There are a lot of second chance accounts on the market. The truth is that banks, building societies and financial institutions want more people putting money in their accounts, so they are willing to consider people that are not good with money and that have bad credit ratings.
There are some companies and banks that are going to want to help people that are bad with money the try and help them become good customers. They understand that some people may be taught how to manage their money, and there are some that know that people have occasions where they have a bad time and go through money trouble. Then there are banks and companies that want to take on higher risk customers, but that are ready and willing to charge them and freeze their accounts when things start going bad again.
Second Chance Accounts Explained
It comes down to this: Second Chance Accounts (or whatever fancy name this term is used by banks that offer the same sort of services) is basically just a special limited account offered to people who have a ChexSystems record or a Telecheck record, or some sort of bad credit history that prevents them from opening a regular bank account.
Flat out, second chance accounts whatever the sales pitch you have heard are definitely sub par accounts when compared to regular accounts. There’s a host of limitations applied to the account, you likely pay MORE fees (higher monthly fee, must make a higher initial deposit, no checking allowed or limited checking)and you are viewed with a thinly veiled suspicion. Do ANYTHING that smacks of potential risk and the bank may freeze or close your account.
But, at least you have a real bank account.
And, even better, if you don’t screw something up for about a year maybe two, the bank will likely upgrade your account to that of a regular account.
So, a good deal if you can’t open a regular bank account.
Best Second Chance Checking Accounts (2016 Updated)
It is unfair to try and rate so many account options fairly, especially when many of them are almost identical. Plus, the one that is right for you may differ from the one that is right for somebody else.
We can pretty much divide the list into a very very small ‘big banks’ and much larger ‘small banks & credit unions’.
Big Banks Offering Second Chance Checking Accounts
They have an opportunity package that allows you to get an account even if it is a second chance account and you have a poor credit rating. They will take you on so long as you choose certain account packages. They expect a high daily balance in order to avoid the fees. They have 6,252 branch locations that are dotted around the country.
With that “Foundation Checking” account, you have to pay $7 per month and an extra $2 per month if you want paper statements. If you stick with their new account for six months without overdrawing or misbehaving. Get an account online or visit their branches in AL, DC, MO, DE, FL, GA, IL, IN, KY, MD, MI, NC, SC, VA, WI, NJ, NY, OH, PA, RI, WV.
They have an “Easy Checking” account that gives people a second chance, and has budgeting tools and cards that do not allow you to overspend. It allows you to rebuild your credit and trust with the banks via correct and more disciplined spending and budgeting. Get an account online or visit their branches in AL, AZ, CA, CO, FL, NM, and TX.
Their “Second Chance Checking” account has a $9.95 maintenance fee if you have direct deposit and it costs $11.95 if you do not have direct deposit. It costs $3 per month for paper statements, and it will cost you $9 to open the account. Get an account online or visit their branches in AL, FL, GA, KY, PA, SC, LA, IL, IN, MD, MS, NY, NC, OH, TX, VA, WV
Smaller Banks & Credit Unions offer Second Chance Bank Accounts
Here is a list of individual banks, smaller banks, building societies that have second chance account offerings. Many of these are not big bank chains, but store banks, credit unions, banks that operate in a single state or a cluster of states. We’ve tried to be as comprehensive as possible in our list — please inform us if we are missing any.
You can find starter kits at Wal-Mart stores and online to help you get an account. Getting an account is very easy and simple, and works well as a starter account and as a second chance account. They have 60,000 retail locations nationwide that may be able to help you with your bank issues or queries.
They call this “Fresh Start Checking” where they allow you to sign up for one of their accounts, but this one has fewer perks than their regular account. You can join as a second chance account, but you will have to pay $10 per month. Get an account online or visit their branches in KY, TN, and VA.
Their “Pathway Checking” account allows you to get a second chance with a bank account. It is a good account for people that have a lot of money, but are bad with it. Or, for people that have gone through a rough patch and are now ready to change it all around and rebuild their credit rating. Get an account online or visit their branches in AL, AR, CA, FL, GA, NC, NY, SC and TX.
