Second Chance Banks: Rebuild Your Banking History | [Year]

If you’ve ever found yourself unable to open a bank account due to a poor ChexSystems or Early Warning Services report, you may want to look into a second chance bank. Second chance banking accounts are designed to give people with bad credit, a ChexSystems, or EWS record a second chance.

This gives consumers who have a rocky banking history an opportunity to start over and prove that they can manage their accounts responsibly. But, of course, some banks and credit unions offer better terms than others, so we’ve done the research to find the best options available for you.

Best Second Chance Banking Options

If you have a checkered banking history, then trying out a second chance bank will be your best option going forward. Fortunately, there are second chance banks located all across the country. Here are the top banks and credit unions for you to consider. If you don’t find one you like, we also have over 225 regional banks and credit unions listed below.

1. Chime

Chime is an online-only banking option with no minimum opening deposit and zero fees. Account-holders also get access to over 60,000 fee-free ATMs at convenient locations like Walgreens, 7-Eleven, CVS, and more with your Visa debit card.

Chime also offers a high-yield savings account that earns an APY^[1] of 1.50%. The Chime Savings Account has a much higher rate than what most traditional banks offer. In addition, Chime banking services are provided by The Bancorp Bank or Stride Bank, N.A. Member FDIC, so your money is safe and insured.

You can also get your paycheck up to two days early with direct deposit.

2. Chase

Chase is one of the most popular banks in the U.S. And now, they offer an account called Chase Secure Banking with no credit check, no ChexSystems, and no overdraft fees.

Account holders also get access to over 16,000 fee-free ATMs, free online bill pay, and free money orders and cashier’s checks. With 4,700 locations across the country, this is an excellent option for anyone who prefers having access to physical branches.

Opening a Chase Secure Banking account comes with a $100 cash bonus when you use the card for 10 purchases within 60 days. Account approval is immediate and you’ll receive your debit card within days. There is a small monthly service fee of $4.95; however, there is no minimum opening deposit to get started.

3. Aspiration

With the Aspiration Spend & Save account, you can earn up to 5% APY, plus you get unlimited fee-free withdrawals at over 55,000 ATMs. The minimum opening deposit is $10. Deposits are FDIC insured and you can get paid up to two days early.

The Aspiration debit card is made from recycled plastic. Deposits are 100% fossil fuel-free. And they even give you the option to plant a tree with every card swipe.

4. Current

Current is one of the fastest-growing mobile banking solutions in the U.S., with over one million members. However, Current is a financial technology company, not a bank. Most importantly, Current does not use ChexSystems or pull your credit report.

Some features of the Current mobile bank account include fee-free overdraft protection of up to $100, 40,000 fee-free Allpoint ATMs, and no minimum opening deposit or hidden fees.

You can get paid up to two days early with direct deposit. And you earn up to 15x points and cashback when you use your Visa debit card at participating merchants.

5. Sable

Sable claims to be the “The world’s fastest, most premium path to financial freedom.”

You can open a bank account and get a debit card and secured credit card in 5 minutes. That is pretty fast.

With a Sable account, there are no fees, no credit check, and no minimum deposit required. On top of that, you can get an unsecured credit card in about 4 months. That’s 3x faster than what traditional banks offer.

And the Sable credit card offers 2% cashback on your favorite brands.

Another unique feature is that you don’t need a social security number or U.S. credit history. Plus, you can send money to 55+ countries and get multilingual customer support.

6. Upgrade

The Upgrade Rewards Checking account has no monthly fees, no ATM fees, and no transfer fees. Plus, you’ll get up to 2% cash back on everyday debit card purchases. If you use an out-of-network ATM, Upgrade will give you a rebate on up to five ATM fees per month if you meet certain conditions.

Upgrade has a bank partnership with Cross River Bank, Member FDIC. Your funds are FDIC-insured up to $250,000. You can also get up to 20% lower rate on Upgrade loans and credit cards.

7. Axos Bank

Axos Bank is an online bank that offers no monthly maintenance fees, full reimbursement for fees incurred while using any ATM in the US, and some pretty competitive cash back rewards.

