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There is no annual charge on Chime Credit Builder Visa and it does not require a security deposit or a credit check to be completed prior to application. Surprisingly, you will pay no interest.
However, just because a credit card has helpful features doesn’t imply it’s right for you. Guardrails like these can make it difficult to administer additional types of credit products in the future.
Suggested Read: What is a Good APR for a Credit Card
Chime Credit Builder Visa Secured Credit Card five things to know:
1. You Must Open a Chime Spending Account and Set Up a Direct Deposit to Qualify
With no Chime Spending Account, you are unable to obtain the Visa Secured Credit Card from Chime Credit Builder. To qualify for the Chime Spending Account, you must have deposited at least $200 directly into the account in the last 365 days. The connection between the account and the card enhances the card’s unique user experience, but for some, creating a bank account and receiving direct deposits can be a challenge.
Many other secured credit cards require a bank account to finance the security deposit. However, the OpenSky® Secured Visa® Credit Card might be an option for those without a bank account. You can easily pay the security deposit by using a debit card, check, money order, or Western Union transfer.
2. Chime Credit Builder Is Somewhat Similar to a Prepaid Debit Card
By moving money from your Chime Spending Account to the Credit Builder secured account via the Chime app, you can “assign” money to your Chime Secured Visa Credit Card instead of making a one-time security deposit that forms part of your credit limit. You can choose to have the money automatically or manually, for receiving payment. You can use the money in your Credit Builder safe account at all places where VISA card is accepted.
Because you can only spend up to the amount in your Credit Builder secured account, the card does not collect interest.
At the very least, your credit card is similar in some ways to a reloadable, pre-paid debit card (see below). Credit utilization isn’t recorded to credit bureaus, so keeping track of how much of your available funds you’re spending isn’t mandatory.
However, it reports your payment history, unlike with a prepaid debit card.
Credit card companies have begun to assist users with low credit limits. If you’re having trouble, get the Milestone Gold Card here.
3. You Can Automate Payments to Avoid Paying Late
The Safer Credit Building function is a twist on the autopay option seen on more traditional credit cards. It lets you pay your monthly amount automatically instead of manually.
When you make a purchase with the card, the entire purchase amount is held in your Secured Credit Account until you pay it off. The money you put on hold will be deducted from your bank account when your bill is due. This prevents you from paying your bill late and running out of money before it’s due.
4. Chime Credit Builder Doesn’t Earn Rewards
Cash-back benefits on a secured credit card are extremely rare but not unheard of. Chime Credit Builder Visa Secured Credit Card offers no reward program therefore.
As an alternative, the Discover it® Secured Credit Card comes with no annual fee and earns 2% back at petrol stations and restaurants on up to $1,000 in purchases each quarter (after which you’ll get 1% back) as well as 1% back on all other purchases if that’s an issue for you. There is an incentive for new cardholders called the Discover it Welcome Bonus, which is described as follows: “Introductory Offer: Discover offers unlimited cashback match. Discover will instantly match your first year’s cashback earnings! There are no restrictions on how much you can spend or how much you may earn. The only requirement is a dollar-for-dollar exchange.”
There are many other credit cards to choose from if the Discover it® Secured Credit Card isn’t for you.
5. It Won’t Teach You to Manage Other Credit Cards
When you have the Chime Credit Builder Visa Secured Credit Card, budgeting and paying your credit card bills on time will be a breeze. However, even if this is fantastic news for your credit scores, any subsequent credit card you obtain will operate completely differently. Eventually.
The training wheels come off quickly once you start using an interest- and fee-bearing unsecured credit card. To put it another way, revolving credit cards allow you to spend right up to your credit limit, then make the bare minimum payment as you accrue debt. A missed payment could result in additional fees, an increased interest rate, and a significant drop in your credit score.
However, before you apply for any credit card in the future, educate yourself on how they work using the Chime Credit Builder Visa Secured Credit Card.
Pros
- There are no recurring charges.
- There are no yearly interest fees.
- You dont need any kind of down payment.
- Pay down your monthly balance with the deposit you made at the beginning of the month (though you must replenish it afterward)
- Notifies all three major credit bureaus about potential fraud.
Cons
- You’ll have to open a Chime bank account with a direct deposit.
- Your deposit is the maximum credit limit you can acquire.
- There isn’t any way to go up to an unsecured card.
A Quick Look at Chime Credit Builder
- With no recurring charges each year
- There are no yearly interest fees.
- With no minimum deposit, you get a credit limit equal to your deposit.
- You can make monthly payments on your debt with the money you set aside in your Credit Builder account.
- There is no need to run a credit check to apply.
- Notifies all three major credit bureaus about potential fraud.
- Before you may apply for a Chime Credit Builder card, you must have received at least one direct deposit of $200 or more into your Chime Spending Account.
- Unlike other secured cards that keep your security deposit and compel you to pay your bill with separate funds, Chime Credit Builder lets you set up recurring monthly payments from your account.
- If you use money from your initial deposit to pay your bill, your card’s credit limit is reduced.
Does This Card Fit Your Personality Trait Set?
The Chime Credit Builder card is a good choice if you’re serious about building credit, don’t mind not paying interest, and are sure you can put money into your account each month to ensure you have a credit line. For those who like to carry a balance from month to month, or for those who prefer an established credit limit, another choice will be more suited to their requirements.
What’s the Process?
Chime Credit Builder cards may only be obtained by opening a Chime checking account (also known as a spending account). When you use your spending account, any purchases you make will be deducted from the available balance. You can use it much like a debit card in this fashion, and you can only spend as much as you have in your account.
Earn More Perks From Your Credit Card
It functions like a credit card since it notifies the main credit bureaus every month that you made your payments on time. Consider checking your credit report to find whether it’s improving.
You can use your card anyplace Visa is accepted by transferring money from your spending account to your Credit Builder card whenever you want.
Credit Utilization
Credit use might have an impact on your credit score if you use traditional credit cards. The amount you owe divided by the amount of credit you have available is your credit usage. Your credit use rate is 40% of your credit limit is $1,000, and you owe the credit card company $400. This is an example of high credit utilization. Credit bureaus prefer a percentage of 30% or less is preferred.
How Do You Apply for Chime Credit Builder?
Spending account deposits of $200 or more are required within the last 365 days. Applying for a spending account takes no more than a few minutes. A waitlist will be established for the Credit Builder card after that. You’ll be notified through email when it’s your turn.
An annual percentage yield of 0.50 percent is now available on savings accounts.
Is a Chime Credit Builder Card Right for You?
Chime Credit Builder is a free and no-interest solution to help you improve or rebuild your credit rating. When your credit score improves enough, you may be able to use the account as a debit card instead of a credit card.