If you’re having difficulty getting a bank account, the solution to your problem may be to get an account known as a second chance bank account. They’re specifically designed for people who can’t open traditional bank accounts due to past banking or credit problems.
Whenever you apply at a bank to open an account, especially a checking account, the bank will do a background check on you. This is similar to making an application for an auto loan or credit card but it’s more specific to deposit accounts.
In most cases, your application will be approved, even if you have poor credit. But if you’ve had problems managing a bank account in the past, you may not be accepted for a new account at another bank.
Examples can include having a checking account closed by a previous bank for too many overdrafts or bounced checks. Another is when you close out a bank account with a negative balance. That can happen if you simply abandon an account, maybe even because it has a negative balance, and leave the balance unpaid.
In either case, the next bank may be understandably reluctant to allow you to open a new account and take the chance of the same outcome happening.
If that describes your situation, you may want to consider what’s known as a “second chance bank account.”
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🔁 Updated March 2024 with new second chance bank accounts and more details about how ChexSystems and QualiFile works.
What are Second Chance Bank Accounts?
Banks have something like a credit bureau for deposit accounts. You’re probably aware that your credit is reported to the three major credit bureaus – Equifax, TransUnion, and Experian. Banks have a similar bureau used throughout the banking industry, called ChexSystems. If your record with ChexSystems indicates problems with previous bank accounts, that information will remain on your record.
Anytime you open a new account, the bank will check your records with ChexSystems to get a report on your previous banking history. If you have negative entries, you’ll probably need to contact the company to do what’s necessary to resolve them. However, they’ll likely stay on your record for some time, making it difficult to open a new bank account.
But that’s where second chance bank accounts come to the rescue. They’re specifically designed for people who have negative information in their ChexSystems report (and a poor QualiFile score). In most cases, these banks don’t use the ChexSystems report.
If you haven’t been able to open a traditional bank account, second chance bank accounts are highly recommended. Absent a bank account, and especially a checking account, you’ll fall into the category of consumers referred to as the unbanked or under-banked. That will make you dependent on costly alternative banking services, like check-cashing services, prepaid debit cards, or payday loan providers.
If you are currently without a bank account here are the cheapest ways to cash a check.
The biggest advantage of second chance bank accounts, next to the banking services they provide, is that they give you a chance to improve your QualiFile Score with ChexSystems. After a couple of years and a good banking relationship, you can come out of the ChexSystems doghouse, and be eligible for a traditional bank account.
Note: If you have an open balance on a previous, closed bank account you should pay it off as soon as possible.
Best Second Chance Bank Accounts
Some banks and credit unions do offer second chance bank accounts of some type. However, they tend to be highly localized and may not be available to you if you don’t live in their immediate service area. Below is a list of what we believe to be the best second chance bank accounts available on a nationwide basis.
Keep in mind that at some banks you will need to apply for the traditional checking account first and if you don’t qualify you will then be offered the second chance account.
Chime
Chime is a mobile financial service that performs neither a credit check nor a ChexSystem reference. That makes it the perfect service for anyone who’s had difficulty opening a traditional bank account. They’ll even pay you a $5 bonus to open your account. Oh, and if you travel internationally or make purchases in foreign currencies, there’s no foreign transaction fee.
The app also provides balance and transaction alerts to keep you on top of the activity in your account, and to help you avoid overdrafts and other issues.
Chime features:
- Minimum initial deposit/balance requirement: $0
- Monthly maintenance fee: $0
- Other fees: None
- Debit card: Yes
- In-network ATMs: 38,000+
- Availability: Nationwide
Chime is a financial technology company, not a bank. Banking services provided by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC. The Chime Visa® Debit Card is issued by The Bancorp Bank or Stride Bank pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa debit cards are accepted. Please see back of your Card for its issuing bank.
LendingClub Bank
LendingClub Bank, formerly Radius Bank, offers its Essential Checking for consumers who don’t qualify for their traditional bank account. One of the big advantages is that after 12 months of a good banking history with the account, you can be upgraded to LendingClub Rewards Checking.
You should be aware that there is a daily debit card spending limit of $500, and a mobile check deposit limit of $1,000 per day, or $2,000 over 10 days. Your account will also include the LendingClub Bank Integrated Financial Dashboard, which will help you set up a budget, track spending, analyze your spending habits, link external accounts, develop a plan to pay off your debts, and calculate your net worth.
