is the Chime Credit Builder card suitable for people with no credit history?
Yes, it’s recommended for individuals with no credit history.
Can I upgrade to an unsecured card with Chime?
No, Chime does not offer an opportunity to upgrade to an unsecured card.
How does the Chime Credit Builder card compare to traditional secured credit cards?
The Chime Credit Builder card eliminates the need for a security deposit and offers more accessible credit limits but may build credit more slowly due to non-reporting of credit utilization.
What is the maximum secured account balance with the Chime Credit Builder card?
The card offers a maximum secured account balance of $10,000.
Does Chime require a credit check when applying for the Credit Builder card?
No, Chime does not require a credit check for card applications.
The Secured Chime® Credit Builder Visa® Credit Card offers a compelling option for individuals seeking to improve their credit. While it may not be the right fit for everyone, its accessibility and cost-effectiveness make it a viable choice for those with limited resources and a desire to enhance their financial standing.
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