Second chance banking is available in all 50 states. It's a great option for people denied a bank account due to bad credit, Early Warning Services or ChexSystems.
According to the National Consumer Law Center, more than 80% of banks and credit unions use consumer reports from agencies like ChexSystems or Early Warning Services to approve or deny applicants. Banks that offer second chance checking accounts overlook past bank account mismanagement.
Benefits of second chance banking
If you're conducting financial transactions without a bank account, you can rebuild your banking history with second chance banking. Having a bank account can be taken for granted until you don’t have one.
The hassle of a check-cashing store, loading money onto a prepaid card, the fees; not to mention the lack of access to financial products like personal, mortgage, or auto loans can impede you from making major purchases.
Nationwide second chance banking choices
Chime Checking Account
Chime Checking Account is available online in ALL states. This account has many of the same functions as a traditional checking account, but it doesn’t come with paper checks. You can request checks to be mailed to a recipient, even yourself, for free. Chime also offers a high-yield savings account that earns a 2.00% APY.
Chime Checking Account Features
- No minimum opening deposit
- No Monthly Service Fee
- Get paid up to 2 days early with direct deposit²
- Mobile check deposits
- Overdraw fee-free up to $200 with Chime SpotMe
- Find 60,000+ fee-free1 ATMs at stores like Walgreens, 7-Eleven, CVS Pharmacy & more.
- Chime is a financial technology company, not a bank. Banking services provided by The Bancorp Bank or Stride Bank N.A.; Members FDIC
Chime Savings Account Features
- No minimum balance requirement
- No monthly service fee
- Customers can set up an automatic transfer from your checking account to a savings account
- Option to feature to save by rounding up every purchase to the nearest dollar
- Automatically transfer 10% of every paycheck to your savings
SoFi Bank Checking & Savings
The SoFi Bank Checking and Savings Account is not a second chance checking account but SoFi Bank only requires verification of identity along with a $50 opening deposit from a debit card to open an account. Plus, new members can earn a $25 welcome bonus if they open the account with a $50 deposit using a debit card or make an opening deposit of $10 by linking to an external bank account. Earn an additional bonus up to $250 if you set-up a qualifying direct deposit from an employer, payroll, retirement pension, or benefits provider.
SoFi Checking/Savings Account Features
- No monthly service fees
- Minimum opening deposit is $10 using an external bank account or $50 if using a debit card
- Interest earned with direct deposit is 4.20% APY on savings balances and 1.20% APY on checking balances
- 55,000+ fee-free ATMs.
- Get paid up to 2 days early with direct deposit.
- No-fee Overdraft Coverage with qualifying monthly direct deposit
- FDIC insured up to 2M
Go2bank Account
Go2Bank is a digital banking platform offered by Green Dot Corporation, a financial technology company. It provides a range of banking services and features accessible through a mobile app. Go2Bank aims to provide convenient and inclusive banking solutions to individuals who may have limited access to traditional banking services.
Go2Bank Account Features
- No monthly fees with eligible direct deposit, otherwise $5 per month¹
- No hidden fees²
- Overdraft protection up to $200, with opt-in and eligible directs³
- $0 Minimum deposit
- Get your pay up to 2 days early with direct deposit⁶
- Free nationwide ATM network⁷
- FDIC-insured up to $250,000
OneUnited Bank
OneUnited Bank is available online in ALL States plus they have branches in CA, FL, MA. The minimum opening deposit is $25. Customers enjoy second chance checking with free online & mobile banking, get cash surcharge-free at over 30,000 ATMs nationwide, deposit checks through the mobile app. Add cash to the OneUnited Bank Debit Card at over 90,000 locations across the country through a partnership with Green Dot. To get started go to the “Get the Card” button, enter your name, email address and cell phone number. Choose the Black Wall Street Checking account option along with the opening deposit, then complete your identification details (name, address, SSN, and employer).
U2-Checking Features
- $0 Monthly fees
- $25 Minimum opening deposit
- Obtain cash, surcharge free at over 37,000+ ATMs
- Up to 20% cash-back in different categories like food, hair products, hotels, cosmetics, home goods.
