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Choosing a Secured Credit Card: Chime vs. Discover

A secured credit card can help you build positive credit history. Chime Credit Builder and Discover it offer two different paths to better credit.

Chime Team • July 19, 2022

In This Article

  1. What is a secured credit card
  2. Chime’s Secured Credit Builder Visa® Credit Card
  3. Discover it® Secured credit card
  4. Chime vs. Discover: What's the Best Secured Credit Card?
  5. The final verdict

Secured credit cards can give you purchasing power while helping you build credit. And a good credit score can pay off when you’re trying to buy a car, rent an apartment, or get a mortgage. 

So what’s the best secured credit card out there? 

Chime’s Secured Credit Builder Visa® Credit Card is one contender; the Discover it® Secured Credit Card is another. Both cards can help you establish and build (or rebuild) credit, but they aren’t the same in terms of the benefits and features they offer.

Chime Credit Builder is a smart way to start building credit¹ without maintenance fees, interest, or a credit check. 

Comparing Chime vs. Discover can help you decide which secured credit card is right for you.

What is a secured credit card

A secured credit card is a credit card that requires collateral to open. Collateral means a cash deposit. The amount of cash you’re required to deposit depends on the card; in most cases, it doubles as your credit limit. 

For example, if you open a secured credit card with a $200 initial deposit, you’d have a $200 credit limit. As you make purchases, your available credit shrinks. As you pay down the balance, your available credit increases. For many secured credit cards, even though you are borrowing against your own money, you still have to pay interest on the balance.

Whether your deposit is refundable can depend on the card. Some secured credit cards offer rewards or other incentives, but not all of them do. The interest rate and fees you pay can vary by card.  

Secured credit cards are designed for people who are building or rebuilding credit. Making timely payments can help you establish a positive payment history. In that sense, secured credit cards can be a stepping stone to unsecured cards and lines of credit. 

Learn more about how secured credit cards work

Chime’s Secured Credit Builder Visa® Credit Card

Chime’s Credit Builder Credit Card can help you build credit safely,¹ without the high fees that some credit cards charge. Chime reports account activity to all three credit bureaus, and members see an average increase of 30-points to their credit scores.²

Here are the key features of Credit Builder:

  • Cardholders pay no annual fee, no maintenance fees, and no foreign transaction fees. 
  • There are no interest charges on purchases made with the card. 
  • There’s no credit check to apply, which is helpful if you have low credit or a thin credit file.
  • Credit Builder doesn’t require a minimum security deposit³ – the money you move from your Checking Account into your Credit Builder secured account is the amount you can spend.

So, how does Chime Credit Builder work

As mentioned, there’s no credit check for this card. All you need is a Chime Checking Account and a $200 qualifying direct deposit to be eligible to apply. If you don’t have a Chime Checking Account yet, you can apply for one in under two minutes. 

Once your account is approved, you can move money from your Chime Checking Account to your Credit Builder secured account. The amount you transfer is the amount you can spend with your card. That means there’s no pre-set spending limit. 

You can use the Secured Credit Builder Credit Card anywhere Visa® is accepted. You can build credit with the card when you buy groceries, fill up on gas, or pick up dinner and make on-time payments.¹ You can see how much you’ve charged at any given time by logging in to the Chime mobile app. 

The money moved into your Credit Builder secured account is the amount you can spend. You can move money manually from your Chime Checking Account. However, it’s recommended to use the Move My Pay feature to automatically transfer a portion of your direct deposit to Credit Builder secured account for a more seamless experience. You can make purchases up to the amount moved, and that money will be set aside to pay your monthly balance. You can schedule payments manually or automatically with the Safer Credit Building¹ tool so you are never late for a payment. 

Chime Credit Builder pros and cons

Credit Builder can help make growing your credit scores easier¹. It does this through its unique combination of features and benefits. 

