Updated March 20, 2021

Chime Review: Is It Good?

Read more about Chime
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Chime has no monthly fees, so what's the catch with the app? Find out how you can get paid two days early and grow your savings.

Chime

Overall Score

4.5

Savings

5.0

Checking

5.0

Customer Service

3.0

Mobile App

5.0
5-point scale (the higher, the better)

Pros and Cons

  • No account fees
  • Get paycheck 2 days early
  • Up to $100 overdraft coverage
  • Hard to deposit cash

Chime launched in 2014 as a mobile-only app with a free checking and savings account. Since then, it has continued to improve with excellent features like early direct deposit and free overdraft coverage.

Opening an account is free and only takes about two minutes.

Is it right for you? Read on to learn how it works

Overview: What is Chime?

Chime offers three main services:

  1. Spending account with a Visa debit card
  2. Savings account with a competitive APY
  3. Secured credit card to help you build credit

All accounts are free with no monthly service fees, no minimum balance requirements, and no opening deposit.

Chime is online and mobile-only. There are no physical branches, though it has a wide ATM network so withdrawing money is not a problem.

Also, unlike traditional banks, Chime does not check your credit or ChexSystems report when opening your account. So it's a great choice for those with bad credit or poor banking history.

Is Chime a bank? Chime is a financial technology company. It provides banking services through The Bancorp Bank or Stride Bank, N.A. These two banks hold your money and provide up to $250,000 FDIC insurance.

Who Chime is Best For

Chime may be right for you if:

  • You're looking for a simple checking account with no fees
  • You need help growing your savings
  • You're comfortable with only banking on your phone
  • You don't qualify for standard banking accounts

Chime Fees

As mentioned before, all Chime accounts are free. Chime has:

  • No monthly service fee
  • No minimum balance fee
  • No overdraft fees
  • No foreign transaction fee
  • No fees at 38,000+ MoneyPass and Visa® Plus Alliance ATMs
  • Free direct deposit
  • Free mobile check deposit

The only fees you may encounter are if you use an ATM out of the network, if you withdraw cash over-the-counter, or if you deposit cash with cash deposit partner.

How does Chime make money?
How is a completely free account possible? Chime makes money every time you use their Visa card. Visa pays them a small percentage of your purchase every time you swipe your card.

Now, let's go over some of Chime's great features.

Early Direct Deposit

If you set up paycheck direct deposit, you can get access to your funds up to two days early. That means if your usual payday is on Friday, you can get it on Wednesday.

Usually, when your employer submits your payment, banks hold it for a couple of days while they process it. But Chime makes it available as soon as the payment is received.

Everyone is eligible for this, as long as you set up direct deposit.

SpotMe Overdraft

Accidental overdrafts happen. Most traditional banks charge a $30-$35 overdraft fee when you go below zero. Banks make billions a year off of overdrafts.

Not only does Chime not charge overdraft fees, they even spot you for free. Chime will spot you up to $100 (or more if you qualify), and there's no interest. You just repay it when you make your next deposit.

If you try to make a purchase over your SpotMe limit, then the transaction will be declined.

You can be eligible to enroll if you get at least $500 in direct deposits every month. Your SpotMe limit depends on your account activity and history.

SpotMe only covers debit card purchases. It doesn't cover overdrafts from ATM withdrawals, Pay Friends transfers, ACH transfers, or Chime Checkbook transactions.

Chime Checkbook

Sometimes, you still need to send a paper check, like for rent or a loan payment. Chime doesn't give you a set of paper checks, but it will send checks for free on your behalf.

You can directly send a check in the mobile app without having to deal with stamps and the post office. Just use the CheckBook feature to fill out the recipient information and amount. Chime will mail the check for you.

Note that it can take between 3 and 9 days for the check to be processed and sent, so make sure you plan accordingly. The maximum amount you can send per check is $5,000.00.

Automatic Savings

When you open a Chime Spending Account, you also have the option to open a Chime Savings Account.