- Get paid up to two days earlier with direct deposit
- Cash advance feature called “CashPlease” that offers a short-term loan up to $1,000 without a credit check
- FDIC-insured
Consumers Credit Union
Consumers Credit Union (CCU) is a credit union located in Illinois that serves individuals across the United States. For people that live in Illinois, there are multiple branch locations across the state. Consumers Credit Union offers a range of financial products and services. These may include checking accounts, savings accounts, certificates of deposit (CDs), money market accounts, individual retirement accounts (IRAs), credit cards, personal loans, auto loans, home loans, and business banking solutions. They may also provide online banking and mobile banking options for convenient account management.
Consumers Credit Union Account Features
- Unlimited reimbursement for any and all ATM fees**
- Over 30,000 ATMs & over 5,000 shared branches
- Online & mobile banking plus bill pay
- Get paid as much as two days early with early direct deposit**
- No monthly maintenance fees, for anything
Regional second chance banking
American Airlines Credit Union
Ascend Checking available in AZ, CA, FL, IL, MA, NC, NJ, NY, OK, PA, TN, TX, TN and DC. Monthly service fee of $9.75 with direct deposit and $12.75 without direct deposit.
Appalachian Community Federal Credit Union
Fresh Start Checking available in KY, TN, VA. Minimum opening deposit is $20. Monthly service fee of $10.
Bank of the Ozarks
Pathyway Checking available in AL, AR, CA, FL, GA, NC, NY, SC, TX. Minimum opening balance is $50. Monthly service fee of $10. The checking account is a non-interest bearing account.
Centennial Bank
Opportunity 100 Checking available in AL, AR, FL, NY. Minimum opening balance is $100.00. Monthly service fee with direct deposit $9.95 and $12.95 with no direct deposit.
City National Bank
Bounce Back Checking available in KY, OH, VA, WV. No minimum balance. Monthly service fee of $6.99 with direct deposit and $8.99 without direct deposit. First two non-sufficient funds fees waived.
CommonWealth One Federal Credit Union
Second chance banking available in DC, MD, VA. Must be opened in a branch office.
Corporate America Family Credit Union
Fresh Start Checking available in AZ, CA, CT, GA, IL, KS, NC, OH, PA, TX, VA. Keep a minimum balance of $100 in your Regular Share Account. Monthly service fee of $10.
Farmers and Merchants State Bank
Clean Start Checking available in IN, MI, OH. Ideal account for rebuilding or establishing credit. Minimum opening balance is $50.00. Monthly service fee of $7.95 with direct deposit and $9.95 without direct deposit.
Fifth Third Bank
Express Banking available in FL, GA, IL, IN, KY, MI, NC, OH, TN, WV. No credit score requirement. Discounted fees of up to 50% on select services based on account usage. No check writing or check deposits at ATMs.
GenFed Financial
Clean Start Checking available in IL, IN, OH. Must have 3 or fewer records with ChexSystem. Plus no outstanding items less than 1 year old. Outstanding balance total of less than $500.
HomeStreet Bank
Bank on Checking account available in AZ, CA, HI, ID, OR, UT, WA. Minimum opening deposit is $50. This is a free account with no minimum account balance required, no monthly service charges and no per check charges.
Hope Credit Union
Easy checking account available in AR, LA, MS, TN. Minimum opening deposit is $25. The monthly service fee of $9.95 can be waived with $200 minimum balance.
InTouch Credit Union
Fresh Start Checking is available in MI, NV, TN, TX, VA. Membership must be established with a $5 deposit into a savings account. Minimum opening deposit for checking account is $50 deposit.
Landmark Bank
Rebound Banking available in MO, OK, TX. Monthly service fee of $9.99. If you keep your checking account in good standing for a full year after opening, you’re eligible to switch to another checking account.
MainSource Bank
Fresh Start Checking available in IL, IN, KY, OH. Monthly service fee of $10.
Park Community Credit Union
Fresh Start Checking available in IN, KY. No minimum balance. Monthly service fee of $12 and a required direct deposit.
PNC Bank
Foundation Checking is not publically advertised but available in AL, DC, DE, FL, GA, IL, IN, KY, MD, MI, MO, NC, NJ, NY, OH, PA, SC, VA, WI, WV.
