Chime Credit Builder vs. Other Credit Cards

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Secured credit card products like the Chime Credit Builder Secured Visa® Credit Card help build your credit in a way that is easy and safe. But what is it that makes these products any different than a standard credit card?

There's a number of differences that I want to cover but the biggest difference is the way that these products view and handle debt. Just as a reminder, with a standard credit card you’ll make a purchase with your card and instead of that money coming directly out of your bank account like it would with a debit card, the credit card company is the one actually paying the merchant and then you are responsible for paying back the credit card company. So you spend $100 at the store, the credit card company gives the store $100 and you now owe the credit card company 100 bucks.

Sounds fairly simple but the catch is that if you don't give the credit card company their 100 bucks by the due date, they will start to add interest to that balance of $100 and I'm not talking about one or two percent interest. Credit cards are notorious for having some of the highest interest rates of any financial product with many cards having rates of 20 to 30% and if you're brand new to this whole credit card space those rates can go even higher. That means that in our simple example if you make a $100 purchase and don't bother to pay it off, after one year you now owe the credit card company $130 if your interest rate is 30% of course removing the minimum payments you'd need to make and any late fees.

The Chime credit builder card essentially allows you to top up or reload your card as needed. So going back to our store example, instead of using your debit card where that money would be pulled directly out of your Chime checking account, you can simply move money into your credit builder account, use that to make your purchase, and once you make your on-time payment Chime is then going to report that as an on time payment to the three major credit bureaus. Plus with the Safer Credit Builder feature enabled you’ll automatically pay your balance in full each month which can have a positive impact on your credit score since the most important variable when calculating your score is your on time payment history.

So if it wasn't already obvious, I personally think a secured credit card like the Chime secured credit builder Visa Credit Card is a great place for people to get started if they are brand new to building their credit and don't really care about earning cash back and rewards. If that is the case for you…how do you get started? Well in the case of Chime, it's super easy. Like I said you're going to load your credit builder account using funds from your Chime checking account so the first thing you'll want to do is go ahead and open a Chime checking account and once you've opened that account and receive a qualifying direct deposit of $200 or more, you are then eligible to apply for the Chime credit builder secured visa credit card.

0:00-Intro
0:32-Biggest Differences
2:33-Secured Credit Card Explained
3:55-Chime Credit Builder Explained
6:46-Who is This For?
7:55-My FINAL Thoughts

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