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Chime has built its entire brand around helping its customers to improve their credit and finances. So, it should come as no surprise that Chime should offer a secured credit card.
Called “Credit Builder”, this card offers an easy way to build or rebuild your credit and it is used in conjunction with the other Chime banking products, which include a checking account and savings account. There is no annual fee and no credit check required, making this an ideal card if you don't have a credit history.
Upgrade offers personal loans as well as number of credit card options, but the base card is a unsecured option that is most appropriate for those who have poor or no credit. The primary aim of this card is to help improve credit and there is no annual fee.
You can qualify for a credit line of up to $25,000 with no account opening fees or security deposits. As with the Chime card, there are no rewards associated with this card, but it is an affordable option if you want to build or fix your credit.
General Comparison
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| |
|---|---|---|
Upgrade card | Chime Credit Builder Card | |
Annual Fee | $39
| $0
|
Rewards | None
| None
|
Welcome bonus | Earn a $200 bonus after you open & fund a Rewards Checking Plus account & make 3 debit card transactions within 60 days. If you previously opened a checking account through Upgrade or do not do so as part of this process, you are not eligible. Payout made within 60 days of meeting the conditions.
| None
|
0% Intro APR | None
| N/A
|
Foreign Transaction Fee | Up to 3%
| 0%
|
Purchase APR | 14.99% – 29.99%
| N/A
|
Compare The Perks
Upgrade Card
No Annual Fee or Interest: Chime Credit Builder comes with no annual fees or interest charges, making it a cost-effective option for users.
No Credit Check: Applying for Chime Credit Builder doesn't involve a credit check, providing accessibility to individuals with various credit backgrounds.
No Minimum Security Deposit: Unlike many secured credit cards, Chime Credit Builder doesn't require a minimum security deposit, offering flexibility for users.
Reports to All 3 Credit Bureaus: Chime Credit Builder helps you build credit by reporting to all three major credit bureaus, supporting your credit growth over time.
No Credit Utilization Reporting: Chime’s unique setup doesn’t have a pre-set credit limit, meaning your credit utilization isn’t reported. You can spend based on the amount you transfer, offering flexibility without worrying about utilization ratios.
- $0 Fraud Liability: Enjoy peace of mind knowing you won’t be held responsible for unauthorized charges.
Chime Card
- No Credit Check: Many credit cards, even the secured ones will still initiate a hard pull on your credit report upon application. This can drop your credit score, even if you are approved for your new card. However, Chime will not check your credit, making it a good card to build credit.
- You Can Adjust Your Credit Limit: The funds that you move across from your Chime Spending account into your Credit Builder is the amount you have available to spend. You can set up an automatic transfer each time you get paid or move money manually. The transfers take less than one minute, so you can then use your credit card to make your purchases.
- No Interest: Since you cannot spend more than the available amount in your Credit Builder account, there are no interest charges. In essence, this card acts like a prepaid reloadable debit card, which prevents you from getting into debt.
- Maxing Out Won’t Impact Your Credit: If you’re trying to build your credit score, you need to be aware of your credit utilization ratio. However, with this card, your credit utilization is not reported to the credit bureaus. The only way your card usage could damage your credit is if your payments are late.
- Autopay to Ensure On Time Payments: Chime has its Safer Credit Building feature, which is a type of autopay that can help you to avoid missing payments. When you use your card, the purchase amount is put on hold on your account and when the bill comes due, the on hold money is used automatically.
Compare The Drawbacks
As with all credit card options, there are both positives and negatives associated with these cards. It is important to be aware of these potential card drawbacks, so you can make an informed financial decision.
Upgrade Card
- Weak User Interface
Some customers have had issues using the card website and app. The interface is not particularly intuitive or user friendly. Upgrade has acknowledged these concerns and has stated that it is working on making changes.
- No Reward Benefits
Unlike other Upgrade card options, this card does not have any cash back or sign up bonuses. So, unless you have less than average credit, the other Upgrade cards represent a better deal.
Chime Card
- Need A Chime Spending Account
There is a link between the Chime Credit Builder card and a Chime Spending account. It is not possible to open a card account only, as you’ll need to transfer money from your Spending account to fund your card.
- No Upgrade Possibilities
While Chime’s card can help you to build and improve your credit, once you have a better score, there is no other Chime card to move up to. So, there is little reason to continue with this card and you’ll need to open a brand new account with a different issuer. However, building your score may take some time.
- It Doesn’t Build Good Credit Card Management Skills
Although the card makes it easy to stick to a budget, and pay your bill on time, it does function very differently from a conventional credit card. This means that you will not gain any experience with revolving balances.
