Is the Chime Credit Builder Card Worth It? – Things You Need To Know

Fixing your credit history and past mistakes regarding your credit card is elemental to how you handle your finances. Also, if you want to build your credit history from ground zero, then you can do that as well.

There are many programs that will actually allow you to do so. Chime Credit Builder card, in fact, is one of the latest products that you can use to improve your credit scores.

Yes, it will take 1 or 2 months to finally get the credit score of your credit card back on track. But is it for everyone? No. Also, is Chime Credit Builder Card worth using? If you are struggling to find answers to all of these questions, then this article will come in handy.

Here I have listed all that you need to know about Chime Credit Card Builder.

What Is Unique About Chime Credit Builder Card?

So, the uniqueness of the Chime Credit Builder Card depends on its issuers and how they are different from traditional credit card issuers. Most of the issuers of Credit cards are direct lenders.

When you make any charge using their credit cards, they are letting you borrow money. But, the Chime Credit card works differently. It is because they are not a bank but a fintech company.

They contract with different financial institutions and offer you different financial services. Stride Bank is responsible for issuing the Chime Credit Builder cards. However, the Chime Checking account is provided by Bancorp Bank and Stride together. Users need the Chime Checking account to check their accounts.

Also, there is another good news. Chime also collaborates with Visa. So, you can use the Visa Credit Card secured by Chime Credit Builder. This Visa card will be accepted everywhere Visa Credit card is accepted.

How Does the Chime Credit Card Works?

So, how does the Chime Credit Card work? Well, it is almost like any other credit card but with a little bit of a plot twist. Traditional credit cards require you to deposit an amount to the issuer, thereby securing your card through a security deposit. This amount stays with the issuers until the card is closed or the card transitions into an unsecured card.

But, it is different for the Chime credit builder card. This credit builder card uses the money deposited in your account as a security deposit.

So, yes, there is no need to keep your money collecting dust in the hand of the issuers.

How To Use Chime Credit Builder Cards?

It is fairly simple. You have to start by opening a Chime checking account. Here are the different steps you need to follow.

1. Open A Chime Banking account

The good news is that you do not have to pay any fees for the Chime banking account. You can easily get your banking account opened with Chime. But you need to also meet the eligibility criteria – which is very easy. You must receive a direct deposit which is usually a paycheck. The direct deposit should be made to your account with a minimum amount of $200 within the last year.

2. Choose “Credit Builder.”

Once you open the checking account, you can choose “credit builder” as an option and fill out the online form.

3. Fund The Credit Card

Now you can move an amount of money to your Chime credit builder Card and charge your card. This will remain as your credit limit.

Keep These In Mind…

Once you are done with the processes, you will receive the Chime credit builder card through the mailing address. Now you can use the card everywhere Visa card is accepted. Chime will use the money in your secured account and pay all the monthly bills you are supposed to pay.

However, the difference is that you will not be able to carry over a balance which you can with any other type of credit card. So, there is a possibility for the Chime Credit builders to run out of balance.

You can also solve this by using “Move My Pay,.” This is a feature that allows you to transfer an amount of your choice automatically from the direct deposit to the Chime Credit Card builder.

Chime Credit Builder Pros & Cons

You will find both drawbacks and merits of using Chime Credit cards. Here are some of the benefits of using the Chime credit cards and its drawbacks.

Pros

• You are using your own money. So there is no need to worry about paying any interest.
• People with low credit often use credit cards that charge a monthly fee. But Chime Credit card does not.
• There is also no strict limit you need to worry about.

Cons

• There is no reward option.
• No incremental payments.
• There are no perks for the users.

This Is How Chime Credit Builder Cards Affect Your Credit

Getting Chime Credit Builder Card is like almost any other credit card. In most cases, the issuer will run a hard credit inquiry to determine your qualification. This hard inquiry for a credit card does not get placed on the credit file. Also, it will temporarily affect the credit score you already have.

But when the CHime Credit card is issued, they will report the monthly payment activity to three different credit bureaus. These bureaus are Transunion, Equifax, & Experian. Payment history is a very important factor in a FICO Score. So, if you are planning to improve your credit score, you need to have as many on-time payments as possible.

Chime Credit Builder Card helps by keeping your balance from negatively affecting your utilization ratio. This credit card does not report the utilization of your credit to the bureaus. So, how is this possible? They make it possible by letting you use your own fund and not borrowing.

Is Chime Credit Builder Card Worth Using?

When you use a credit card, there is a chance of overspending or racking up lots of costly debts. That is when the CHime Credit Builder cards come in to help you and allow you to improve your credit score. How? By making you make steady payments.

When the credit score is higher, you are ready to open a credit card ( unsecured) with a wide span and many helpful features. So, it is safe to say that building a Chime credit card can be worthwhile, especially if your credit score is poor. Once your credit score is high, you can use it to your benefit. I hope that you have found the answer to your question. However, if you need us to clear any other queries, reach out to us through the comment section below. Thank you.

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