Are you looking to build credit from scratch but struggling to find the right credit card? Look no further! The Chime Credit Builder Card is here to help you establish a strong credit history without the hassle of a security deposit. In this comprehensive review, we will delve into the features and benefits of this card, as well as its downsides. So, let’s get started!
What is the Chime Credit Builder Card?
The Chime Credit Builder Card is a secured credit card designed specifically for credit builders. Unlike traditional secured cards that require a security deposit, the Chime Credit Builder Card allows you to deposit as much or as little as you want. This means you have more flexibility in getting started on your credit-building journey.
TIME’s take
The Chime Credit Builder Card is a game-changer for credit builders. With minimal fees and no minimum deposit requirement, it eliminates many barriers to entry. However, if you are looking for rewards or the option to upgrade to an unsecured card in the future, there may be better alternatives out there.
Pros and Cons of the Chime Credit Builder Card
Pros:
- Very few fees
- No minimum deposit
- Reports payment history to credit bureaus
Cons:
- Does not earn rewards
- No option to upgrade to an unsecured card
- Does not report credit utilization to credit bureaus
Who is the Card For?
The Chime Credit Builder Card is ideal for individuals who receive direct deposits of at least $200 but may not have a significant amount of cash at hand. If you prefer to avoid fees, this card is perfect for you. Chime charges no enrollment fees, annual fees, or interest on your balance. Moreover, you will have access to over 60,000 free ATMs, including MoneyPass ATMs in 7-Eleven locations, Allpoint ATMs, and Visa Plus Alliance ATMs.
This card is also an excellent option if you want to avoid a hard credit check. Chime does not perform a hard credit check, making it accessible to those with poor or no credit history.
How Chime Credit Builder Stands Out
Traditional secured credit cards typically require an up-front deposit equal to your credit limit. However, many individuals looking to build credit do not have the extra cash to deposit. The Chime Credit Builder Card eliminates this requirement. To get started, you need to open a Chime checking account and have an eligible direct deposit of at least $200. Then, move money from your checking account to your Credit Builder account. The amount you transfer becomes the credit limit for your Credit Builder Card. Unlike other secured cards, there is no minimum deposit required to start using the Credit Builder account.
Features of the Chime Credit Builder Card
Cheaper than Many Alternatives
The Chime Credit Builder Card sets itself apart by charging almost no fees. The only fee you might encounter is an out-of-network ATM withdrawal fee. However, Chime has an extensive network of over 60,000 ATMs, making it easy to avoid this fee. In terms of cost, it is one of the most affordable secured credit cards available.
No Preset Spending Limit
Unlike many secured credit cards, the Chime Credit Builder Card has no preset spending limit. Your spending limit is equal to the amount you transfer from your Chime Checking account to the Credit Builder account. As you use the card, your spending limit will decrease by the amount spent.
No Ongoing APR
With the Chime Credit Builder Card, you can only charge the amount available in your Credit Builder account. This removes the possibility of carrying a balance and incurring interest charges, as you would with unsecured credit cards.
Few Bells and Whistles
While the Chime Credit Builder Card offers many advantages, it does lack some of the extra perks commonly found with other credit cards. For example, there are no rewards programs, travel insurance, or purchase protection. However, the benefits it does provide make it a worthwhile choice for building credit.
The Fine Print
- Annual fee: annual_fees
- Purchase intro APR: intro_apr_rate,intro_apr_duration
- Balance transfer intro APR: balance_transfer_intro_apr,balance_transfer_intro_duration
- Regular APR: reg_apr,reg_apr_type
Additional Hidden Perks
While the Chime Credit Builder Card may not offer an abundance of hidden perks, it does have a few tricks up its sleeve:
- FICO® Score tracking: You can easily check your FICO score using the Credit Builder app.
- Card blocking: In case your card is lost or stolen, you can quickly block it online or through the Chime app.
- Basic Visa benefits: As a part of the Visa network, the Chime Credit Builder Card comes with basic Visa card benefits.
- Move My Pay: This feature automatically transfers a set amount from your Chime Checking account to your Chime Credit Builder account every time you get paid.
- SpotMe: This optional feature acts as overdraft protection, allowing you to overdraw your account by up to $20 without any fees.
- Paycheck notifications: Chime lets you receive your paycheck up to two days early, providing timely notifications.
What Could Be Improved
If your primary goal is building credit, the Chime Credit Builder Card covers most bases. It has minimal fees and no minimum deposit requirement. However, there are a few areas that could be improved. Firstly, the card does not report credit utilization to the credit bureaus. While this means you don’t have to worry about a high credit utilization ratio negatively impacting your credit score, it also limits your ability to demonstrate responsible credit usage with a low utilization ratio.
Another area for improvement is the lack of an upgrade path. As your credit history improves, having the option to upgrade to an unsecured card provides more purchasing power. Unfortunately, Chime does not currently offer any unsecured cards, so you would need to explore other options for this feature.
Lastly, the Chime Credit Builder Card does not offer any rewards. While it is uncommon for secured credit cards to provide rewards, having a little extra incentive would be a nice touch.
Card Alternatives
If the Chime Credit Builder Card doesn’t meet your specific needs, consider exploring these alternatives:
Bottom Line
The Chime Credit Builder Card is an excellent choice for individuals looking to build credit without a significant upfront investment. With minimal fees and no minimum deposit requirement, it offers a hassle-free credit-building experience. However, if rewards or the option to upgrade to an unsecured card are essential to you, it may be worth considering other alternatives. Remember, building credit is a journey, and finding the right card is a crucial step.
Frequently Asked Questions (FAQs)
How do I use the Chime Credit Builder Card?
The Chime Credit Builder Card is a Visa card, so it can be used wherever Visa cards are accepted. To get started, open a Chime Checking account and transfer money from your Credit Builder account to cover your card transactions. The only exception is SpotMe, which allows you to overdraw your Credit Builder account by up to $20.
How do I cancel the Chime Credit Builder Card?
To cancel the Chime Credit Builder Card, follow these steps:
- On the Chime app home screen, tap the gear icon to access Settings.
- In the Personal Info section, tap the edit link.
- Select “Close Account.”
- Read the “Close My Account” message and verify your identity to proceed.
- Tap the “Submit Request” button to finalize the account closure.
How do I transfer money from the Chime Credit Builder Card?
To transfer money from the Chime Credit Builder Card to your Chime Checking account, use the “Move Money” feature in the Chime app.
That wraps up our ultimate guide to building credit with the Chime Credit Builder Card. Remember, building credit takes time and responsible credit management. Choose the card that best suits your needs and start your credit-building journey today!