An “Opportunity 100 Checking” account has a bunch of sexy benefits, but you also need a $100 minimum opening balance, there is a $9.95 monthly service fee with direct deposit and a $12.95 monthly service fee with no direct deposit. There are no overdrafts, and you must not already owe them money. Get an account online or visit their branches in AL, AR, FL.
Bounce Back Checking is their option for people that have been turned down for accounts with other banks. They do not have minimum balance requirements, but you have to pay $6.99 per month if you set up direct deposits with the bank, and $8.99 if you do not have direct deposit. They still allow you to have your first two non-sufficient funds fees waived. Get an account online or visit their branches in KY, OH, VA, WV.
Their “Second Chance Checking” account you get to keep many of the perks you get with their regular accounts, but you must sign up for E-Statements, there is a minimum direct deposit of $100, plus you have to pay a $10 monthly maintenance fee. Get an account online or visit their branches in DC, MD, PA, VA.
With a Fresh Start Checking the have to be a member of Corporate America Family Credit Union, you need to maintain a minimum balance of $100 in your Regular Share Account, and you will have to pay their $10 monthly fee. Get an account online or visit their branches in AZ, CA, CT, GA, IL, KS, NC, OH, PA, TX, VA.
Their checking account has a shopping list full of perks, and in a transparent move, they have also put a rundown of simplified small print on the same page as their checking account details so you can see what you are buying into. Their fees are low, and their acceptance rate is fairly high. Get an account online or visit their branches in CA, GA, OK, TX.
Clean Start Checking is FDIC insured and has unlimited check writing for just $9.95 per month. There are no per check charges, it has direct deposit available and you get free online statements. It costs a $50 deposit to open; you get free 24-hour telephone banking and a free debit card. There is no minimum balance requirement and you can get an account online or visit their branches in IN, MI, OH.
They have the “Checking In Program,” which is a rather different approach to second chance accounts. You learn how to manage your budget and handle your money, and you get advice and help repaying your current debts. Once you have passed the program and taken advantage of their tools, you are offered a checking account with them. Get an account online or visit their branches in AZ, CA, CO, ID, IL, KS, MI, OH, OK, OR, TX, WA
This is a New Start Checking account that appears to be a little different from the others. It seems to offer more leniency and slack to people that are bad with money. You should really research into this account because it sounds a little too good to be true. For example, they allow you to have checks returned to you and/or for you to overdraw with an ATM machine and it will not affect your credit rating. Get an account online or visit their branches in IL, IN, OH
Bank On Checking is an account that is aimed at people without a checking account (for whatever reason). They encourage good behavior with their financial education class. HomeStreet Bank will give you $100 for your new personal checking account if you successfully complete a certified financial education class and provide evidence of your completion. Plus, you also have to maintain a positive balance with your Bank On checking account at HomeStreet Bank. Get an account online or visit their branches in AZ, CA, HI, ID, OR, UT, wake.
Their Easy Checking account is aimed at younger people with no credit rating, or people with a bad rating. They allow for unlimited paperless transactions, but you will need to maintain a minimum balance of $25. There is also a $9.95 maintenance fee that is waived with a $200 minimum balance per month. Get an account online or visit their branches in AR, LA, MS, TN.
Their “Rebound Checking” account has been specially created to help people that have bad credit or that have overdrawn and had their accounts closed. It is easy to get an account with this bank if you choose their rebound checking options. They are going to charge you $9.99 per month, but it is a small price to pay given that they take most people with bad credit. Get an account online or visit their branches in MO, OK, TX
The “Fresh Start Checking” has a $25 minimum opening deposit and they have a $14 service fee per statement cycle. If you have e-statements, then it is $12 service fee per statement cycle. If you have direct deposit and e-statements, they lower the maintenance fee to $10. Get an account online or visit their branches in IL, IN, KY, OH.
