Chime Credit Builder Review: What You Need To Know

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Are you looking for a way to build or rebuild your credit in 2022? The Chime Credit Builder Card is an opportunity to avoid the high interest rates and rules often associated with traditional secured credit cards.

With this program, Chime is offering a Visa® credit card that helps people improve their credit histories by making on-time payments in a controlled environment.

And you won’t have to pay any interest or annual fees.

Money expert Clark Howard says utilizing this fintech company (Chime is not a bank) for this type of credit card is a much better alternative than dealing with a traditional bank.

“Chime has done a great job of eliminating the junk fees and pain points you’d have with a bank,” Clark says.

“One of the ways that banks have treated people the worst is the way they handle people with no credit or a history of bad credit. They either want nothing to do with you, or they do these slimy, rip-off, high-fee secured card plans.”

Since Clark declared himself a big fan of the Chime Credit Builder on an episode of his podcast, we decided to gather all the important details to help you determine if it could be a good fit for you or someone in your life.

What Is Chime Credit Builder?

Chime Credit Builder Card
Chime Credit Builder Card via Chime

The Chime Credit Builder is a secured credit card that’s intended to help people build, improve or repair their credit history.

But instead of borrowing money at an ultra-high interest rate, you’re just borrowing based on the money you put in your secured account to prove that you are a worthy borrower down the line.

Chime, a popular new fintech company presenting itself as a banking alternative, offers this service to people with a Chime Spending Account and a qualifying direct deposit to that account.

Chime is a financial technology company and not an actual bank. Banking services for the Chime Credit Builder Card are provided by Stride Bank, N.A., Member FDIC.

Think of the Chime Credit Builder as a modern-day solution to a secured credit card, which are often rife with predatory interest fees, junk fees and restrictive policies. Those cards can end up being temporary financial prison sentences for people who are trying to qualify for more suitable lines of credit.


How Does the Chime Credit Builder Work?

Chime offers this credit-building service to people willing to do at least some of their basic financial transactions with the company.

Let’s dig a little deeper into what you can expect.

Set-Up Process

  1. Open a Chime Spending Account. To apply for this card, you must first have a Chime Spending Account. This works just like an online checking account. Team Clark’s Christopher Smith says this about the Chime Spending Account: “Free from the overhead expenses of operating physical branches, Chime passes along those cost savings to customers. It doesn’t charge monthly or overdraft fees and also doesn’t require a minimum deposit.”
  2. Make a qualifying direct deposit. To get the credit card, you must have made qualifying direct deposits of $200 or more to your Chime Spending Account within the last year. If you dig into the fine print, you’ll find that this direct deposit must be via ACH from an employer (government payments count, too) and cannot be substituted by personal transactions from Venmo, PayPal or another peer-to-peer digital wallet.
  3. Apply for the Chime Credit Builder credit card. With an open Chime Spending Account and a qualifying direct deposit, you’re ready to apply for the secured credit card. There is no credit check required to apply for the card.
  4. Set your spending limit by depositing money. Once you are accepted into the program, you’ll be able to set your spending limit for the card by depositing money into your secured account. In the most basic terms, you’re simply borrowing your own money to prove that you can pay it back at the end of the billing period.

How Do I Use This Credit Card?

This may sound different from a regular credit card, but your day-to-day behavior with it will actually be pretty similar to using a conventional credit card.

Chime touts a four-step process for using this card and consequently boosting your credit score.

  1. Move your money into the Chime secured account. This is the part that is not like a traditional credit card. You’ll need to load up your account in order to spend (kind of like a prepaid card).
  2. Spend your money with the Chime Credit Builder Visa card. This part is exactly like using a traditional credit card. It’s a Visa credit card that will spend just like any other. When you make a purchase, that amount is set aside in the secured account.
  3. Pay your balance each month. The money set aside in the secured account can automatically pay your month-end balance. You won’t get charged any interest, but you’re also required to pay the bill in full each period. This is a key piece to improving your credit score, so don’t miss out on it.
  4. Watch your progress get reported to the credit bureaus. This is also like a conventional credit card. Chime reports your payment activity to the credit bureaus. This can help build your credit score (more on this later).

Everything you deposit in the Chime secured account can be accessed toward paying your balance, whereas secured credit cards often require a large deposit that cannot be used to pay your monthly bill. Purchases with traditional secured cards may also be subject to extremely high interest rates.