If you're the type to forget to save money, Chime's automatic savings features helps you put aside money without thinking. There are a couple of ways to automatically save:

  1. Round up Chime debit card purchases and bill payments and save the spare change
  2. Automatically transfer a percentage of every paycheck to your Savings Account

Putting your savings on auto-pilot helps reach your goals faster. According to Chime, members who used both savings options saved an average of $382 a month.[1]

Chime Secured Credit Card

Chime's newest offering is the Credit Builder Visa Secured Credit Card. There's no annual fee, no interest, and no credit check.

Here's how it works.

  1. Transfer money from your Chime Spending account to your Credit Builder secured card.
  2. The amount you transfer will become your spending limit. If you want more to spend, just transfer more.
  3. Use your card for daily things like purchases, eating out, and gas. At the end of each month, use the money in your secured account to pay off your balance.

Chime reports to all three major bureaus to help you build credit when you pay off your balance. You can turn on a Safer Credit Building feature to automatically pay on time each month.

On average, Chime secured card users increase their credit score by 30 points.[2]

To qualify for the secured card, you just need to have received direct deposits of $200 or more within the past 365 days into your Chime Spending Account.

How to Open an Account

When you sign up for a Chime account, you automatically get a "Spending Account" (or checking account, as most people know them). This account comes with a Chime Visa Debit Card for you to use at specific ATMs.

You also have the option to open a Savings Account at the same time. If you choose to wait, you can always open the savings account down the road.

Screenshot of Chime

Signing up for a Chime account requires the following information:

  • Name
  • Address
  • Social Security number
  • Birthdate

It takes just a couple of a minutes. Chime doesn't run a credit check or ChexSystems report. If you have past banking issues and can't open a regular banking account, Chime gives you a second chance to get back into the game.

How to Deposit Money

  • Direct deposit: You can set up direct deposit of your paychecks into your Chime account. You can even be eligible to receive your paychecks 2 days early.

  • Bank transfer from an external bank: If you use another bank, link the checking or savings account to your Chime account to transfer money between them. The funds may take up to 5 business days to be available for use.

  • Mobile check deposit: You can deposit a check with the mobile app by taking a photo.

  • Cash deposit partner: If you have cash to deposit, you can go to one of Chime's 90,000+ cash deposit partners. They're in popular stores like Walmart, Walgreens, and 7-Eleven. All you have to do is tell the cashier you want to make a deposit to your Chime account. They may charge a fee.

Transfer Limits: You can only transfer up to $200 per day from an external account, with a maximum of $1,000 per month.

For cash deposits, you can deposit up to $1,000 per day and $10,000 per month.

How to Spend or Withdraw Money

  • Visa debit card: Pay for purchases anywhere the Visa brand is accepted.

  • Free ATM withdrawals: If you need to take cash out, you get free access to 38,000+ MoneyPass and Visa Plus Alliance ATMs. You can find the ATM nearest you in the Chime app. They're usually in places like 7-Elevens, your local grocery stores, and banks.

  • Cash back at register: This is a convenient way to get cash back when making an in-store purchase with your debit card. Most places like grocery stores, gas stations, and drugstores let you do this.

  • Chime Checkbook: If you need to send a paper check, go into your app and fill in the check information. Chime will write and send the check for you for free.

Compare Savings Account Promotions

CIT Bank
Member FDIC

CIT Bank Savings Connect - 0.50% APY

  • Earn a competitive high yield savings rate with access and convenience features of an eChecking account.
  • Earn up to 0.50% APY on Savings Connect and 0.25% APY on eChecking.
  • Savings Connect is a tiered interest rate account dependent on the account holder opening a linked qualifying eChecking concurrently and makes periodic qualifying deposits.
    • Base Tier: (0.42% APY, 0.399% Interest Rate) A minimum qualifying deposit of $200 is not deposited each month into the linked eChecking or the eChecking account is closed.
    • Upper Tier: (0.50% APY, 0.499% Interest Rate) A qualifying deposit of $200 or more is deposited into the linked eChecking account each month.
    • APY assumes a qualifying deposit of $200 or more is made to the linked eChecking account each month.
  • Minimum of $100 for both the Savings Connect and eChecking to open ($200 total).
Discover Bank
Member FDIC

