A past banking problem doesn’t have to mean living without an account. Several kinds of accounts are designed for a fresh start.
In a nutshell
- Second chance checking accounts are designed for people with negative records at screening companies like ChexSystems.
- They may carry monthly fees, lower limits or fewer features than standard accounts.
- Bank On certified accounts offer low-cost, no-overdraft-fee banking at many banks and credit unions.
- Many banks let you move to a standard account after several months of good use.
If a bank has turned you down because of past account problems, you still have options. Second chance accounts and low-cost alternatives exist so you can bank safely while your record recovers.
What second chance checking is
Second chance checking is a regular checking account offered to people who’ve had trouble with accounts before, often because of an unpaid negative balance reported to ChexSystems. Features vary:
- a debit card and direct deposit, usually
- sometimes a monthly fee
- often no overdraft at all, so payments are declined rather than overdrawn
- sometimes daily spending or withdrawal limits
Other options
| Option | Strengths | Watch for |
|---|---|---|
| Second chance checking | Full checking account | Monthly fees, limits |
| Bank On certified account | Low cost, no overdraft fees, set national standards | Availability varies by area |
| Credit union account | Often more flexible approval | Membership requirements |
| Online bank account | Some don’t use ChexSystems the same way | Cash deposits can be harder |
| Prepaid card | Easy to get | Fees, fewer features |
Do this
Look for accounts certified under the Bank On national account standards. They’re designed to be low cost, with no overdraft or NSF fees, and are offered by many banks and credit unions.
Moving to a standard account
Many banks review second chance accounts after six to twelve months. If you’ve kept the account in good standing, they may upgrade it to a standard account with fewer fees. If yours doesn’t, you can apply elsewhere once your old records are resolved.
Be wary
Avoid paying a third party to get you an account or to remove records. You can apply directly with banks and credit unions, and dispute inaccurate records yourself for free.
Getting back on track
Pay off any old balances you owe and ask for them to be updated as paid. Keep a small cushion in your new account and turn on balance alerts so payments don’t fail. Our guide to why applications get denied explains your rights, and overdraft fees covers how to avoid the problems that cause records in the first place.
Good questions
Do second chance accounts check ChexSystems?
Some still check it but approve applicants with records, while others don’t use it. Policies differ, so ask before applying.
Can I use a prepaid card instead?
Prepaid cards can work for spending and bills, and federal rules give them some protections, but they usually lack features like checks and may charge their own fees.
Will a second chance account rebuild my record?
Managing it well doesn’t erase old records, but it shows a new bank you can handle an account. Old records also expire after their reporting period.
This guide is general information, not financial or legal advice. Bank fees, account terms and screening policies vary by bank and change over time, so check the account’s fee schedule and terms before you open it. For federal rules, see the Consumer Financial Protection Bureau and the FDIC.