Axos has zero overdraft fees for people who spend more than what is in their checking account.

If you are looking for a checking account with no fees, Axos Bank is a strong choice.

8. Albert

With Albert, there is no minimum deposit requirement to open an account. All funds are insured up to $250,000 through federally backed FDIC protection.

You get a free Mastercard debit card that you can earn cashback rewards with. Got a question related to personal finances? Use Albert’s ‘Ask a Genius’ feature on their app, which is available 24/7.

9. TD Ameritrade

TD Ameritrade offers a brokerage account with a comprehensive cash management checking account. As a client, you get unlimited check writing. Once you open the brokerage account, you can complete the checking account application online.

A Cash Management account also gives you access to free online bill pay, as well as a free debit card with nationwide rebates on all ATM fees. In addition, there are no monthly fees if you maintain a $100 minimum daily balance. However, it’s important to note that a TD Ameritrade checking account is not FDIC-insured or bank guaranteed.

10. Woodforest National Bank

Woodforest National Bank has over 700 branches in 17 states across the U.S. You can open a second chance checking account with $25 and a one-time account set up fee of $9.95. If you set up a direct deposit, they will reduce the monthly fee to $9.95.

11. LendingClub

LendingClub, formerly Radius Bank, is an excellent online bank due to its high interest rates and mobile banking app. The lender offers a no-fee checking account and a high-yield savings account. It’s available in all 50 states, and you can open a new account online with just $10.

12. Capital One 360

Capital One 360 offers a convenient online checking account with mobile banking and a free debit card. You don’t need any money to open the account, and there are no monthly fees.

If you need to send cash to friends or family, you can use the Zelle app. And you’ll gain access to over 70,000 ATMs located across the country.

13. Fifth Third Bank

Fifth Third Bank offers a wide variety of checking accounts, including Express Banking. There are no credit requirements to open the checking account, and you can receive discounted fees of up to 50% on certain services. However, you can’t write checks or deposit a check at ATMs.

14. Axiom Bank

Axiom Bank’s Opportunity Checking offers a second chance bank account that comes with unlimited check writing, no minimum balance, online bill pay, and no-fee mobile banking and mobile deposit.

They have several locations throughout central Florida. However, the checking account is available to customers in all 50 states.

15. Bok Financial

Headquartered in Tulsa, OK, Bok Financial has branches in AZ, AR, CO, KS, MO, NM, OK, and TX. They offer Opportunity Banking, a second chance checking account designed to give you a fresh start from past financial challenges.

There’s a $10 monthly service fee or $5 monthly service fee with a qualifying direct deposit of regular monthly income of at least $300 per statement cycle deposited to your account. In addition, a checking account with BOK gives you free access to more than 32,000 MoneyPass ATMs nationwide.

16. Bank OZK

When you open a second chance checking account with Bank of the Ozarks, you’ll receive a debit card and access to mobile and online banking. You can open a Pathway Checking account with $50, and there’s no monthly minimum balance. However, this checking account is a non-interest bearing account. Bank OZK has branch locations in AL, AR, FL, GA, NC, NY, SC, and TX.

17. Memory Bank

You can open a new checking account at Memory Bank with just $50 to get started. This second chance checking account comes with an $8.95 monthly fee, but you can reduce it to $6.95 by meeting certain criteria. In addition, Memory Bank gives its customers access to over 85,000 free ATMs and a free mobile app.

18. Farmers and Merchants State Bank

Farmers and Merchants State Bank offers a Pure Checking account that is a great option for anyone trying to rebuild their banking history. There’s a $6.95 monthly fee, but you can get it waived by meeting certain criteria. There’s no minimum monthly balance, and you’ll receive free mobile and online banking.

19. American Airlines Credit Union

American Airlines Credit Union offers various checking and savings accounts, including their Ascend Checking. These bank accounts are a good option for anyone looking to rebuild their banking history.

And if you sign up now, you’ll be eligible for a promotion the credit union is offering. You could earn $100 for meeting certain requirements.