Premier Bank
Start Fresh Checking is available in DC, MD, VA, WV. Minimum opening balance is $50.00. Monthly service fee of $7.95 with direct deposit and $9.95 without direct deposit. After 18 months, customers in good standing may qualify for a more favorable checking account at Premier Bank.
Republic Bank
Checking Builder is available in FL, IN, KY, OH, TN. Minimum opening balance is $50. Monthly service fee of $12.95 will be reduced to $7.95 with direct deposit or, at least 20 monthly point-of-sale debit card transactions.
Staley Credit Union
Renew Checking is available in IL, IN, TN. Minimum opening balance is $50. Monthly maintenance fee of $7.00.
Union Financial Credit Union
Right Start Checking is available in AL, AR, AZ, CA, CO, IN, KY, MI, MS, NJ, NV, TN, TX, UT, VA, WV. Open with a $25 deposit and no minimum balance requirement. No monthly fees plus overdraft protection up to $250.
Webster Bank
Opportunity Checking is available in CT, NY, RI. Minimum opening balance is $50.00. Monthly service fee of $11.95 with direct deposit and $16.95 without direct deposit.
Woodforest National Bank
Second chance banking is available in AL, FL, GA, KY, IL, IN, LA, MD, MS, NC, NY, OH, PA, SC, TX, VA, WV. Minimum opening balance is $25.00. Monthly service fee of $9.95 with direct deposit and $11.95 without direct deposit. One-time account set up fee of $9.95.
Second chance banking options in 50 States
Alabama
Alabama Credit Union: On-Track Checking
Avadian Credit Union: e-Checking
Azalea City Credit Union: Opportunity Draft
Community Bank & Trust: Second Slice Checking
Family Security Credit Union: Give Me a Break Checking
First National Bank: Credit Builder
Guardian Credit Union: Fresh Start Checking
Gulf Winds Federal Credit Union: MyOpportunity Checking
United Bank: Gateway Checking
West Alabama Bank: Fresh Start Checking
Alaska
True North Federal Credit Union: True Options Checking
Arizona
Alhambra Credit Union: Basic Checking
Bank of Arizona: Opportunity Banking
Banner Federal Credit Union: Opportunity Checking
Canyon State Credit Union: Try Again Checking
MariSol Federal Credit Union: Basic Checking
Pima Federal Credit Union: Fresh Start Checking
Tucson Federal Credit Union: Second Chance Checking
Tucson Old Pueblo Credit Union: Mission Checking
Arkansas
Bank of Arkansas: Opportunity Banking Diamond Bank: Encore Checking Focus Bank: Fresh Start Checking Red River Credit Union: Fresh Start Checking River Valley Community Federal Credit Union: Fresh Start Checking
California
Alliance Federal Credit Union: Fresh Start Checking
Alta Vista Credit Union: Opportunity Checking
American United Federal Credit Union: FreshStart Checking
Befit Financial Federal Credit Union: Fresh Start Checking
E-Central Credit Union: E-Builder Checking
Foothill Credit Union: Rebound Checking
Kern Federal Credit Union: Fresh Start Checking
Los Angeles Federal Credit Union: Second Chance Checking
North County Credit Union: Fresh Start Checking
Premier America Credit Union: Fresh Start Checking
Priority One Credit Union: New Leaf Checking
University Credit Union: Fresh Start Checking
Ventura County Credit Union: Second Chance Checking
OneUnited Bank: Second Chance Checking
Colorado
Colorado State Bank and Trust: Opportunity Banking
Liberty Savings Bank: Clean Slate Checking
NuVista Federal Credit Union: The Last Chance Checking
Connecticut
Eastern Savings Bank: Restart Checking
Finex Credit Union: Re-Start Checking
Hartford Federal Credit Union: 2nd Chance Checking
Tobacco Valley Teachers Federal Credit Union: myChance Checking
Delaware
WSFS Bank: Fresh Start Checking
District of Columbia
CommonWealth One Federal Credit Union: Second Chance Checking
Florida
Alabama Credit Union: On-Track Checking
Axiom Bank: Opportunity Checking
CenterState Bank: Fresh Start Checking
