The news: Chime debuted the Chime Card, a secured credit card with no fees or interest.

• Cardholders can receive 1.5% cash back in rotating categories for groceries, gas, restaurants, and utility bills after placing a qualifying deposit of $200 or more into a Chime checking account.
• The Chime Card temporarily locks itself for cardholders who fail to pay their statement balances on time until payment is made.

Why this matters: Chime’s latest secured card appeals to US adults with poor or limited credit histories who want to build positive credit. 

With the entry-level secured card, users are limited by their security deposit size. 

However, the rest of Chime Card’s features nip many potential applicants’ misgivings about secured cards in the bud.

Combating anxieties: 32.7% of consumers believe not having a credit card helps them spend within their means, and 32.3% believe interest/annual fees on secured cards are too high, per a PYMNTS survey fielded in April 2024. 

• Chime’s card has zero fees of any kind—annual, maintenance, international, or late fees—eliminating that concern. 
• The self-pausing feature for unpaid statement balances also encourages on-budget behavior that some consumers struggle with when using a credit card.

Payment fusion: The Chime Card blends recent payment trends into one product by swirling the rewards of a traditional credit card with the payment structure of a buy now, pay later (BNPL) installment plan—blending the most desirable aspects of each finance style into one card.

Our take: With zero fees or interest, Chime’s ability to make a profit on this card is fairly limited. 

However, drawing more consumers from underbanked or underprivileged backgrounds into its ecosystem with enticing features could help build loyalty to eventually graduate cardholders to more traditional and profitable financial products as their credit histories improve and mature.

This content is part of EMARKETER’s subscription Briefings, where we pair daily updates with data and analysis from forecasts and research reports. Our Briefings prepare you to start your day informed, to provide critical insights in an important meeting, and to understand the context of what’s happening in your industry. Non-clients can click here to get a demo of our full platform and coverage.