20. Wells Fargo

The Wells Fargo Clear Access Banking account is a great option for customers that don’t qualify for a traditional checking account. It’s designed for college students and individuals that maintain lower bank account balances.

Account holders will receive access to the Wells Fargo mobile app and online banking, so you can monitor your balance. Wells Fargo will refund any unauthorized transactions if you contact the bank immediately.

You’ll need $25 to open the account, and there is a monthly service charge of $10. However, you can avoid the monthly service charge in one of the following ways:

1. Maintaining a $500 minimum daily balance
2. Have $500 or more in direct deposits
3. You’re between the ages of 17 and 24
4. You have a linked Wells Fargo Campus ATM or Campus Debit Card

21. OneUnited Bank

You can open an account at OneUnited Bank with just $50, and you’ll gain access to free mobile and online banking. In addition, you can deposit checks and view your balance through the mobile app.

The OneUnited Bank checking account is available to customers in all 50 states, and they even have branch locations in California, Florida, and Massachusetts. If you don’t live in a state that has a branch location, you can still take out cash at one of their 30,000 ATMs.

22. Bank of America

Bank of America offers a second chance bank account called SafeBalance. It’s a checkless banking account that is designed to be flexible. It comes with a debit card that you can use to make purchases and withdraw cash. Account holders can also use the mobile banking app to transfer funds and deposit checks.

There’s a monthly service fee of $4.95, and you can open the account with as little as $25. It’s a great option for college students and anyone who maintains a lower account balance.

23. Staley Credit Union

Staley Credit Union works with customers in Illinois, Indiana, and Tennessee. You can open a checking account with $50, and there’s a $7 monthly service fee.

24. Webster Bank

Webster Bank offers a second chance checking account called Opportunity Checking. It’s available to customers in Connecticut, New York, and Rhode Island. You’ll open the account with $50, and there’s a monthly service fee of $16.95. However, if you set up direct deposit, they will reduce the service fee to $11.95.

25. Appalachian Community Federal Credit Union

Appalachian Community FCU is available in Tennessee, Virginia, and Kentucky. You can open a new account with just $20, and there’s a monthly maintenance fee of $10.

26. Centennial Bank

If you live in Alabama, Arkansas, Florida, or New York, you can open a second chance checking account with Centennial Bank. The account is called Opportunity 100 Checking. You’ll need to deposit at least $100 to get started, and the monthly service fee is $9.95 with direct deposit.

27. City National Bank

City National Bank is available to customers in Kentucky, Ohio, Virginia, and West Virginia. There’s no minimum monthly balance, but there is an $8.99 service fee. However, you can lower the fee to $6.99 by setting up a direct deposit. And your first two non-sufficient funds fees will be waived.

28. CommonWealth One Federal Credit Union

CommonWealth One FCU is only available to customers in DC, Maryland, and Virginia. You must open the account at a branch office. There are no monthly fees and no minimum balance requirements.

29. HomeStreet Bank

You can open a checking account with HomeStreet Bank with just a $50 minimum opening deposit to get started. There are no monthly minimum balance requirements and no monthly service fees. The account is available to customers in select states across the U.S.

30. Hope Credit Union

Hope Credit Union is available to customers in Arkansas, Louisiana, Mississippi, and Tennessee. You’ll need $25 to open a checking account, and there’s a monthly service fee of $9.95. However, the service fee will be waived if you can maintain a $200 minimum balance.

31. Simmons Bank (Formerly Landmark Bank)

Simmons Bank recently acquired Landmark Bank, a bank with locations in Missouri, Oklahoma, and Texas. Simmons Bank offers an Affordable Advantage checking account for customers that want to maintain a low monthly balance. You can open the account with $25, and there’s a $5 monthly service fee. However, account holders won’t be able to write checks with this account.

32. First Financial Bank (Formerly MainSource Bank)

First Financial Bank acquired MainSource Bank, a bank with locations in Illinois, Indiana, Kentucky, and Ohio. You can open a new checking account with a $50 minimum opening deposit to get started, and there are no minimum balance requirements.