Central Credit Union of Florida: Fresh Start Checking
City County Employees Credit Union: Fresh Start Checking
Community First Credit Union: Fresh Start Checking
Compass Financial Federal Credit Union: Restart Checking
First American Bank: Fresh Start Checking
First Florida Credit Union: Smart Track Checking
Gold Coast Federal Credit Union: Fresh Start Checking
Gulf Winds Federal Credit Union: MyOpportunity Checking
Jax Federal Credit Union: Fresh Start Checking
JetStream Federal Credit Union: Second Chance Checking
Liberty Savings Bank: Clean Slate Checking
McCoy Federal Credit Union: Fresh Start Checking
Members First Credit Union of Florida: Second Chance Checking
Okaloosa County Teachers Federal Credit Union: Fresh Start Checking
One South Bank: Opportunity Checking
OneUnited Bank: Second Chance Checking
Priority Credit Union: Restart Checking
San Antonio Citizens Federal Credit Union: Second Chance Checking
South Florida Federal Credit Union: Another Chance Checking
United Bank: Gateway Checking
Georgia
Community Bank & Trust: Second Slice Checking
Doco Credit Union: Fresh Start Checking
Excel Federal Credit Union: Fresh Start Checking
Georgia United Credit Union: Restart Checking
Georgia’s Own Credit Union: Resolution Checking
Health Center Credit Union: Fresh Start Checking
Members United Credit Union: Another Chance Checking
Peach State Federal Credit Union: Fresh Start Checking
Hawaii
There were no second chance banking accounts found in Hawaii, however, you can open an online second chance checking account at One United Bank.
The U2 E-Checking requires a minimum opening deposit of $100. Another option is an online spending account that can be used as a second chance checking account at Chime.
Idaho
Latah Credit Union: Second Chance Checking
Illinois
Catholic & Community Credit Union: Rebound Checking
First American Bank: Fresh Start Checking
First Eagle Bank: Eagle Fresh Start Checking
First National Bank and Trust Company: Renew Checking
Marquette Bank: ReStart Checking
Prairieland Federal Credit Union: Not Your Normal Checking2
Indiana
Centra Credit Union: Opportunity Checking
Diamond Valley Federal Credit Union: Fresh Start Checking
Evansville Teachers Federal Credit Union: Opportunity Checking
Farmers & Merchants State Bank: Clean Start Checking
Heritage Federal Credit Union: 2nd Chance Checking
Horizon Bank: Fresh Start Checking
Interra Credit Union: Opportunity Checking
One Vision Federal Credit Union: Rising Star Checking
Park Community Credit Union: Fresh Start Checking
Regional Federal Credit Union: First Step Checking
Iowa
Collins Community Credit Union: Take2 Checking
Federation Bank: Fresh Start Checking
Greater Iowa Credit Union: Fresh Start Checking
North Iowa Community Credit Union: Fresh Start Debit
Kansas
Central National Bank: New Opportunity Checking
United Consumers Credit Union: Second Chance Checking
Kentucky
C-Plant Federal Credit Union: Second Chance Checking
The Cecilian Bank: Choice Opportunity Checking
Central Bank: Clean Start Checking
Evansville Teachers Federal Credit Union: Opportunity Checking
First United Bank and Trust Company: Fresh Start Checking
FNB Bank: Start Again Checking
Heritage Federal Credit Union: 2nd Chance Checking
Home Federal Bank: Square One Checking
Park Community Credit Union: Fresh Start Checking
Louisiana
Neighbors Federal Credit Union: Basic Checking
Pelican State Credit Union: Horizon Checking
Southwest Louisiana Credit Union: Fresh Start Checking
Maine
Five County Credit Union: 2nd Chance Checking
Maryland
Central Credit Union of Maryland: Renew Checking
Clear Mountain Bank: StartFresh Checking
Market USA Federal Credit Union: Fresh Start Checking
Security Plus Federal Credit Union: Revive Checking
Massachusetts
Alden Credit Union: No Boundaries Checking
