If you find it tough to open a bank account due to past financial hiccups, consider opting for a “second chance bank account.” These accounts cater to those hindered by previous banking or credit issues.
When you approach a bank to initiate an account, particularly a checking account, they’ll conduct a background check. This process resembles applying for car finance or a credit card but focuses on deposit accounts.
Generally, banks approve applications even if the applicant’s credit is weak. However, if your banking history reveals issues, like multiple overdrafts, returned checks, or closing an account with a negative balance, you might face challenges securing an account with a new bank.
These past mistakes might make other banks hesitant to offer you an account, fearing a repetition of such incidents. In these cases, a second chance bank account might be your answer.
Understanding Second Chance Bank Accounts:
Just as your credit history is reported to credit bureaus like Equifax, TransUnion, and Experian, banks use ChexSystems to keep track of your deposit account history. Negative marks on your ChexSystems report can make it tough to open a new bank account.
When opening an account, banks will refer to ChexSystems for your banking history. Negative entries can remain on your report for some time, complicating the account-opening process. This is where second chance bank accounts step in. Typically, these banks overlook the ChexSystems report.
If standard bank accounts are out of reach, second chance accounts are a great alternative. Without one, you’d be classified as “unbanked” or “under-banked”, pushing you towards pricier alternatives like check-cashing services or payday loans.
And if you’re currently without a bank account, there are cost-effective ways to cash checks.
A significant perk of second chance bank accounts is the opportunity they provide to better your ChexSystems QualiFile Score. With time and a good banking relationship, you can pave your way back to a conventional bank account.
Note: Clear any outstanding balances on old bank accounts as soon as feasible.
Top Nationwide Second Chance Bank Accounts:
Certain local banks and credit unions provide second chance bank accounts. But if you’re looking for nationwide access, here are some top contenders:
- MPH Fresh Checking: Tailored for those previously declined due to ChexSystems reports.
- Initial deposit: $0
- Monthly fee: $9
- Availability: Nationwide
- Chime: A digital financial service without ChexSystem checks.
- Initial deposit: $0
- Monthly fee: $0
- Availability: Nationwide
- LendingClub Bank Essential Checking: Upgrade to LendingClub Rewards Checking after 12 good banking months.
- Initial deposit: $10
- Monthly fee: $9
- Availability: Nationwide
- Wells Fargo Clear Access Banking: Aimed at those who require financial management aid.
- Initial deposit: $25
- Monthly fee: $5
- Availability: Nationwide
- GoBank Checking: A comprehensive checking solution without ChexSystems checks.
- Initial deposit: $0
- Monthly fee: $8.95 (waiver conditions apply)
- Availability: Nationwide
- Peoples Bank Cash Solutions Second Chance Checking: For those with credit issues, bankruptcy, or ChexSystems red flags.
- Initial deposit: $30
- Monthly fee: $4.95
- Availability: Nationwide
Why Opt for a Second Chance Bank Account?:
If you’ve been navigating without a mainstream checking account, a second chance bank account can be a game-changer. Beyond assisting you in rehabilitating your banking history, these accounts help you evade high costs associated with alternative banking options.
With a second chance account, you get most features of a regular account – a Visa or MasterCard debit card, check writing, online bill payments, fund transfers, and more.
Having a second chance bank account offers you more financial freedom. If you’ve been restricted due to past mistakes, it’s an opportunity for a fresh start. Consider the options listed here to streamline your finances and work towards securing a conventional bank account in the future.
