Banking

What is a Second Chance Checking Account and Where Can You Get One?

A checking account is an important tool to managing your finances but if you’re having trouble getting one, these are the tools you’ll need.

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I’ve had a checking account since college, and frankly, it’s hard to imagine living without one. For some people, however, getting approved for a traditional checking account is impossible. And that’s where a second chance checking account can help.

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Banks That Offer Second Chance Accounts

Listed below are financial service companies that currently offer checking accounts to those reported to ChexSystems.

  • Chime
  • LendingClub Bank
  • Netspend All-Access Account by MetaBank
  • BBVA

ChexSystems

Fresh start checking accounts, as they are sometimes called, are designed for customers who have been turned down for more traditional checking accounts. While it may surprise you, banks routinely turn down applications for checking and savings accounts. While this can happen for several reasons, it is common for those who have been reported to or are listed in a recognized consumer checking history database such as ChexSystems Inc. (ChexSystems).

If an account holder overdraws his or her account multiple times, bounces checks, commits identity theft or fraud, or stops using an overdrawn account without having covered the negative balance, the account is considered delinquent, and a file on the consumer is opened with ChexSystems. When this happens you may be banned from opening a checking account at any bank that is a member of ChexSystems for approximately 5 years. FIVE YEARS!

The ChexSystems network is made up of member financial institutions that report information on mishandled checking and savings accounts to a central location. ChexSystems then shares this information among its members so that they will be better equipped to determine what risk is involved in approving a particular consumer for a checking account. Financial institutions also rely on ChexSystems for credit information on customers. Unfortunately, each member bank’s parameters for reporting a consumer to ChexSystems are different; accordingly, there can be extremely high-risk consumers in the database and some who really should not be there.

In the United States, approximately 80% of all banks and credit unions participate in the ChexSystems program. Therefore, if a consumer has been reported to this database, it will be extremely difficult to open a new checking account unless the consumer can find a no credit check bank or open a second chance checking account. Virtually all second chance checking accounts have limits to the types of transactions that can be performed in such accounts. Such restrictions include the denial of a checkbook or, alternatively, the bank might only allow a consumer to use the debit card associated with his/her second chance checking account for debit transactions.

Related: Best No ChexSystems Banks

Second Chance Checking Accounts

The majority of the standard features, however, are included with second chance checking accounts such as ATM withdrawals, an ATM card with a VISA or MasterCard logo, online bill payments, money transfers, and direct deposit. Often, second chance checking accounts have higher annual or monthly maintenance fees or may require larger opening deposits. Some banks will refund maintenance fees if a consumer eventually establishes a good name at the financial institution.

The best way to open a second chance checking account is online through a lender that offers this service. Banks that do not use ChexSystems allow consumers to apply for a second chance checking accounts online and provide instant acceptance. Even banks that do use ChexSystems allow consumers to open a second chance checking accounts provided they have a copy of their ChexSystems report as proof of payment from their previous bank.

The idea behind a second chance checking account is that it provides a consumer who has no other alternative, a second chance at a bank account. Used properly, if the consumer remains in good standing with the bank and shows discipline, a second chance checking account can be used as a stepping stone to reinstating one’s good name, and opening a normal checking account in a six to twelve-month time frame.

As of late, several banks have relaxed the parameters by which they report consumers to ChexSystems, understanding that many consumers do not have sufficient knowledge to use their checking accounts properly, while other banks offer second chance checking accounts to anyone found in the ChexSystems database provided he/she has not committed a fraudulent act.

Best Second Chance Checking Accounts

Financial Service CompanyBest ForMinimum DepositFeesAvailability
ChimeInterest on savings and no fees$0NoneNationwide
BBVAUnlimited check writing services$25$13.95 per month7 states
LendingClub BankAutomatic upgrade to Rewards Checking$100$9 per monthNationwide
Netspend All-Access Account by MetaBankHigh yield on savings (up to 6%)$0$5 per monthNationwide

Chime

Consider an online checking and savings account with Chime. Chime offers a lot of the benefits a standard checking account will offer, including using Chime’s online checkbook to send checks for free! No monthly fees or service charges to worry about. Chime is 100% free outside of ATM fees if you land outside their network.

