The card’s safety-first approach, as well as one-of-a-kind tools for credit building, make the Chime Credit Builder one of our picks for the
Best Secured Credit Cards of 2022.Chime Credit Builder Visa® Secured Credit Card
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- No credit check
- Annual fee: None
- Base rewards: None
- Bonus rewards: None
- Intro offer: None
- APR: 0%
Since this card’s main purpose is credit building, it’s accessible to potential cardholders of all credit levels. In fact, the Chime Credit Builder requires no credit check. All you need to get the card is to open a Chime Checking Account and have at least $200 in it. You won’t have to pay any monthly, minimum balance, or overdraft fees on the account.
Once you have the money in your checking account, you can transfer as much or as little as you want into your Credit Builder secured account. The amount you transfer becomes your credit limit which the card won’t allow you to go over. You can add more money at any time. In a way, the Chime Credit Builder works like a prepaid card that reports your activity to credit bureaus.
This card does have its downsides. There are no rewards and unlike many other secured credit cards it doesn’t offer you a path to a regular card once you have restored your credit.
How this card can help you build credit
Like most credit cards, the Chime Credit Builder reports your credit card activity to the three major credit bureaus—Experian, TransUnion, and Equifax. This information goes into your credit reports and can impact your credit. If you manage the card well, your credit scores may improve.
The Chime Credit Builder leaves little room for error in the credit-building game. For instance, you can turn on the Safer Credit Building feature, which automatically pulls money from your secured account to cover your credit card bill. This can help you ensure you’ll never miss a due date. Payment history is the most influential credit score factor, so a pattern of on-time credit card payments can go a long way.
Since the card won’t let you spend more than what you have in your Credit Builder account, it charges no interest. Most secured credit cards have high interest rates, creating the risk of going into expensive debt while you’re working on your credit. With Chime, this won’t be an issue.
You also won’t have to worry about credit utilization even if your credit limit is very low. Credit utilization, or how much of your credit line you’re using, is the second most important credit score component. The Chime Credit Builder doesn’t report this data, so even if you’re utilizing 100% of your available credit every month, your scores won’t suffer a hit.
All these features make for the safest environment to establish your credit history. Unfortunately, this comes with a price: Chime doesn’t offer a path to an unsecured card. Moreover, the Credit Builder is Chime’s only credit card product. So when your credit score is ready for an unsecured card, you’ll have to apply with a different issuer.
Who benefits most from this card?
If you want to build credit but worry about getting into debt with a traditional credit card, the Chime Credit Builder is an excellent option for you. Its features will allow you to focus on the task by eliminating most of the risks associated with credit cards.
At the same time, chances are, you’ll want to move on to other cards in the future. The increased safety the Chime Credit Builder offers doesn’t leave room to practice using a “real” credit card. There are no late fees to watch out for and no temptation to only make minimum payments. There’s no need to be aware of how interest accumulates. While this is great for your wallet and credit, it may be a good idea to educate yourself on responsible credit card usage before you apply for another card.
In addition, the Chime Credit Builder doesn’t offer any rewards. Not so long ago, the same could have been said about most secured credit cards. In the last two years, however, this has begun to change. Popular cash back cards like the Capital One Quicksilver Cash Rewards Credit Card and the Bank of America® Customized Cash Rewards Credit Card have gotten secured siblings. The secured versions offer the same rewards but require a deposit. This allows cardholders to earn cash back on their spending while they’re building credit.
The advice, recommendations or rankings expressed in this article are those of the Buy Side from WSJ editorial team, and have not been reviewed or endorsed by our commercial partners.