Chime bank offers an actual credit card to its customers. You know- just like every other online banking institution out there. The only difference is it is designed with the working class adults on mind.
What do I mean by this?
I mean the Chime credit card is designed for safe credit building. This is due to its low pre-approval requirements. Chime does not need you to have a good credit score and credit history, before you qualify for one.
As can be seen with other credit card institutions, a good credit background is needed to determine your eligibility. But, the new Chime card dealt away with it. In addition, you get to earn about 1.5% cash back on purchases. This is as long as you have a monthly direct deposit of $200 or more on your Chime account.
If you observed above, I said the new Chime card rather than its builder card. Here is what I need you to know about the new Chime card.
What Is A Chime Card?
So, what exactly is a Chime credit card?
A Chime card is the latest version of the Chime credit builder card. So, what is the difference between Chime card and Chime credit Builder Card?
The difference between the Chime card and the Chime credit builder card is it earns you a 1.3% cash back on rotating expense categories. Chime classifies this rotating expense categories as bills, gas or food expenses. Unlike the Chime credit builder card, the Chime card actually saves you money with its cash back rate.
Additionally, it is a secured credit card. Simply put, you get to spend your own money without borrowing. You do this by transferring money from your Chime account to your Chime card.
As a result, there is no interest charges. You will not have annual fees on maintaining the credit card. You do not have to worry about a minimum security deposit on the secured credit card. Or even better, worry about having a great credit score to qualify for it.
Finally, the Chime card lets you cash out at ATMs. Chime has more than 40,000 ATMs you can easily withdraw from. It is just the perfect credit card for building a credit history. This is because you can build your credit history and credit score safely without getting in debt.
Chime Card Pre-Approval Requirements
To qualify for the Chime credit card, you need an account first. You can create one on the Chime website. I recommend you read What To Know About Setting Up A Chime Account article. I gave a step by step approach to creating a Chime account.
You get to select what color of Chime card you want shipped to you during account creation. Chime does not factor your credit history during application process. This is because the credit card is made, so people can build their credit history safely.
After Chime account creation, the card typically takes about 5-7 days to arrive to you. What else do I want you to know about the Chime card, my dear reader?
Well, you get three accounts when you get a Chime card. You get a checking account, a secured deposit account and a Chime credit card account. I know- it is a lot, but all work together to help you spend seamlessly without getting in debt.
Here is what I mean.
Money sent to your checking account is transferred to your secured deposit account (SDA). The SDA sets the spending limit on your Chime card. Although you have three accounts, there is only one balance reflected. You get to see one amount remaining to spend on the app. Do you understand now?
You only spend your money. The maximum spent is the limit set by your secured deposit account, which is funded by direct deposits to your Chime checking account. Anyways, I talked about the Chime card pre-approval in length on How To Get A New Chime Card Without Stress. Go and read it, because I simplified the process for you.
Chime Credit Card Limit
Does Chime card have a pre-set credit limit, my dear reader?
The Chime card does not have a pre-set credit limit. It is left for you to set the limit, since your limit is tied to your deposit amount. If you remember a few paragraphs above, I mentioned how money from checking account is moved to your Chime card secured deposit account.
Well, it turns out whatever you have as a balance on the SDA is what your Chime card limit will be. If you deposit $500 to your Checking account, your Chime card secured deposit account gets $500. Therefore, your Chime credit card limit becomes $500.
This is what I think makes Chime card great for anyone looking for a credit card to build credit without getting in debt. You are totally in control of your Chime credit card maximum limit. Regardless of what it is, Chime reports your credit behavior to the credit bureaus which build your credit.
What Happens If I Miss A Payment On My Chime Card?
You will not be charged a fee, but you will be reported to the credit bureau. This is especially, when it is past your due date. It is not shocking, is it?
Do not be shocked, my dear reader. If you remember somewhere in this article of mine, I mentioned the Chime card was made purely to help working class adults build their credit safely. Well, it also translates to your credit behavior being reported monthly to a credit bureau.
In the case of a missed payment on your Chime card, that will be reported too. As a result, your credit report will have a negative event. Your credit score will be affected.
Finally, a missed payment will lock your card. You will not be able to make purchases with it. I encourage you enroll with the Chime autopay feature to automatically set money aside to make payments on due dates.
Is Chime Card A Good Credit Card?
Personally, I think it is a great credit card. I leave you to be the judge of that though. Before you make up your mind on it, here are other benefits which come with having it.
- You can access up to $500 of your paycheck before your pay day, especially when you set up a Chime direct deposit. This is through a Chime feature called MyPay.
- Fee-free ATM withdrawals
- No interest or annual charges
- No late fee charges
- Fee-free overdraft
As you see from the above, a typical secured credit card does not have all these features. This is what makes a Chime card a good credit card. Especially for anyone trying to build his or her credit. Or even better, have a better control on their expenditures while using a credit card.
On the whole, Chime has one of the best beginner’s credit cards out there. I think it is designed with young working class adults on mind. Hence, why I recommend it since it eliminates the chances of you getting in debt while trying to build a great credit score and history.
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