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People with bad creditor no credit might be wondering how they are supposed to build or repair their credit when you have to have good credit to be approved for most credit cards, personal loans, or car loans that would help establish a positive credit trend.
One credit card, the Chime Credit Builder Card, understands this paradox and Chime has created a card specifically for those who had bad or no credit so that they can positively impact their credit history.
The card boasts an impressive $0 fee, 0 APR, and $0 security deposit card that truly allows cardholders to build or rebuild their credit without having to worry about sneaky expenses.
Chime Credit Builder Pros and Cons
- No Credit Charges
- No Annual Fee
- Reports to All 3 Credit Bureaus
- No Minimum-Security Deposit Requirements
- Automatic Payment Option Prevents Late Payments
- Must Have Direct Deposit Account with Chime
- No Credit Limit Larger than the Direct Deposit Amount
- No Sign-up Bonuses or Rewards
What Is the Chime Credit Builder Card?
The Chime Credit Builder Card is a 0% APR and $0 fee credit card designed to help people with bad credit or no credit build a positive credit history.
There is no credit check run to qualify for the Chime Credit Builder Card and there is no minimum-security deposit to get started.
The Chime Credit Builder does report to all three major credit bureaus and just might be the ideal card to help people get back on their feet.3
How Does the Chime Credit Builder Work?
To get the Chime Credit Builder Card, the applicant must establish a direct deposit into a checking account, known as Chime Spending Account, or a Chime Savings Account with Chime.1
The funds in the Chime Spending Account or Chime Savings Account are then transferred by the cardholder into the Chime Credit Builder Secured Account to fund the purchases made on the Chime Credit Builder Card.
The limit on the credit card is the same as whatever the balance of the Credit Builder Secured Account and the balance is automatically paid out of the Chime Builder Secured Account at the end of the month.3
You might be thinking those mechanics sound an awful lot like a prepaid debit card and that’s because they do.
However, debit cards do not report to the main three credit bureaus and do not help cardholders to build a positive credit history. The Chime Credit Builder Card does.
Chime Credit Builder VISA® Secured Credit Card Features and Benefits
No Annual Fee or Foreign Transaction Fees
The Chime Credit Builder Card is not the only secured credit card on the market, but it is one of the few secured credit cards with no annual fee or transaction fees.
No Credit Check Necessary to Apply
Because the Chime Credit Builder Card’s target audience is those individuals with no credit or bad credit, they do not require a credit check to apply for the card.
The only requirement for being approved for a credit card through Chime is opening a Chime Spending Account or a Chime Savings Account with direct deposit so that purchases on the credit card are fully funded.
Reports to All Three Credit Bureaus
Even though the Chime Credit Builder Card walks like a debit card and talks like a debit card, but it is not a debit card.
The Chime Credit Builder Card reports timely payments to the three major credit bureaus and those payments are made automatically for the cardholder out of their Chime Builder Secured Account at the end of each month.
Start Building Credit Responsibly
The Chime Credit Builder Card limit is directly tied to the balance of the Chime Builder Secured Account which helps users to know their limits (pun heavily intended).
This card offers a great learning experience and steppingstone for those looking to rebuild or build their credit for the first time.
Set-Up Automatic Payments
There are three ways to pay off the Chime Credit Builder Card every month.
Cardholders can pay through ACH from a different bank every month, pay from their Chime Spending Account, or have the bill come directly out of the Chime Builder Secured Account, which is the preferred method since it is guaranteed to always be on time.
The most important thing to remember here is no matter how you pay, the limit on your Chime Credit Builder Card will always be determined by the balance in the Chime Builder Secured Account.
No Security Deposit Required
The Chime Credit Builder Card does not require a security deposit, but the card cannot be opened without a Chime Spending Account or Chime Savings Account.
The balance in these accounts can be transferred into the Chime Builder Secured Account and this account is what is used to fund the card purchases.
There is no minimum-security deposit on paper, but cardholders will only be able to spend on their card the amount that is secured by in their Chime Builder Secured Account.
How Does the Chime Credit Builder Compare to Other Secured Credit Cards?
#1. Discover it® Secured Credit Card vs. Chime Credit Builder Card
The Discover it® Secured Credit Card and the Chime Credit Builder Card are both designed to help people rebuild or establish credit, but not all cards are created equal.
The Chime Credit Builder Card is a no-fee, no reward card available to anyone with a Chime Spending Account.
If you are looking for impressive rewards and welcome bonuses, the Chime Credit Builder Card is not it, but you also do not have to worry about late fees, APR, or transfer fees.
The Discover it® Secured Credit Card, on the other hand, offers an impressive 2% back on gas station and restaurant purchases up to $1,000 each year and an additional 1% back on all other purchases and Discover will match all the cash back rewards cardholders earn in the first year as a welcome bonus.
While rewards are great, the Discover it Secured Card also has a steep 22.99% variable APR on purchases and might cause people trying to rebuild or build their credit to dig themselves into a bigger hole.