Athol Credit Union: Fresh Start Checking
OneUnited Bank: Second Chance Checking
Washington Savings Bank: Online Rewards Checking
Michigan
Credit Union One: Basic Checking
Horizon Bank: Fresh Start Checking
Marshall Community Credit Union: Fresh Start Checking
Members First Credit Union: Fresh Start Checking
Michigan State University Federal Credit Union: Rebuild Checking
Minnesota
Minnesota Valley Federal Credit Union: Second Chance Checking
WESTconsin Credit Union: Foundations Checking
Mississippi
Citizens National Bank: Clean Slate Checking
Gulf Coast Community Credit Union: New Chance Checking
Magnolia Federal Credit Union: Opportunity Checking
MUNA Federal Credit Union: Fresh Start Checking
Missouri
Alliance Credit Union: FreshStart Checking
The Bank of Missouri: Select 2 Checking
Columbia Credit Union: Fresh Start Checking
Electro Savings Credit Union: Fresh Start Checking
First State Community Bank: New Opportunity Checking
Focus Bank: Fresh Start Checking
Health Care Family Credit Union: Fresh Start Checking
Mobank: Opportunity Banking
Montgomery Bank: Montgomery New Start Checking
St. Louis Community Credit Union: Second Chance Checking
Town & Country Bank: Opportunity Checking
United Consumers Credit Union: Second Chance Checking
United Credit Union: Restore Checking
Wood & Huston Bank: StartFresh Checking
Montana
Valley Federal Credit Union: Opportunity Checking
Nebraska
Central National Bank: New Opportunity Checking
Western Heritage Credit Union: Simple & Free Checking
Nevada
Clark County Credit Union: CheckAgain Checking
WestStar Credit Union: Fresh Start Checking
New Hampshire
There were no second chance banking accounts found in New Hampshire, however, you can open an online checking at Chime.
New Jersey
Credit Union of New Jersey: Right Turn Checking
Jersey Shore Federal Credit Union: Fresh Start Checking
United Teletech Financial Federal Credit Union: Fresh Start Checking
New Mexico
Bank of Albuquerque: Opportunity Banking
Lea County State Bank: Opportunity Checking
New York
Alternatives Federal Credit Union: Fresh Start Checking
Centra Credit Union: Opportunity Checking
Financial Trust Federal Credit Union: 2nd Chance Checking
Fulton Savings Bank: New Opportunity Checking
Genesee Valley Federal Credit Union: Fresh Start Checking
North Carolina
Alliance Federal Credit Union: Fresh Start Checking
American Partners Federal Credit Union: EZ 4U Checking
Charlotte Metro Credit Union: Fresh Start Checking
North Dakota
There were no second chance banking accounts found in North Dakota, however, you can open an online checking at Chime.
Ohio
Buckeye State Credit Union: Second Chance Checking
Eaton Family Credit Union, Inc.: 2nd Chance Checking
Farmers & Merchants State Bank: Clean Start Checking
Hopewell Federal Credit Union: Rebound Checking
Kemba Federal Credit Union: Fresh Start Checking
Members Trust Federal Credit Union: Trust and Alternative Checking
Sun Federal Credit Union
: Fresh Start Checking Superior Credit Union: Fresh Start Checking
Oklahoma
Allegiance Credit Union: Fresh Start Checking
Bank of Oklahoma: Opportunity Banking
Citizens Bank of Edmond: Fresh Start Checking
Oklahoma Educators Credit Union: Fresh Start Checking
TTCU Federal Credit Union: Fresh Start Checking
Weokie (Credit Union): Fresh Start Checking
Western Sun Federal Credit Union: Fresh Start Checking
Oregon
Point West Credit Union: Fresh Start Checking
Pennsylvania
Allegent Community Federal Credit Union: Fresh Start Checking
Sun Federal Credit Union: Fresh Start Checking
Utilities Employees Credit Union: Second Chance Checking
West Branch Valley Federal Credit Union: Back on Track Checking
WSFS Bank: Fresh Start Checking
Rhode Island
There were no second chance banking accounts found in Rhode Island, however, you can open an online checking at Chime.