Online Savings Account - Earn 0.40% APY

  • No fees
  • No minimum opening deposit
  • No minimum balance required
Axos Bank
Member FDIC

High Yield Savings - 0.61% APY

  • 0.61% APY on all balance tiers
  • No minimum balance requirements
  • No fees to open or maintain account
  • Free ATM card upon request
  • FDIC Insured

App

You will need the Chime app in order to get the full benefit of this program. You can do the basic things, such as check your balance, pay a bill, or transfer money between Chime accounts. The app provides several other features as well:

  • Receive alerts: You can opt in to receive push notifications for transactions, daily balance updates, direct deposit payments, etc. You don't need to log into Chime to know your balance.

  • Mobile check deposits: Deposit a check from anywhere by snapping a photo.

  • Mobile payments: Chime supports Apple Pay, Google Pay, and Samsung Pay.

  • Pay bills or people: If you owe someone money, whether it's a business or a person, you can send it directly to them with the Chime app. If you pay a person and they don't have Chime, you can use Venmo to send the money.

  • Get help: You can find ATMs near you and contact customer service all from the app as well.

  • Lock card: If your card was lost or stolen, you can automatically put a freeze on it in the app to prevent fraudulent activity on your account.

Chime Downsides

While Chime has revolutionized mobile banking, there are some downsides to consider.

  • No joint accounts: At this time, Chime doesn't offer joint accounts or secondary cards. This could make it difficult if you have a partner that you share banking with, as only one of you can have a Visa Chime Card.

  • Hard to deposit cash: You have to go to one of Chime's cash deposit partners, and they could charge a small fee.

How Chime Compares

Varo Money
Varo is another free mobile bank with no monthly service fees. Just like Chime, it doesn't check your credit, so everyone is welcome to apply.

It has some similar features, like 2 days early direct deposit and a secured credit card. But instead of overdraft SpotMe, Varo offers up to $100 instant cash advance. You can borrow up to $100 for a small fee, and then pay it back within 30 days.

Varo uses the Allpoint ATM network. You get access to 55,000+ ATMs in places like Target, CVS, and Walgreens.

GoBank
GoBank (by Green Dot) is a mobile bank partnered with Walmart. Similar to Chime and Varo, it doesn't check your credit or ChexSystems. It also offers 2 days early direct deposit.

One advantage of GoBank is that you can deposit cash for free at your local Walmart. And if you need to take out cash, they have a large network of 42,000 fee-free ATMs.

It does have an $8.95 monthly fee, but it can be waived as long as you have $500 in direct deposits each month.

Ally Bank
Ally Bank is a full-service online bank. Besides banking products, it also offers investment services and loans.

The checking account is pretty bare-bones (no special features), but there's no minimum balance or monthly service fees.

You might also consider:

CIT Bank
Member FDIC

CIT Savings Builder - Earn 0.40% APY

Earn up to 0.40% APY. Here's how it works: Maintain a minimum balance of $25k OR make at least a $100 minimum deposit every month. Member FDIC

Ally Bank

Online Savings Account - 0.50% APY

$0 minimum opening deposit. No minimum balance requirement. No fees to open or maintain account.

High Yield Savings - 0.40% APY

$0 minimum opening deposit. No minimum balance requirement. No fees to open or maintain account.

Bottom Line

If you are looking for a simple way to manage money on the go and without high fees, Chime offers a secure option. It offers some unique features that banks don't have.

References

  1. ^ Chime, Does Automatic Saving Really Work?, Retrieved 3/20/2021
  2. ^ Chime Credit Builder, Retrieved 3/20/2021

Write to Kim P at feedback@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.

Note: This website is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content. You do not have to use our links, but you help support CreditDonkey if you do.

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