Chime also means getting a bunch of useful perks. For example, if you sign up for direct deposit, Chime will give you access to your paycheck up to 2 days early. You’ll also earn 0.50% APY on your savings, which is a much higher rate than the ones offered by most banks.

Read our Chime review to learn more.

Chime SpotMe® Disclosure - Eligibility requirements and overdraft limits apply. 

Chime Disclosure - 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.

1Chime cannot guarantee when files are sent by the IRS and funds can be made available.

^Early access to direct deposit funds depends on payer 

Chime APY Disclosure - 1The Annual Percentage Yield (“APY”) for the Chime Savings Account is variable and may change at any time. The disclosed APY is effective as of November 1, 2021. No minimum balance required. Must have $0.01 in savings to earn interest. 2The average national savings account interest rate of 0.06% is determined by FDIC as of November 1, 2021 based on a simple average of rates paid (uses annual percentage yield) by all insured depository institutions and branches for which data are available. Visit https://www.fdic.gov/regulations/resources/rates/ to learn more.

LendingClub Bank

LendingClub Bank offers the Essential Checking Account as its second-chance checking account option. The account charges an unavoidable $9 monthly fee.

Once you’ve had the account for 12 months, LendingClub Bank will review your account to see if you’re eligible for an automatic upgrade to a Rewards Checking account, which offers cash back on debit purchases, interest, and ATM fee rebates, all with no monthly fee.

LendingClub Bank is a solid choice for people who have a small business because it also offers a variety of small business banking and loan products.

For more information, check out our LendingClub Bank review.

Netspend All-Access Account by MetaBank

Netspend All-Access Account by MetaBank is a checking and savings account combo that gives you easy access to your cash and high-interest rates on your savings.

With the account, you can use your debit card to make purchases or fee-free withdrawals at MoneyPass ATMs. Eligible purchases will also earn cashback rewards. If you sign up for direct deposit, you’ll also get access to your funds up to two days before payday.

The savings account tied to the Netspend account offers up to 6% APY. This is much higher than the interest rates offered by most banks. However, the 6% APY only applies to the first $2,000 in the account.

There’s no minimum balance requirement to open the account but it comes with an unavoidable $5 fee.

BBVA

BBVA’s second chance checking account option is the BBVA Easy Checking account. This account aims to keep things simple, offering unlimited check writing privileges and rewards for using your debit card.

The account’s greatest drawback is its monthly fee. You’ll have to pay $13.95 each month to keep the account open. There are no ways to avoid the fee, so you’ll want to upgrade to an account with no fee or a way to waive the fee as soon as possible.

How We Came Up With the List

When it comes to second-chance checking accounts, the options are usually somewhat costly. We built this list by looking for the accounts with the best price and the best features. Things like high-yield savings options, debit card rewards, and the chance to upgrade to a less expensive account option are features that helped accounts make the cut.

More Alternatives

There is an alternative to second chance accounts - prepaid credit cards. These cards act like a checking account, many allowing you to pay bills online. And some of the better prepaid cards even offer a high-interest savings account. So if you are looking for an alternative, check out our list of free and low-cost prepaid cards.

FAQs

These are some of the most frequently asked questions about second chance checking accounts.

Do you have to get a second chance checking account if you have a bad ChexSystems report?

Having a bad ChexSystem report can make it difficult to open a checking account, but second chance accounts aren’t the only ones available. Some banks don’t check your ChexSystems report at all. Another good option is to try working with local credit unions. These institutions tend to be smaller and more community-focused, so you might be able to find a credit union that’s willing to work with you.

Does ChexSystems affect your credit?

Your ChexSystems report can affect your chances of opening a checking account, so it’s natural to worry that having a poor ChexSystems report and needing to open a second chance checking account could impact your credit. The good news is that your ChexSystems report and your credit report are separate, so the info that shows up on each won’t affect the other.

Summary

Second chance checking accounts give you the opportunity to get a checking account even if you have a bad ChexSystems report. While the accounts are usually expensive, you can use them to improve your ChexSystems report and graduate to an account with lower fees.


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