Card Specs

Usually, when you get to the “card specs” section of one of our credit card reviews, you’ll see a lot of talk about fees and rewards programs. The Chime Credit Builder is free from most of those details.

In other words, Chime is keeping it really simple. And when it comes to new credit or repairing credit, simple is almost always the best way to go.

The answer is “NO” for any of the following common fees:

  • Annual fees
  • Maintenance fees
  • International fees
  • Interest on purchases
  • Minimum security deposit

Again, these are things that really make the Chime secured card stand out when compared to some of the traditional secured cards on the market. Fees are the norm there.

Of course, the flip side is that there are no real rewards or benefits to speak of here. The answer also is “NO” on things like welcome bonuses, cash back rewards or perks such as travel, cell phone and auto rental insurance.


What Gets Reported That Will Impact My Credit Score?

Since this card is designed to help you increase your credit score, Chime reports some of the things that will help you.

Chime reports your activity with this card to the following credit bureaus:

And you’ll be pleased to know that Chime will send information on the following:

  • On-time payments: This can help your payment history, which is a key factor in determining your credit score.
  • Duration of credit relationship: This is another one that helps your credit score over time. The longer you successfully do business with Chime (or any other lender), the more reliable you appear. Your credit score likely will go up as a result.

You’ll also benefit from what Chime doesn’t report:

  • Credit utilization: This is a measure of how much of your available credit you’re using at any given time. The lower your utilization, the better. Because there’s no pre-set limit with Chime, this credit utilization doesn’t apply for this card. This allows you to spend freely, up to the amount you’ve deposited, without worrying that you’re going to impact your credit score negatively.

One impact to your credit score, though, that is likely unavoidable is an initial dip when you open your card with Chime. The credit bureaus typically ding you for increasing your number of open lines of credit, but your score should bounce back quickly with positive credit activity.

How Much Can My Credit Score Improve With This Card?

Chime touts that participating in this Credit Builder program can, on average, increase your credit score by 30 points, as long as you make your payments on time.

It’s important to note that the credit score change is going to be different for everyone: You have a unique financial situation that is graded as such. But generally speaking, on-time payments and growth in your length of credit history should have a net positive impact on your credit score.

The 30-point increase claim comes from a representative study conducted by TransUnion. According to Chime, the study uncovered that “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.”

Chime Visa Debit Card vs. Chime Credit Builder Card: What’s the Difference?

If you’ve been considering signing up for Chime, you probably have noticed that the company is promoting the Chime Credit Builder card alongside a Chime Visa Debit Card.

The debit card is designed to allow for spending directly from your Chime Spending Account with no regard to credit reporting or credit score. It functions like a traditional debit card, meaning that money disappears from your account as soon as you swipe the card.


The debit card also carries a Visa logo and can be used wherever Visa is accepted.

The Chime Debit card does not have a monthly account fee or a minimum balance requirement.

Pros and Cons: Chime Credit Builder

Most new borrowers and credit rebuilders will be eligible to participate in this program.You have to open a Chime Spending Account to be eligible to apply for the credit card.
You can avoid fees and interest charges associated with “traditional” secured credit cards.You need to have a direct deposit made to your Chime Spending Account before applying for the card.
No credit check is required to participate.Your spending limit is based on how much you deposit, so effectively there’s no “instant access” to money you don’t have.

Final Thoughts: The Chime Credit Builder Card is just one of a handful of emerging solutions for those who haven’t established credit or need to repair their credit history.

And as people who are determined to help consumers make smart financial decisions that positively impact their lives, the development of programs like this one is music to Team Clark’s collective ears.

“You’re not stuck with the check cashers or the payday lenders,” Clark says. “There are more and more places for people that are alienated from banks or unbanked to be able to do the equivalent of banking and not get cheated.”

Remember, Chime is not a bank. It’s a financial technology company with banking services provided by a bank. And it’s not alone in trying to disrupt the secured credit card industry.

In addition to the Chime Credit Builder Card, Clark also recommends that you check out the Petal Card program for more secured card alternatives. Team Clark has reviewed the Petal Card options here. Petal credit cards are issued by WebBank, Member FDIC.

Do you have experience with the Chime Credit Builder? We’d love to hear about it in the comments below!

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