South Carolina
Caro Smart Financial Solutions: Rebound Checking
Carolina Trust Federal Credit Union: Encore Checking
HopeSouth Credit Union: Fresh Start Checking
Market USA Federal Credit Union: Fresh Start Checking
Peach State Federal Credit Union: Fresh Start Checking
Vital Federal Credit Union: Fresh Start Checking
South Dakota
There were no second chance banking accounts found in South Dakota, however, you can open an online checking at Chime.
Tennessee
First National Bank: Credit Builder
Greater Eastern Credit Union: Fresh Start Checking
Holston Methodist Federal Credit Union: Second Chance Checking
Home Federal Bank: Square One Checking
Select Seven Credit Union: Second Chance Shardraft
Texas
Abilene Teachers Federal Credit Union: Restart Checking
Air Force Federal Credit Union: Fresh Start Checking
Allied Federal Credit Union: Fresh Start Checking
Associated Credit Union of Texas: 180 Checking
Bank of Texas: Opportunity Banking
Baptist Credit Union: Draft Builder Checking
Chocolate Bayou Credit Union: Clean Slate Checking
Diamond Bank: Encore Checking
First Service Credit Union: Fresh Start Checking
Houston Metropolitan Federal Credit Union: Freedom-2nd Chance Checking
Kelly Community Federal Credit Union: Smart Choice Checking
Las Colinas Federal Credit Union: 2nd Chance Checking
MemberSource Credit Union: Select Checking
Members Trust Federal Credit Union: Second Chance Checking
Memorial Credit Union: New Path Checking
Nascoga Federal Credit Union: Fresh Start Checking
Neigborhood Credit Union: Fresh Start Checking
North East Texas Credit Union: Fresh Start Checking
Peoples Bank: Second Chance Checking
Premier America Credit Union: Fresh Start Checking
Prestige Community Credit Union: Fresh Start Checking
Red River Credit Union: Fresh Start Checking
Rio Bank: Fresh Start Checking
Select Federal Credit Union: Fresh Start Checking
Southside Bank: Next Checking
Tarrant County’s Credit Union: Fresh Start Checking
United Heritage Credit Union: Choice Checking
Unity One Credit Union: Clean Start Checking
Velocity Credit Union: Access Checking
Utah
American United Federal Credit Union: FreshStart Checking
Cyprus Credit Union: Fresh Start Checking
Vermont
There were no second chance banking accounts found in Vermont, however, you can open an online checking at Chime.
Virginia
Central Virginia Federal Credit Union: Fresh Start Checking
CommonWealth One Federal Credit Union: Second Chance Checking
Healthcare Systems Federal Credit Union: Renew Checking
Member One Federal Credit Union: Smart Choice Checking
PortAlliance Federal Credit Union: Smart Choice Checking
Washington
MountainCrest Credit Union: Fresh Start Checking
West Virginia
Clear Mountain Bank: StartFresh Checking
West Virginia Federal Credit Union: Fresh Start Checking
Wisconsin
Brewery Credit Union: Fresh Start Checking
Dane County Credit Union: Relationship Builder Checking
Educators Credit Union: Fresh Start Checking
First National Bank and Trust Company: Renew Checking
Schneider Community Credit Union: Fresh Start Checking
Tomahawk Community Bank: Fresh Start Checking
WESTconsin Credit Union: Foundations Checking
Wyoming
Greater Wyoming Federal Credit Union: Freshstart Checking
WyHy Federal Credit Union: Second Chance Checking
WYO Central Federal Credit Union: 2nd Chance Checking
Valley Federal Credit Union: Opportunity Checking
Rebuild your banking history with second chance banking
ChexSystems maintains negative banking history for 5 years while EWS, Telecheck, and credit bureaus keep negative information for 7 years. Mistakes happen. You deserve a second chance at banking to get a fresh start. The banking industry varies when it comes to second chance banking accounts. Second chance banking accounts may come with more limitations than standard checking accounts. Second chance banking accounts are specifically designed for people who have struggled with a checking account in the past but want to get back into banking. Some banks and credit unions offer second chance banking with limited or no check writing privileges while other financial institutions allow most features of a regular checking account but tack on a monthly fee. Another option for people denied a checking account is to find non ChexSystems banks that don't use ChexSystems to open checking accounts. Second chance banking might include pulling a ChexSystems report but the bank doesn't hold past mistakes against you.
