If youâve seen ads for Chime but canât recall ever coming across a physical location, your hunch would be correct.
Chime isnât actually a bank, but a startup that offers banking services completely online. Still, customers can rest assured their funds are safe with Chime, as deposits are backed by its FDIC-insured partners, the Bancorp Bank and Stride Bank. That means funds up to $250,000 are covered if the bank fails.
If you canât even remember the last time you set foot in one of your current bankâs branchesâeven before the coronavirus pandemic turned our everyday lives upside downâyet youâre still paying maintenance and other types of fees, Chime might be a convenient option for you to manage your money.
And with a brand-new product on the market, thereâs another reason to consider doing business with Chime, especially if youâve had trouble getting approved for credit in the past. With its 0% APR secured card, thereâs no minimum deposit, and the company doesnât check your score.
Intrigued? Read on to find out if Chime is right for you.
What are Chimeâs online banking terms?
The fine print is subject to change, but as of publication, here are the fees, rates, and other terms you should know about if you open an account:
- Minimum balance required to open: None
- Monthly fee: None
- Overdraft fee: The SpotMe feature applies to overdrawn debit transactions between $20 and $100, with a few eligibility requirements discussed below.
- ATM fees: None at MoneyPass and Visa Plus Alliance ATMs; $2.50 at out-of-network ATMs
- Foreign transaction fee: None
- Checking account APY: N/A
- High-yield savings APY: 0.5%
- Learn more about Chime
Who should consider using Chime?
If youâre generally savvy when it comes to mobile and online banking and canât even remember the last time you set foot in one of your current bankâs in-person branches, Chime just might be for you. Same goes for anyone whoâs sick of paying fee after fee with their current bank.
Keep in mind: You need to be at least 18 years old and a U.S. citizen. To use the mobile app, you’ll need an iPhone or iPad running iOS 11.0 or greater, or an Android device running OS 5.0 Lollipop or greater.
What types of products does Chime offer?
Chime currently offers two accounts, and a secured credit card. Here are the need-to-know details:
Spending account: This is the bankâs default account thatâs required to become a member. It comes with a debit card with access to over 38,000 fee-free ATMs across the U.S., though you can also combine your debit card with Apple Pay and Google Pay to leave your wallet at home. Thereâs no minimum deposit required to open it, and the account also doesnât have any monthly maintenance, overdraft, or foreign transaction feesâa plus if you plan on resuming your frequent travels following the coronavirus pandemic.
High-yield savings account: With this optional account, customers can earn a small amount of interest on their savingsâtypically higher than the average national rate. Like the checking account, there are no fees or minimum balance requirements, in addition to no limit on how much interest you can earn.
Credit Builder: A newer offering, this secured credit card stays true to the company’s no-fee philosophy. It lacks an annual fee, foreign transaction fees, late payment fees, and comes with zero interest. Plus, there’s no minimum security deposit requiredâyou set your own credit limit.
What fees does Chime charge?
In todayâs day and age, most banks are loaded with hidden fees, but worry not: Chime isnât one of them. As mentioned earlier, customers donât need to hand over additional funds for opening an account, maintenance, and foreign transaction fees donât apply either.
There’s no fee for replacing a lost or stolen card, though you will need to hand over $20 if you’d like to expedite your request for a new Credit Builder card.
And while you can avoid fees by withdrawing cash at a MoneyPass or Visa Plus Alliance ATM, you may be subject to an out-of-network ATMâs fees. The good news is you can track down nearby locations in the mobile app.
What about overdraft fees?
The checking account’s overdraft feature is known as SpotMe. If you overdraw your account up to $100, Chime will apply your next deposit toward your negative balance, while typical banks may decline the transaction and tack on a charge of $30 or more.
There are a couple of important details in the fine print:
- You must have monthly direct deposits of at least $500 to be eligible, whether from your employer or through government benefits.
- Chime often markets the amount up to $100, though it sets limits for individual users starting at $20, and that number can change at any time. You may have a higher limit depending on your spending activity and direct deposit history.