33. UNIFY Financial Credit Union

UNIFY offers Right Start Checking for anyone opening a bank account for the first time or trying to improve their banking history. You’ll need a $25 minimum deposit to open this second chance checking account, and there is no minimum balance requirement. And if you open up a savings account, you can set it up as overdraft protection.

34. InTouch Credit Union

InTouch Credit Union is available in Michigan, Nevada, Tennessee, Texas, and Virginia. You can become a member by opening a savings account with just $5. From there, you can open a checking account with at least $50.

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
Banner Federal Credit Union: Opportunity Checking
Copper State Credit Union: Try Again Checking
MariSol Federal Credit Union: Start Again Checking
Pima Federal Credit Union: Fresh Start Checking
Tucson Federal Credit Union: Second Chance Checking
Tucson Old Pueblo Credit Union: Mission Checking

Arkansas

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

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
Excite Credit Union: Fresh Start Checking
Foothill Credit Union: Rebound 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
Strata Credit Union: Fresh Start Checking
University Credit Union: Fresh Start Checking
Ventura County Credit Union: Second Chance Checking

Colorado

Liberty Savings Bank: Clean Slate Checking
NuVista Federal Credit Union: The Last Chance Checking

Connecticut

Eastern CT Savings Bank: Restart Checking
Finex Credit Union: Re-Start Checking
Hartford Federal Credit Union: 2nd Chance Checking

Delaware

WSFS Bank: Fresh Start Checking

District of Columbia

CommonWealth One Federal Credit Union: Second Chance Checking

Florida

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
Priority Credit Union: Restart Checking
San Antonio Citizens Federal Credit Union: Checking Rebuilder
SouthState Bank: Fresh Start Checking
South Florida Federal Credit Union: Aspire Checking
United Bank: Gateway Checking

Georgia

Community Bank & Trust: Second Slice 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
Peach State Federal Credit Union: Fresh Start Checking

Hawaii

We were unable to find any second chance checking accounts in Hawaii. However, several national and regional banks in the list above offer second chance checking to residents of Hawaii.

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 Checking

Indiana

Centra Credit Union: Opportunity Checking
Diamond Valley Federal Credit Union: Fresh Start Checking
Evansville Teachers Federal Credit Union: Opportunity 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
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
Hearthside 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
Washington Savings Bank: Interest 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
MUNA Federal Credit Union: Fresh Start Checking

Missouri

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
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

Nevada

Clark County Credit Union: CheckAgain Checking
WestStar Credit Union: Fresh Start Checking

New Hampshire

We were unable to find any second chance checking accounts in New Hampshire. However, several national and regional banks in the list above offer second chance checking to residents of New Hampshire.

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

Excite Credit Union: Fresh Start Checking
American Partners Federal Credit Union: EZ 4U Checking
Charlotte Metro Credit Union: Fresh Start Checking

North Dakota

We were unable to find any second chance checking accounts in North Dakota. However, several national and regional banks in the list above offer second chance checking to residents of North Dakota.

Ohio

Buckeye State Credit Union: Second Chance Checking
Eaton Family Credit Union: 2nd Chance 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: Second Chance 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: Advantages Green Light Checking
West Branch Valley Federal Credit Union: Back on Track Checking
WSFS Bank: Fresh Start Checking

Rhode Island

We were unable to find any second chance checking accounts in Rhode Island. However, several national and regional banks in the list above offer second chance checking to residents of Rhode Island.

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

We were unable to find any second chance checking accounts in South Dakota. However, several national and regional banks in the list above offer second chance checking to residents of South Dakota.

Tennessee

First National Bank: Credit Builder
Greater Eastern Credit Union: Fresh Start Checking
Holston Methodist Federal Credit Union: Second Chance Checking
Hearthside Bank: Square One Checking

Texas

4U Credit Union: Fresh Start Checking
Abilene Teachers Federal Credit Union: Restart Checking
Air Force Federal Credit Union: Rewards 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 of the Southwest: Second Chance Checking
Memorial Credit Union: New Path Checking
Neighborhood 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

We were unable to find any second chance checking accounts in Vermont. However, several national and regional banks in the list above offer second chance checking to residents of Vermont.