Their “U2 Checking” is built for new customers and people with poor credit, but it is a little harder to get than the other accounts on this list. Not to generalize, but they do seem to be looking for people that have a high income, but that are bad with money. Get an account online or visit their branches in CA, FL, MA
They offer a “Fresh Start Checking” account that is tailor made for their clients. There are plenty of options, but you should probably talk to a staff member in one of their branches to pick the right account that suits your situation and your credit rating. They have branches in AL, IN, KY.
With their “StartFresh Checking” account, you need a $50 starting deposit and your fees will be $7.95 if you set up direct deposit and $9.95 if you do not. You may enjoy a premium and/or better account if you stay in good standing for eighteen months. Get an account online or visit their branches in DC, MD, VA, WV.
Their “Checking Builder” account you have to pay $12.95 per month, and it will cost you $2.50 to withdraw with an ATM machine if you do not use a Republic bank or Presto ATM. Get an account online or visit their branches in FL, IN, KY, OH, TN.
Their “Renew Checking” has been built to help people that have bad credit. There is a $50 minimum deposit amount that is due the first time you open your account, after which there are no minimum account balance requirements, but you will have to pay a monthly maintenance fee of $5.Get an account online or visit their branches in IL, IN, TN.
An “Opportunity Checking” account has a $50 opening deposit and will cost you $16.95 per month or $11.95 per month if you have direct deposit. They will charge you an extra $2 per month if you want paper statements. Get an account online or visit their branches in CT, RI, NY.
The “Right Start Checking” account has no monthly fee and no minimum balance requirement. There are no maintenance fees and it has overdraft protection of up to $250. It is mostly for people that have no credit rating or a bad (but not terrible) credit rating. Get an account online or visit their branches in AR, CA, UT, VA, WV, CO, IN, KY, MI, MS, TN, TX
What to Do if You Can’t Open a Second Chance Account?
If you are unable to open a second chance account, all is not lost if you need to find a way to manage and store your money, pay bills online, and get access to cash via ATM’s.
- Prepaid Debit Cards: these work just like a normal checking account except you top the account up with a balance first and you pay a bit more in fees.
- Secured Credit Cards: You can use one of these like a bank account: you can pay bills with it, withdraw from an ATM, deposit money on it, and make purchases both online and offline. A secured credit card can also help rebuild your credit. See our list of the best secured credit cards for specific recommendations.
- Internet Bank Account: Just because you can’t get a Second Chance Account with a physical bank doesn’t mean you still can’t get a bank account. One option is to look at opening an internet bank account. These work the same way as a traditional bank account but everything is done online — you apply online and get accepted online. You can deposit cash, withdrawal cash (you are often mailed an ATM), and you can even pay bills online. Internet Bank Accounts may overlook your ChexSystems, Telecheck, or EWS issues and give you an account anyways.
- Money Orders: thes are good if you want to pay a bill but lack a bank account. You can pay via a money order instead. This is a safe and secure way to pay a large bill. You can pick up certified money orders from many locations: post offices, banks, and some stores. Just like checks, you can also cancel money orders by issuing a stop payment.
- Non ChexSystems Bank Account: regular bank accounts offered by regular banks that don’t use ChexSystems. See our Guide to Non ChexSystems Banks.
Now assuming you can actually get a second chance account, here are some things you should know about the accounts, both good and bad.
Second Chance Account Limitations
Now, you should read about some of the limitations you may encounter with a second chance checking account before actually trying to open one.
1. Account Maintenance Fee
This is something that many banks do simply because they can. They figure that they are taking a risk by giving you an account, so they offset that risk by charging you a maintenance fee. The vast amount of competition on the market means they rarely charge large fees, and some will not charge a maintenance fee at all, but there is usually some sort of catch that helps offset the extra risk they take (such as more stringent restrictions or higher overdrawn fees).
2. Require a Larger Opening Deposit
Opening deposits are usually placed on new accounts by banks to help encourage people to use their accounts. It is very easy for people to set up numerous accounts and then leave them to stand for years without doing anything with them. If an opening deposit is required, most people will go back and use their account, which encourages them to begin using it regularly for things such as having their wages paid into it. The opening deposit for second chance checking accounts is not often very high; they usually just want to see some sort of commitment.
