Strong credit scores not only help you qualify for personal loans like car loans or mortgages, they may also help you qualify for small business loans. Entrepreneurs looking to build credit will want to check out the .
Strong credit scores not only help you qualify for personal loans like car loans or mortgages, they may also help you qualify for small business loans. Entrepreneurs looking to build credit will want to check out the .* It is a personal credit card, not a business credit card, and it offers a creative and easy way to help build or rebuild personal credit.
Here’s what you need to know.
How Does the Work?
You start by opening a Chime Checking Account and depositing at least $200 in qualifying direct deposits to be eligible to apply.
You then use your Chime Checking Account to fund your Chime Credit Builder secured account by transferring funds from your checking account, either automatically or manually. You can use the Chime app on your mobile device or you can log in online.
Money added to Credit Builder will be held in a secured account as collateral for your , which means you can spend up to this amount. This is money you can use to pay off your charges at the end of every month.
On-time payments are reported to the three major credit bureaus: Equifax®, Experian® and Transunion®.
Benefits of the
Here are the main benefits of the :
- $0 annual fee
- No interest**
- No credit check to apply
- No credit utilization reported to credit bureaus
- No minimum security deposit***
- No security deposit
- Automatic payments available to help build credit
- $0 foreign transaction fee
What You Need to Know About Fees and Charges
Cost is one reason this card is appealing. No minimum security deposit is required. You can open your Chime Checking Account with a qualifying direct deposit of $200.
While some secured cards carry annual fees, the has an annual fee of $0.
Out-of-network ATM withdrawal fees apply except at MoneyPass ATMs in a 7-Eleven location or any Allpoint or Visa Plus Alliance ATM.
As with any credit card you are considering be sure to review the Terms, Rates & Fees.
Why Choose the
Here’s why the can be a good choice if you want to build credit.
Every person will get different results but based on a representative study conducted by Experian®, Chime members who made their first purchase with Credit Builder between June 2020 and October 2020 observed an average FICO® Score 8 increase of 30 points after approximately 8 months. On-time payment history can have a positive impact on your credit score. Late payments may negatively impact your credit scores. Results may vary.
To help ensure on-time payments, Chime members may want to take advantage of the optional Safer Credit Building feature. Turn on Safer Credit Building to automatically pay your balance in full each month. Your balance will be automatically paid on time, every month.
Another helpful feature is Move My Pay. Set it up and it will move the amount of your choice from your Chime Checking Account into the Credit Builder secured account every payday.
Note these two features can also be good budgeting tools. Use Move My Pay to automatically move the amount you choose into your Chime Credit Builder secured account and know that you’re able to spend up to that amount. Then use the optional Safer Credit Building feature to make sure you don’t get busy and forget to make a payment.
Another appealing feature is that this card carries no preset limit, which can also be beneficial when building credit. Here’s why:
With most secured cards your credit line is equal to your security deposit (or close to it). Let’s say you open a secured card with a different credit card issuer—not the —and deposit $300. In most cases, that card issuer will report your credit card’s credit limit of $300.
Now let’s say you charge $250 on that card and end the statement billing cycle with a $250 balance. When the issuer reports that $250 balance to the credit bureaus, your credit utilization, or debt usage ratio will be 83%. (We divided the credit limit of 300 by the balance of 250 to arrive at that number.)
Credit utilization compares the balance reported on a credit card to the credit limit, and a high credit utilization ratio may negatively impact your credit scores, even if you pay on time.
The has no preset limit. Chime will not report utilization on your Chime Credit Builder account.
It’s worth noting that your credit scores may take a temporary dip when you open a new credit account. That’s because FICO® Scores take into account your length of credit history, and a new account impacts that factor. But when you pay on time, that effect is often temporary.
Learn more about credit age and other credit score factors that may impact creditworthiness.
How to Apply for the
Again, you can get started by opening a Chime Checking Account with a qualifying direct deposit of $200 or more. A checking account is required, then you can apply for the . Transfer funds from your Chime Checking Account to your Credit Builder secured account to start using the card.
There is no credit check required though you will need to provide your Social Security number when you open your Chime Checking Account. (Banks and other financial institutions are required to verify their customer’s identities to help prevent money laundering and the funding of other illicit activities.)
Is the Right for You?
If your goal is to build personal credit, the may be a solid choice.
However, if you are trying to establish business credit, you’ll need to look for a business credit card that reports to business credit reporting agencies. This card does not build business credit.
Also, it’s important to note that unlike other secured cards where virtually any type of deposit qualifies to fund your account, to open a Chime Checking account you must have a qualifying direct deposit, which Chime describes as “from your employer, payroll provider, gig economy payer, or benefits payer by Automated Clearing House (ACH) deposit OR Original Credit Transaction (OCT).” Not all self-employed individuals will be able to meet that requirement.
In addition, this card does not offer a rewards program such as cash back or travel rewards. If you have good credit, you may want to consider a card with those perks.
How Can Nav Help?
Nav can help you find consumer and business credit cards based on your qualifications. Connect your business data to Nav and compare business credit card offers from trusted partners by qualifying credit score, rewards, APR, annual fee, and sign up bonus.
Frequently Asked Questions About
What is the Limit on the ?
There is no preset limit on the . You can spend as much as you have deposited into your Chime Credit Builder secured account. If you want to spend more, you’ll deposit more into the secured account either from your Chime Checking Account.
Can You Spend from a Chime Secured Credit Card?
With many traditional secured cards, your deposit is held until you close the account and you make payments from another bank account. With the , you transfer funds into your Chime Credit Builder secured account from your Chime Checking account and you can then spend up to that amount and use that balance to make payments. In other words, no minimum security deposit is required.
Chime is a financial technology company, not a bank. Banking services provided by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC. The Secured Chime Credit Builder Visa Credit Card is issued by Stride Bank, N.A., Member FDIC, pursuant to a license from Visa U.S.A. Inc. and may be used for everyday purchases anywhere Visa credit cards are accepted.
*To apply for Credit Builder, you must have received a single qualifying direct deposit of $200 or more to your Chime Checking Account. The qualifying direct deposit must be from your employer, payroll provider, gig economy payer, or benefits payer by Automated Clearing House (ACH) deposit OR Original Credit Transaction (OCT). Bank ACH transfers, Pay Anyone transfers, verification or trial deposits from financial institutions, peer to peer transfers from services such as PayPal, Cash App, or Venmo, mobile check deposits, cash loads or deposits, one-time direct deposits, such as tax refunds and other similar transactions, and any deposit to which Chime deems to not be a qualifying direct deposit are not qualifying direct deposits.
**Out-of-network ATM withdrawal fees apply except at MoneyPass ATMs in a 7-Eleven location or any Allpoint or Visa Plus Alliance ATM.
***Money added to Credit Builder will be held in a secured account as collateral for your Credit Builder Visa 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.
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