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

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
Marine Credit Union: Credit Builder Checking
Crossbridge Community Bank: Fresh Start Checking
WESTconsin Credit Union: Foundations Checking

Wyoming

WyHy Federal Credit Union: Second Chance Checking
WYO Central Federal Credit Union: 2nd Chance Checking
Valley Federal Credit Union: Opportunity Checking

What is second chance banking?

Most banks will run a ChexSystems report when you apply to open a new checking or savings account. This report lets financial institutions know if you have a history of overdrawing your account or unexpectedly closing accounts without reconciling a negative balance.

If the bank or credit union determines that you’re too much of a financial risk, they can deny your application to open up a new account. Unfortunately, not having access to a checking account can cause financial problems for many people.

Paying in cash or relying on prepaid cards to manage daily transactions just isn’t feasible for most people. Not to mention, not having a bank account makes it difficult to do things like paying your mortgage or make major purchases.

Second chance banks offer you an opportunity to improve your banking history. They offer more lenient terms, don’t run a ChexSystems report, and often have a low minimum opening deposit.

Why should I open a second chance bank account?

If you’ve struggled to manage a bank account in the past, you may have racked up several negative marks on your ChexSystems report. Unfortunately, a poor ChexSystems report can prevent you from opening a checking account with certain financial institutions.

Not having access to a bank account can cause financial problems for many people. It can be hard to pay your bills and relying on cash or prepaid debit cards is unrealistic for most people. That’s why a second chance bank account can be so beneficial.

A second chance bank account allows you to rebuild your ChexSystems report. There may be certain restrictions on the account, but if you can keep your account in good standing, you may be able to switch to one with more favorable terms in the future.

What should I do if my application to open a checking account is denied?

If you’ve recently been turned down for an application to open a checking account, it could be due to a poor ChexSystems report. ChexSystems is a consumer reporting agency that keeps a record of negative banking history for up to five years.

Unfortunately, the banking industry varies greatly when it comes to second chance bank accounts. Some banks view consumers with poor ChexSystems reports as too much of a liability and don’t offer second chance bank accounts.

Other banks and credit unions are willing to offer second chance bank accounts but put heavy restrictions on the account to limit the financial liability. For instance, you may not have access to check writing privileges or have to pay a monthly fee.

If you were denied a bank account due to a ChexSystems report, your best course of action is to find a bank that is willing to work with you. Look for one that either doesn’t use ChexSystems or offers a second chance bank account.

How to Avoid Problems in the Future

Once you open a second chance bank account, you must focus on building good banking habits. This will prevent you from running into the same types of problems down the road.

Make sure you regularly check your account balance and closely monitor your transactions. This will help you avoid overdrawing your account.

If you can set up a savings account as a form of overdraft protection, it will keep your account in good standing and save you from paying hefty monthly fees.

Signing up for a free class on financial management could help you learn the skills you need to manage your bank accounts effectively. In fact, the bank you open an account with may require you to sign up for this type of class.

Pros and Cons of Second Chance Bank Accounts

Pros

Here are some of the biggest advantages of opening a second chance bank account:

• Can help you improve your ChexSystems report
• More convenient than relying on cash or prepaid cards
• Can help you avoid excessive bank fees
• Build a positive banking relationship over time
• You may be able to upgrade your account to a traditional checking account after keeping it in good standing for a certain length of time.

Cons

Here are some of the downsides that come with a second chance bank account:

• May come with costly monthly service fees
• There will likely be a minimum account deposit
• You may not have access to check writing privileges
• Won’t help you improve your credit score
• You maybe be required to take a financial management course

Bottom Line

A bad ChexSystems report doesn’t have to upend your life. By doing a little homework, you can find a second chance bank account designed to suit your needs and help you rebuild your banking history.

The account you choose may come with certain restrictions in the beginning. But if you can keep your account in good standing, you may be eligible to upgrade to a more favorable checking account in the future.

^[1] The Annual Percentage Yield (“APY”) for the Chime Savings Account is variable and may change at any time. The disclosed APY is effective as of July 13th, 2022. No minimum balance required. Must have $0.01 in savings to earn interest.