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If you've ever been turned down for a checking account because of past banking issues — such as an account closed due to unpaid overdraft fees — second chance checking could offer you another shot at banking.
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Serious banking issues can put you on a list held by consumer reporting agency ChexSystems. Banks look at it or similar sources before approving new accounts — and having a flawed banking history from bounced checks, unpaid fees, or account closures makes it less likely you'll be approved.
Some banks and credit unions offer "second chance" checking accounts for people in this situation. The accounts can help people rebuild their banking histories, but they don't have all the services that come with regular checking accounts.
Second chance checking accounts usually have monthly fees that can't be waived, and they often carry more requirements than standard checking accounts, such as setting up direct deposit or completing a money management class. You typically can't enroll in an overdraft program, since the point of a second chance account is to demonstrate that you can avoid overdrawing.
These checking accounts can help improve banking history, but they don't rebuild credit. For that, consider a secured credit card.
Despite their limitations, second chance checking accounts often beat alternatives, such as prepaid debit cards or check-cashing services. These can come with costly transaction fees and balance requirements, and may also lack convenient features like online banking.
If you can avoid negative balances or fees, many second chance checking accounts let you upgrade to a regular checking within six months to a year.
» Want to explore another option? Check out our roundup of the
The best second chance accounts come with:
Not all second chance checking accounts have these features. Some charge monthly fees as high as $20 and don't issue debit cards or checks to account holders. Check the fees and requirements before applying.
A few banks and financial companies backed by banks offer second chance checking nationwide:
Most major banks don’t offer second chance checking, but many community banks and credit unions have them under various names, such as Opportunity Checking and Fresh Start Checking.
If you can't find one in the lists below, see if your community participates in a Bank On program. This is an initiative many communities have joined that lets city governments and local banks work together to serve those who are trying to get back into the banking system. Another option is to consider a prepaid debit card with robust services and few fees.
Some regional banks and credit unions offer second chance accounts, though customers must often live in certain states or meet other special membership requirements. Here's a list of several such institutions.
Want (or need) an account at a state-based financial institution? Find options by clicking below.
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