People who think they will need to carry a balance on their card at any point in their credit rebuilding or building journey might find that the Discover it Secured Card is a better option than the Chime Credit Builder Card, but the 22.99% APR might also be a tough pill to swallow.
#2. Secured Mastercard® from Capital One® vs. Chime Credit Builder Card
Both the Secured Mastercard® from Capital One® and the Chime Credit Builder Card has no fees.
The Chime Credit Builder Card also has no interest on purchases, but the Secured Mastercard® from Capital One® carries a 26.99% APR which is one of the higher interest rates on the market.
Cardholders carrying the Chime Credit Builder card are limited to the balance of their Chime Builder Secured Account and Capital One Secured Mastercard cardholders can get a credit limit of up to $200 with a deposit of $49, $99, or $200 and are eligible for increases in credit limit in as little as six months.
Like the Chime Credit Builder Card, the Capital One Secured Card also does not have any welcome bonuses or rewards on purchases.
When stacked side by side, the Chime Credit Builder Card is going to be more appealing for those who truly need to rebuild their credit.
There will not be any rewards with either of these cards, but the no APR on purchases really makes the Chime Credit Builder Card pull out ahead.
#3. First Progress Platinum Prestige Mastercard® Secured Credit Card vs. Chime Credit Builder Card
The First Progress Platinum Prestige Mastercard® Secured Credit Card might be a bit of a tongue twister to say, but the benefits of this card might just make it worth the mouthful.
The First Progress Platinum Prestige Mastercard Secured Credit Card, unlike the Chime Credit Builder Card, does have an annual fee.
The annual fee is $49 and allows cardholders to carry a balance sometimes instead of having to pay the card off at the end of every month.
The APR is only 9.9% variable which is considerably lower than other cards that allow cardholders to carry a balance.
The First Progress Platinum Prestige Mastercard has a fully refundable security deposit, but this deposit comes with an impressive credit limit of $200 to $2,000.
While the Chime Credit Builder Card has no fees and no security deposits, the only way a cardholder can get a credit limit of $2,000 is to have $2,000 in their Chime Secured Builder Account to fully secure the purchases made on the card.
Of the secured credit cards on the market, the First Progress Platinum Prestige Card has one of the lowest interest rates on purchases when cardholders think they will need to carry a balance.
Frequently Asked Questions
Do I Need to Have a Chime Spending Account to Use Credit Builder?
Yes. Opening a Chime Spending Account with Chime is necessary before individuals can be considered for the Chime Credit Builder Card.
Does Chime Charge Any Fees for Using Credit Builder?
Across the board, there are zero fees for using the Chime Credit Builder Card. The Chime Credit Builder Card has no annual fees, no monthly APR, no security deposits, no late fees, and no one-time fees.
Does Chime Credit Builder Really Work?
Chime Credit Builder cardholders on average improve their credit score by 30 points according to a report completed by TransUnion in 2019.2
Is It Safe to Use the Chime Credit Builder?
The Chime Credit Builder Card is an impressively safe way for people with no credit or bad credit to build a credit history or improve a bad credit score. Because the spending is secured, users cannot get ahead of themselves or credit limits.
Does the Chime Credit Builder VISA® Secured Credit Card Require a Security Deposit?
There is no security deposit for the Chime Credit Builder Card. However, the purchases made on the Chime Credit Builder Card are secured by the balance of the Chime Spending Account so while there is no security deposit, cardholders are only able to spend what they have deposited.
Bottom Line: Chime Credit Builder Card Review
The Chime Credit Builder Card is a great fee-less, 0 APR, and $0 security deposit option for anyone who has no credit or bad credit.
The card is designed to truly help people build a positive credit history through secured, automatic payments and reporting to the three major credit bureaus.
While the card does not have any major perks or rewards associated with it, anyone could argue that improving your credit score by 30+ points is reward enough.
Chime Credit Builder Disclosures:
¹To be eligible to apply for Credit Builder, you need to have received a qualifying direct deposit of $200 or more to your Spending Account within the last 365 days of your application. The qualifying direct deposit must have been made by your employer, payroll provider, or benefits payer by Automated Clearing House (ACH) deposit. Bank ACH transfers, Pay Friends transfers, verification or trial deposits from financial institutions, peer to peer transfers from services such as PayPal, Cash App, or Venmo, mobile check deposits, and cash loads or deposits are not qualifying direct deposits.
²Based on a representative study conducted by TransUnion®, members who started using Chime Credit Builder in September 2019 observed a median credit score (VantageScore 3.0) increase of 30 points by January 2020. Impact to score may vary, and some users’ scores may not improve.
³Money added to Credit Builder will be held in a secured account as collateral for your Credit Builder card, which means you can spend up to this amount on your card. This is money you can use to pay off your charges at the end of every month.
⁴On-time payment history can have a positive impact on your credit score. Impact on your credit may vary, as credit scores are independently determined by credit bureaus based on a number of factors. Chime will report your transactions to Transunion®, Experian®, and Equifax®.