Looking for a “second Chance” Checking Account?

If past financial problems have prevented you from opening a checking account, you have another option: a second chance to open a bank account. They usually have some limitations, including a monthly fee, but you can save money in the long run, especially if you use check cashing companies with high service fees.

Why You May Need A Second Chance To Check Your Account

Some banks and credit unions offer second chance accounts to customers who have previously closed their checking accounts due to excessive overdrafts, unpaid fees, or negative balances.

If your account will be closed by your bank, you can get into the black list maintained by ChexSystems , according to the agency work with clients , which inspects the bank accounts. ChexSystems can hold your name on file for up to five years as a high-risk bank customer, making it even more difficult for you to obtain a traditional checking account with other banks.

Second Chance Bank Accounts are different from traditional accounts in that they do not screen ChexSystems based customers, which means that banks will not follow up on your troubled banking history.

Benefits of having a second current account

Second Chance Checking Account Benefits will help you stay organized and save money – you can take advantage of free check cashing, employer direct deposit, special customer benefits or offers, and keep your money safe where it’s secured. with FDIC insurance . In addition, many of these accounts do not need to maintain a minimum monthly balance, as is often the case with traditional checking accounts.

(Another option for customers with a low credit rating is prepaid debit cards , which are worth considering as they can have a comparable monthly fee. However, they also require significant deposits, may have a number of additional fees, and do not have the money management tools you need. receive with a checking account).

It is important to note that a second chance will save you the hassle of using check cashing services, which can charge a percentage of the check cashed, ranging from 1% to 12% (sometimes this is also a fixed amount). The larger the check, the more money you will lose – often much more than you would pay the monthly commission to open a second bank account.

Disadvantages of a second checking account

These accounts are stripped down versions of traditional accounts, so you may have some restrictions depending on what’s on offer, including:

  • The monthly fee is typically $ 5 to $ 10.
  • A small minimum initial deposit, usually around $ 25 (unfortunately, this, combined with the monthly payment, can be a hindrance for some low-income workers).
  • Lower withdrawal and debit limits.
  • No overdrafts or overdrafts.
  • Transaction limits.
  • No checks.

The good news is that it is easy to shop at a bargain price as the limits for these accounts can be different. Some may not have a monthly fee, or offer checking checks, for example.

Where to Find Second Chance Accounts

The big banks don’t have much supply, but you can find a second chance of banking through smaller banks and credit unions (Nerdwallet has a good breakdown of what’s currently available nationwide ). Remember that these banks often have their own trademarks for second-chance accounts, so look for descriptions such as Feature Check, No ChexSystems, or Scratch Check. If you’re ever unsure if a major bank is offering a second chance, just give them a call and ask.

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