On the pro side, here are some of the top reasons to consider Chime Credit Builder:

  • Applying won’t affect your credit
  • You don’t need a security deposit to open an account
  • No interest and no fees save you money
  • You can start to build credit with all three major credit bureaus¹
  • You’re in control of how much you spend each month

If you’re wondering whether there are any cons or downsides, the answer is not really. Chime Credit Builder doesn’t offer a rewards program, but if building good credit history is your main priority, that may not matter much. 

Discover it® Secured credit card

The Discover it® Secured credit card is a more traditional secured credit card option. With this card, you’ll need to offer up a security deposit, but there’s no credit score required to apply. 

Here are the key features of the Discover it® Secured credit card:

  • You can get pre-approved without affecting your credit, and there’s no minimum credit score required.
  • A minimum security deposit of $200 is required to open an account, but this deposit is refundable.
  • Your account activity is reported to all three major credit bureaus to help you build a credit history. 
  • Cardmembers can earn cash back rewards on purchases. 

The Discover credit card helps people new to building credit and those hoping to rebuild credit. There is a credit check to apply, but you don’t need to have a credit score for approval. 

You’ll need a $200 deposit to open your account, and your credit limit equals that amount. It’s possible to qualify for a higher credit limit of $2,500, based on your income and ability to pay. After seven months, Discover will review your account history to decide whether to refund your deposit and transition you to an unsecured credit card. 

Discover doesn’t charge an annual fee for its secured credit card, but you will pay interest on purchases. The APR for the Discover it® Secured card is typical of other secured cards, which is to say it’s on the higher side. The best way to avoid interest charges is to pay your balance in full each month. 

Cardmembers can earn rewards on purchases. Here’s how the rewards program works:

  • Earn 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter
  • Earn 1% cash back on all other purchases automatically

Discover also offers an unlimited dollar-for-dollar match on all cash back earned during the first year of card membership. 

Discover it® Secured credit card pros and cons

The Discover it® Secured credit card could be a smart option if you’re interested in building credit and don’t mind putting up a security deposit. The rewards program adds to the card’s value. 

Here are some of the main pros of the Discover credit card:

  • Get pre-approved without affecting credit
  • No credit score required to apply
  • Pay no annual fee
  • Earn rewards on purchases
  • Get your deposit refunded with responsible use

In terms of the downsides, there are a few potential drawbacks. 

As mentioned, you’ll need at least $200 to open a Discover it® Secured credit card account. That could be a stumbling block if you don’t have an extra $200 to spare for the security deposit. 

Of course, you could request a higher credit limit if you can make a larger deposit. Once again, the maximum credit limit you can have with this card is $2,500. You could consider this a con, however, since some secured cards may allow a limit as high as $5,000. And with Chime, you can effectively set your own credit limit each month. 

Then there’s the regular variable APR that applies to purchases. If you aren’t diligent about paying your balance in full each month, then anything you charge could cost you more once the interest gets tacked on. It’s common to find secured cards that charge interest, but you don’t necessarily have to pay it when you have other options like Chime Credit Builder. 

Chime vs. Discover: What's the Best Secured Credit Card?

The best secured credit card for you is the one you can get approved for based on your credit history, and that offers the benefits or features you want. So when choosing between Chime vs. Discover, consider what you need in a secured credit card. 

Here’s a quick rundown of how the two cards compare. 

Chime’s Secured Credit Builder Visa® Credit CardDiscover it® Secured Credit Card⁵
Minimum DepositNone³$200
Initial Credit LimitDepends on how much you move from your Chime Checking Account$200, with a maximum limit of $2,500 based on income and ability to pay
Annual FeeNoneNone
APRNone23.74% variable, as of June 2022
Sign-Up BonusNoneNone, but Discover matches cash back earned within the first year of card membership
Minimum Credit Score to ApplyNone; no credit check is requiredNot specified, but a hard credit check is required
Other RequirementsApplicants need a Chime Checking Account and $200 qualifying direct depositNot specified, though Discover considers income and monthly housing payment when you apply
Foreign Transaction FeeNoneNone
Rewards ProgramNoYes
Helps Builds CreditYes, with reporting on-time payments to all three major credit bureausYes, with reporting to all three major credit bureaus