LendingClub Bank Essential Checking features:
- Minimum initial deposit/balance requirement: $10
- Monthly maintenance fee: $9
- Other fees: Non-sufficient funds fee $25 (but does not apply to items of $5 or less); overdraft fee, $5 per day
- Debit card: Yes
- In-network ATMs: 500,000+
- Availability: Nationwide
Get started with LendingClub Bank
Wells Fargo Clear Access Banking
Wells Fargo used to offer an Opportunity Checking product that was designed specifically for consumers who are unable to open a standard account due to either past credit for banking problems. The account came with mobile banking, and standard banking features, including paper checks, a debit card, and the Bill Pay feature. They also have tools available to help you create a budget and track your spending. That was recently discontinued.
Instead, they now offer Wells Fargo Clear Access Banking which is designed for customers who want help managing their money. It’s also targeted towards teens and students, so it may not be a perfect fit for someone who is unable top open an account due to previous problems.
That said, this offer is the best alternative for those looking at Wells Fargo.
Wells Fargo Clear Access Banking features:
- Minimum initial deposit/balance requirement: $25
- Monthly maintenance fee: $5 – can be avoided if you are ages 13 – 24. No other way to avoid this fee.
- Other fees: 3% foreign transaction fee transactions; withdrawals at non-network ATMs, $2.50
- Debit card: Yes
- In-network ATMs: 13,000+
- Availability: Nationwide
Get started with Wells Fargo Clear Access Banking
GoBank Checking
GoBank will enable you to open a checking account without going through ChexSystems or even doing a background check. The account comes with a few more fees than other second chance bank accounts on this list. But they require no minimum initial deposit, and the monthly maintenance fee can be easily waived the direct deposits of at least $500 per month.
It’s a full-service checking account, including paper checks (increasingly rare in the mobile banking world), pay bills online, and send and receive funds online in minutes. The ATM network doesn’t list some locations. But they do indicate it’s extensive, even extending to being able to make deposits more than 70,000 retailers nationwide.
GoBank features:
- Minimum initial deposit/balance requirement: $0
- Monthly maintenance fee: $8.95, waived with monthly payroll or government direct deposits of at least $500
- Other fees: $2.95 sign-up fee, waived if you sign-up online; out-of-network withdrawal fee, $3; foreign transaction fee 3%; cash deposits made for retailers, up to $4.95
- Debit card: Yes
- In-network ATMs: “Massive”, but no specific number is given
- Availability: Nationwide
Peoples Bank Cash Solutions Second Chance Checking
Peoples Bank Cash Solutions Second Chance Checking is available to consumers who have been denied a checking account for bad credit, bankruptcy, or issues with ChexSystems. The account comes with a debit MasterCard, giving you access to a worldwide ATM network, as well as MasterCard’s zero liability coverage. It comes with a personal checkbook, online bill payment capability, as well as online money transfers.
Peoples Bank Cash Solutions Second Chance Checking features:
- Minimum initial deposit/balance requirement: $30
- Monthly maintenance fee: $4.95
- Other fees: Overdraft and nonsufficient funds fee, $27.50; out-of-network ATM withdrawal fees, $2.50
- Debit card: Yes
- In-network ATMs: 1 million+, wherever the MasterCard, Cirrus or Maestro logo appears
- Availability: Nationwide
Get started with Peoples Bank Cash Solutions Second Chance Checking
Should You Open a Second Chance Bank Account?
If you’ve been struggling without a traditional checking account, you should absolutely consider a second chance bank account. Not only will it give you an opportunity to rebuild your banking history, and move up to a traditional bank account within as little as one year, but it will also help you to avoid the many high fees that come when you use alternative banking products.
Check cashing services are expensive, and not always reliable. And if you have to use a prepaid debit card, you’ll deal with recurring fees regularly. With a second chance bank account, you’ll get a Visa or MasterCard debit card, that can be used anywhere either card is accepted. You’ll typically pay no fees for in-network withdrawals and deposits.
A checking account connected ATM card alone can be a major stress reliever. You can use it just about anywhere a debit or credit card is required, without needing to load funds onto a prepaid card each time you need to make a purchase or pay a bill.
With a second chance bank account, you’ll be able to write checks where necessary, pay bills online, transfer funds in and out of the account, and use your debit card for both ATM transactions and online and point-of-sale purchases.
If you’ve struggled to manage your finances without a traditional checking account, a second chance bank account can be downright liberating. You owe it to yourself to apply for one of the checking account providers on this list. That will both simplify your finances now and create the opportunity to get a traditional bank account later.
Also, check out our list of no credit check bank accounts.