- This feature only applies to debit card transactions. ATM withdrawals, checks, transfers to friends, and ACH transfers (including when you use Venmo) don’t fall under this category.
How can Chime help you manage your money?
Chime was created with mobile banking in mind. Whether youâre using an iPhone or Android device, the user-friendly app allows you to do everything from deposit checks to pay bills. You can get real-time notifications every time you swipe your card or send money to friends or family. They don’t have to be fellow users; you just need their phone number or email address to make good on your IOUs.
If you need to write a check, the app can do that, too. The company will send one on your behalf after you make the request. Take note that it can take up to nine days for it to get where it needs to go.
Looking to grow your emergency fund? Every time you make a purchase, Chime rounds up the transaction to the nearest dollar, and transfers the difference to your savings account. You can also automatically transfer a portion of your paycheck every time you get paid. Additionally, if you get your paycheck via direct deposit, you can have access to it up to two days early.
What’s the deal with Chime’s Credit Builder?
If you want to get your hands on this secured credit card, youâll need to be a Chime customer and have a direct payroll deposit within the past 45 days thatâs at least $200.
Unlike many traditional secured cards, this one does not require a credit check or a minimum deposit. You choose how much youâd like to put into the account (up to $10,000), and, notably, these funds can be used to pay your bill at the end of the month. With most secured cards, you typically don’t receive the deposit back until you prove responsible use or close your account.
You choose how much youâd like to put into the account, and, notably, these funds can be used to pay your bill at the end of the month.
Having this in your wallet can help you build your credit history. The company has a feature to automatically pay your statementâs entire balance every month, so youâll never be late for a payment, which is reported to the major credit bureaus.
Perhaps the biggest bonus: Because there is no predetermined credit limit, Chime does not report your utilization ratio. With this in mind, you donât have to be as mindful of maxing out the account as you would with other secured and unsecured cards.
What security and protection does Chime offer?
In addition to being FDIC-insured through its partners, the app allows you to block debit card transactions if your card is lost or stolen. You can also set up instant transaction alerts so that youâre notified if it does get used while not in your possession.
Whatâs Chimeâs customer service like?
Members can reach Chime representatives by emailing email@example.com, or calling 844-244-6363 Monday through Saturday from 7 a.m. to 7 p.m. CST and Sunday from 9 a.m. to 5 p.m. CST.
The website also has a fleshed-out help section that you can search for answers to frequently asked questions. When it comes to changing personal information, members can easily make updates on the website or via the app.
How does Chime stack up to other banks?
The current national average for savings accounts is 0.04% APY, which Chime handily beats at 0.5%. If you want the best available rate, however, youâll likely want to shop around. For example, you have the potential to earn more than double that as a Varo customer. And those looking for a joint account to share with a partner will have to look elsewhere.
Where Chime may shine the most is its secured credit card, an option you won’t find at many other online banks, not to mention more flexible terms than you find at traditional credit card issuers.
What drawbacks does Chime have?
Next to other banks, particularly big-name ones, Chimeâs account offerings are pretty limited. You wonât find certificates of deposit, retirement account options, or any mortgage or auto loan options hereâat least at this very moment anyway.
But if itâs not a must for you to have all of those accounts in the same place (especially if youâre on the hunt for the best rates on each one), then this shouldnât deter you from choosing these accounts for your basic banking needs.
If you frequently deposit cash, you’ll have to consider how much of a hassle and cost it would be to you. With Chime, customers have to visit CVS, Walmart, and other locations that use GreenDot. And while Chime itself does not charge a fee, the retailers may impose one of their own.
So, should you open a Chime account?
If youâre fairly tech-savvy and are looking for basic checking and savings accounts to park your cash with easy access, then this mobile-first option may be for you. You really canât beat the convenience of the ability to do just about everything online, with no hidden fees to boot. As for those looking to bulk up their credit history, its relatively new secured credit card is worth a hard look.