Chime’s Credit Builder Credit Card could be the best secured card option if you:

  • Are starting off with poor or no credit history and want to start to build a good credit score¹
  • Would prefer a secured credit card with no minimum security deposit requirement³
  • Want to avoid fees and interest charges as you build credit history
  • Aren’t necessarily interested in earning rewards on purchases
  • Would like control over how much you can spend, with no pre-set spending limit
  • Already have a Chime Checking Account or plan to open one

Chime attempts to remove some of the hurdles that can make building credit more challenging. The Credit Builder Secured Credit Card can also save you some of the headaches of building credit history since you can automate monthly payments,1 and you’ll never pay interest on purchases. 

So why would someone choose the Discover it® Secured credit card instead?

The best reason to opt for Discover might be the rewards program. Earning cash back on purchases is essentially the same as getting a discount on things you buy if you’re applying those rewards as a statement credit. 

But that assumes you’re maximizing your rewards value by paying your balance in full each month to avoid interest charges. Otherwise, the rewards you could earn with the Discover it® Secured card might be canceled out by the interest you pay.

The final verdict

Opening a secured credit card account can put you on the right track for building a solid credit history. Lenders consider your credit scores when applying for loans or lines of credit. Your credit score can also come into play if you’re trying to rent an apartment or even get hired for certain jobs. 

Chime’s Secured Credit Builder Credit Card can be a hassle-free way to help build credit without fees or interest.¹ Of course, you may want to take a closer look at the Discover it® Secured credit card to see how it aligns with your needs. The best secured credit card is the one you feel most comfortable using to grow your credit score. 

Already have a Chime Checking Account? All you need is a qualifying direct deposit to apply for Chime Credit Builder. See how Credit Builder compares to Capital One’s secured credit card.

Chime is a financial technology company, not a bank. Banking services and debit card provided by The Bancorp Bank or Stride Bank, N.A.; Members FDIC. Credit Builder card issued by Stride Bank, N.A.

While Chime doesn’t issue personal checkbooks to write checks, Chime Checkbook gives you the freedom to send checks to anyone, anytime, from anywhere. See your issuing bank’s Deposit Account Agreement for full Chime Checkbook details.

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Opinions, advice, services, or other information or content expressed or contributed here by customers, users, or others, are those of the respective author(s) or contributor(s) and do not necessarily state or reflect those of The Bancorp Bank and Stride Bank N.A. (“Banks”). Banks are not responsible for the accuracy of any content provided by author(s) or contributor(s).

1 On-time payment history can have a positive impact on your credit score. Late payment may negatively impact your credit score. Chime will report your activities to Transunion®, Experian®, and Equifax®. Impact on your credit may vary, as Credit scores are independently determined by credit bureaus based on a number of factors including the financial decisions you make with other financial services organizations.

2 Based on a representative study conducted by Experian®, members who made their first purchase with Credit Builder between June 2020 and October 2020 observed an average FICO® Score 8 increase of 30 points after approximately 8 months. On-time payment history can have a positive impact on your credit score. Late payment may negatively impact your credit score.

3 Money added to Credit Builder will be held in a secured account as collateral for your Credit Builder card, which means you can spend up to this amount on your card. This is money you can use to pay off your charges at the end of every month.

4 To be eligible to apply for Credit Builder, you need to have received a qualifying direct deposit of $200 or more to your Spending Account within the last 365 days of your application. The qualifying direct deposit must have been made by your employer, payroll provider, or benefits payer by Automated Clearing House (ACH) deposit. Bank ACH transfers, Pay Friends transfers, verification or trial deposits from financial institutions, peer to peer transfers from services such as PayPal, Cash App, or Venmo, mobile check deposits, and cash loads or deposits are not qualifying direct deposits.

5 Discover It® Secured Credit Card. https://www.discover.com/credit-cards/secured/

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