Save time and money with second chance banking
The Center for Financial Services Innovation (CFSI) conducted a one-day simulation as to what unbanked people may encounter when trying to conduct basic financial transactions like cash a check, pay rent and utilities. The group included entrepreneurs, nonprofit employees, and banking executives. They found that a huge chunk of time was utilized waiting in lines at check-cashing stores to cash checks, load prepaid cards, purchase money orders, and complete money transfers.
In one encounter, the group “ended up waiting for nearly half an hour while the check cashing store decided it couldn’t cash one of the checks.” In addition to the time consumed the group found that conducting financial transactions at check-cashing stores and Western Union is costly. A $30 money transfer at Western Union cost $5.
Avoid negative banking habits
Once your new account is open, avoid habits that contribute to a negative banking history. With online banking tools, you can always pay attention to checking account balances, keep track of all transactions to avoid overdrafts, and monitor your bank accounts. Participation in a financial management workshop, often online for 60-90 minutes, might be required by some banks and credit unions prior to opening a second chance banking account. These workshops offer good tips on managing a checking account and avoiding actions that can get you in trouble.
Run from second and third-party checks
NEVER, EVER deposit a third-party personal check via ATM or mobile deposit. A 3rd-party check is when a friend or family member endorses a check over to you to cash or deposit. Banks typically don't like 3rd party checks because of the risk associated. If a bank accepts 3rd party checks, they may require both you and the original payee to sign the check in the presence of a teller. You may even want to be wary of a 2nd-party check from a friend or family member. A 2nd-party check is one written directly to you. Many consumers have innocently deposited a personal check from a friend or family member that ended up as a bounced check. Banks often see these types of transactions as fraud. And for a bank, fraud is similar to bank robbery. Being reported by a bank for fraud is one of the WORST notations on ChexSystems and Early Warning Services, even if it was unintended.
Second Chance Checking has Pros and Cons
Pros of a second chance checking account:
- Restore a good standing banking history. A second chance checking account helps you rebuild your banking history, but you still need to practice good money management.
- Avoid excessive financial fees. Prepaid debit cards, money orders, cashier's checks, and check cashing services have one thing in common, FEES! Some Second chance checking accounts may have a monthly service but it will be insignificant compared to the above-mentioned alternative banking services.
- Reestablish your banking relationship. A good banking relationship can open opportunties for future financial products like a mortgage, car, business or student loan at competitive interest rates. Opening a second chance account is the first step in rebuilding your relationship with the bank.
Cons of a second chance checking account:
- Monthly maintenance fees. Many second chance checking accounts come with monthly maintenance fees. Over time, these can add up. While you might be able to avoid monthly service fees in some cases, most second chance banks will only waive these charges if you maintain a certain balance or set up a specific number of direct deposits.
- Lack of overdraft protection. Most second chance checking account do not offer overdraft protection. Chime is one of the rare banks that will spot you up to $100 on debit card purchases with no overdraft fees.
- Won't rebuild credit. Banks do not report good banking habits to the credit bureaus so while a second chance checking account will do wonders for establishing a banking relationship, the account will not do anything to help repair bad credit. If you have bad credit, you'll need to take separate steps to improve it.
Challenge Mistakes with ChexSystems or EWS
Just like creditors report inaccurate information to credit bureaus, banks and credit unions make mistakes too. Challenge errors and inaccurate information reported to ChexSystems and EWS if you think you should have a clean record. Order your ChexSystems and EWS report for free, once every 12 months. If you’ve been denied a bank account within the last 60-days you are entitled to a free report. Otherwise, there may be a fee.
Final thoughts
When a shaky banking record prevents you from traditional banking, you can't go wrong with banks that offer second chance checking accounts, even if a monthly fee is required. Take comfort in knowing there are tools to help you restore your banking privileges and, if you have to pay a monthly fee, it will not last forever. Start enjoying all the benefits and conveniences of banking again.