How to Maximize Cards Benefits?
Like any other card, there are some things that can help you to get more rewards with the same use, here are some:
This card is a unique financial product, but there are some tips that can help the card to work even better for you.
- Prepay the balance: If you want to free up funds, you can prepay some or all the balance to reduce your repayment term. Paying off the balance will also free up your line of credit.
- Use it to save for large purchases: This card is ideal for financing larger purchases you need time to pay off. Instead of focusing on smaller purchases, you can take advantage of interest savings on significant expenses.
- Use the credit monitoring tools: Upgrade offers free credit monitoring alerts and tools—use them to stay informed and in control of your credit health.
Chime is designed to be simple to use to help you to boost your credit. Your payment activity will be reported to the credit bureaus, so you can show responsible behavior.
You don’t need to worry about your credit utilization ratio for this card, so you can transfer funds to your Credit Builder account and use the card for purchases.
One of the best ways to maximize the benefits of this card is to set up an automatic transfer to your credit builder account each time you get paid.
You can then use the card for purchasing groceries and other day to day purchases, and each time you pay the balance via the Safer Balance feature, it will be reported to the credit bureaus.
Bottom Line
If you’re looking to build your credit, there are some great credit cards that can help you to organize your finances and boost your score.
Both of these cards are designed to help those who have less than average credit, but there are some key differences that will influence which card is the better option for you.
Why You Might Want the Upgrade Card?
The Upgrade card is a great option that could be good if:
- You Don’t Have a Security Deposit: Unlike with the Chime card, you don’t need to put funds into the account to set your credit limit. Upgrade will set your credit limit at up to $25,000, which makes it ideal for those who don’t have cash to act as a security deposit.
- You Want the Card for Travel: Since this card is a Visa card, it is widely accepted around the world. Additionally, you don’t need to worry about foreign transaction fees, as they are not charged with this card.
- You May Need to Carry a Balance: The card is a hybrid credit card and line of credit. This means that if you are not able to pay off the entire balance, you can pay down your balance each month with a fixed rate and equal monthly payments. However, you'll pay more on interest charges.
When You Might Want the The Chime Card?
The Chime card can be a good fit for your needs if you're looking for:
- You Want an Integrated Banking Experience: The Chime card is designed to work with the Chime Spending account, which will help you to integrate your entire banking experience. Chime has a checking account and a savings account, along with the Credit Builder card that can help those with poor or no credit.
- You Have Regular Income: This card works best when you can regularly transfer funds into your Credit Builder account. This will allow you to use your card for regular purchases and then pay your balance at the end of the billing period. This kind of activity will be reported to the credit bureaus to help improve your credit score.
- You Want a Flexible Credit Limit: You can set your own credit limit by transferring funds into your Credit Builder account. This is ideal if you will need a higher credit limit at certain times and other occasions when you won’t need as much.
Compare The Alternatives
If you're looking for to build credit and even get some rewards – there are some good alternatives you may want to consider:
|
|
| |
|---|---|---|---|
Chime Credit Builder | Capital One Journey | Discover It Student Cash Back | |
Annual Fee | $0 | $0
| $0
|
Rewards |
None
None
|
Up to 1.25%
earn 1% cash back and another 0.25% if you pay on time, so you can boost your cash back to a total of 1.25%
|
1-5%
5% cash back on activated rotating category purchases (up to $1,500 in purchases each quarter, then 1%) and 1% on all other purchases
|
Welcome bonus |
None
None
|
None
$5 per month for 12 months on select streaming subscriptions when you pay on time
|
Match Bonus
Match Bonus for the first 12 months
|
Foreign Transaction Fee | 0%
| None
| $0
|
Purchase APR | N/A
| 29.99% (Variable)
| 18.24% – 27.24% Variable
|
Compare Chime Credit Builder Card
The Chime card is more flexible and has no credit check, whereas Capital One opens up possibilities for transitioning to an unsecured card.
Chime Credit Builder Secured Visa vs. Capital One Secured Mastercard: Comparison
Chime is our winner as it offers no credit check and no foreign transaction fees, unlike the Citi Secured which is a more conservative card.
Chime Credit Builder Secured Visa vs. Citi Secured Mastercard: Comparison
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The secured Chime Credit Builder Visa® Credit Card is issued by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC, pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa credit cards are accepted. Please see the back of your card for its issuing bank.
Chime is a financial technology company, not a bank. Banking services and debit card provided by The Bancorp Bank N.A. or Stride Bank, N.A.; Members FDIC. The secured Credit Builder card issued by Stride Bank, N.A.