3. Less Likely To Offer You Lending And Overdraft Facilities
Unless your circumstances have changed very suddenly, you are applying with a good credit rating or a non-existent credit rating, then it is very unlikely that they will offer you any kind of borrowing facility. However, many of them allow you to upgrade to other accounts if you stay in good standing with them for a while, or some will allow you to apply for credit if your account is in good standing for a while.
4. May Freeze or Close Accounts at the Drop of a Hat
With a regular account they may cut you a little slack if you overdraw quite often, or if you miss a few payments and do not have sufficient funds for your written checks. However, if you have one of their second chance checking accounts, they are more likely to freeze, suspend or close your accounts if things look as if they are going wrong. They may also do more fraud checks, which may delay your payments and receipts, plus it means your accounts may be frozen (temporarily) more easily for innocent transactions.
5. Require a Minimum Balance Every Month
The bank is far more likely to ask for a minimum balance to be maintained during the month in order for you to keep your account or to avoid fees. There are often a variety of ways you can avoid fees, or a variety of ways you can avoid having your account withdrawn (closed). For example, they may ask that you keep a minimum balance, or that you have more than ten transactions per month, or that your deposits total certain amount over the month.
6. Fewer Account Perks
The bank is less inclined to give you the perks it gives to other account holders. Their reasons are diverse, but one gets the feeling they only do it to encourage people to get out of their second chance account and into one of their better accounts that has credit opportunities. On the other hand, the market is so competitive, that some companies offer all the perks of a usual account (except borrowing options).
7. Account Opening Fee
There are banks that will charge you a fee to open your account instead of asking for an opening deposit, and some will want an opening deposit and an opening fee. It is just their way of either offsetting the risk of opening your account, or as a way of having you prove that you really want your account.
8. Limits on Check Cashing
Banks are very likely to set limits and restrictions on your account because you have a bad reputation in their eyes. Maybe they checked your standing with your previous bank and they give you a bad review, or maybe you just have a very bad credit rating. The bank has to lower their risk regarding you and your account without limiting your activity to the point where you leave their account and get another.
They limit things such as the amount of checks you can write or cash because people with bad credit are more likely to have misconduct trouble. Some banks may give you a certain amount of slack when it comes to unexpected overdrafts, and some may set limits so that your account is closed if your unexpected/unplanned overdraft gets too high.
Some second chance checking may not allow you to write checks at all.
Second Chance Account Perks
We’ve given a list of some of the limitations to second chance accounts above. However, besides the limitations, there may be a few perks / benefits offered as well in addition to the usual checking account features you expect from any bank account (money deposit, cash withdraws via ATM, online bill pay, etc).
Note, the whole point of a second chance checking account is to be given a bank account when you can’t get a regular one (because of ChexSystems). The one big perk, besides actually getting a bank account, is that in 12-18 months of good behavior on your part (no unpaid overdraft fees, no owing the bank money, no fraudulent behavior), the banks will upgrade your second chance account to a regular bank account.
Here are some other perks that come with most second chance bank accounts, depending on the institution.
1. Lower Fees If You Set Up Direct Deposits
Most banks are going to encourage you to set up direct deposits because they want you to have your wages paid into your account (or your benefits). This is because it means a lot of money is passed through your account throughout the year, which is good for the bank. Most will offer a higher rate for not having direct deposits into your bank, so that they can tempt you with lower rate offers for setting up direct deposits.
2. Budgeting Tools
There are quite a few banks that are getting into the idea of online tools and apps. Nowadays it is easier than ever to give people mobile apps that they can use to improve their money management skills and their credit rating.
3. Credit Building And Positive Checking Advice And Tools
It is in their interest to make you a better customer, and it is becoming more common for banks to have free advice and tools for you to help rebuild your credit rating and improve your standing with the bank so they may offer you their accounts and borrowing options.
4. Discounts If You Have E-statements
Paper statements are now something that private account holders have to pay for instead of just business account holders. They are rather wasteful when you consider that people can get free e-statements. If you sign up for e-statements when you open your account, then there is a good chance your fees will go down.