Best Second Chance Checking Accounts

Best Second Chance Checking Accounts

Second chance bank accounts are an option for those who may be denied standard bank accounts due to a rocky banking history. For these accounts, banks either relax application standards, or forgo checking credit reports and ChexSystems reports — which keeps tabs on your deposit account history — altogether.

Not every bank or credit union offers second chance checking accounts though. Additionally, many charge a multitude of fees, which doesn't make climbing out of your banking rut any easier. That's why we've compiled the best second chance bank accounts below to help you get your banking back on track.

Why trust us

At ValuePenguin, we believe that everyone deserves the best financial opportunities. For this list, we identified the best nationally available bank accounts that offer consumers a second chance at banking.

That meant first looking for accounts that don't use ChexSystems and/or credit reports during the application process and accounts with more lenient qualifications. We favored those that charge a low monthly fee, if any at all.

Best second chance checking accounts

Varo Bank Account

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  • Monthly fee: $0
  • Minimum deposit: $0
  • ATM access: Free within Allpoint network; $2.50 out-of-network fee

Varo Bank offers customers a second chance by not using ChexSystems or credit reports when they apply. Even better, the account doesn't charge fees for monthly maintenance, foreign transactions, paper check mailing or transfers. You can even get your paycheck up to two days early when you sign up for direct deposits.

Cash deposits aren't the smoothest with Varo, however, as you will need to visit a participating retailer to deposit cash at the register. This can cost up to $5.95.


Chime Spending Account

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  • Monthly fee: $0
  • Minimum deposit: $0
  • ATM access: Free within MoneyPass and Visa Plus Alliance networks; $2.50 out-of-network fee

Chime doesn't check your credit or ChexSystems reports when you apply for an account. To help make it easier to keep your banking habits on track, Chime doesn't charge fees for monthly maintenance, overdrafts or foreign transactions. You also don't have to wait days for your direct deposit paycheck to clear; Chime will deposit your money into your account as soon as it receives the funds, which can be up to two days earlier than most banks.

Chime also offers tools to help track your spending, pay bills, send checks and automate savings, which is also made easier when you pair the Chime Spending Account with the Chime Savings Account. As a fintech company, Chime partners with The Bancorp Bank and Stride Bank, N.A. to provide its banking services, debit cards and FDIC insurance.


Peoples Cash Solutions Second Chance Checking

Peoples Cash Solutions
  • Monthly fee: $4.95
  • Minimum deposit: $30
  • ATM access: Anywhere Mastercard, Pulse, Cirrus and Maestro are accepted

Peoples Cash Solutions won't deny you a Second Chance Checking account if you have a poor history with ChexSystems or TeleCheck (a check verification company that keeps a database of checks run through its system), unless you've been reported for fraudulent activity. Once you open the account, you'll need to keep up with the $4.95 monthly fee, especially since there's no way to waive it.

The account includes paper check writing and online bill pay abilities. To deposit money into the account, you can set up direct deposits, ACH transfers and wires; use Western Union or PayPal; and mail in money orders or your income check to the bank. Peoples Cash Solutions Second Chance Checking is a product of the Texas-based Peoples Bank.


Wells Fargo Clear Access Banking

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  • Monthly fee: $5, waived if account owner is 13-24 years old
  • Minimum deposit: $25
  • ATM access: Free at Wells Fargo ATMs; $2.50 fee at domestic out-of-network ATMs

Wells Fargo opens up Clear Access Banking to customers who may not be able to open standard accounts due to past banking or credit history. Account holders may not convert the account into another Wells Fargo account for 365 days after opening, which gives you a year to get your banking habits back on track so you can move on to more robust accounts.

The Clear Access Banking account keeps the banking experience simple without many bells or whistles. It doesn't include check writing abilities or earn interest. On the plus side, there's also no risk of piling on overdraft or non-sufficient funds (NSF) fees, as any transactions that would overdraw the account will simply be returned or declined.


GoBank Account

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  • Monthly fee: $8.95, waivable with monthly direct deposits totaling $500+
  • Minimum deposit: $20
  • ATM access: Free within network; $3 out-of-network fee

GoBank — a division of Green Dot Bank — does not check customers' ChexSystems reports, which makes it an option for those who need a second chance account. You can open a GoBank account by purchasing a starter kit at participating retail stores (like Walmart) for $2.95 or less and then registering your new account online or in the GoBank app. When you register, you will need to provide your name, address, birthdate, Social Security number, phone number and other personal information.

Once you're registered, you can take full advantage of the account's features. This includes mobile and online bill pay, mobile check deposit and early direct deposit paychecks. GoBank boasts a "huge, free ATM network" for withdrawals, although you can only view the available ATMs near you once you're signed into your account. You can't make cash deposits at these ATMs; instead, you'll have to visit a participating retailer, which could cost up to $4.95.


Radius Essential Checking

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  • Monthly fee: $9
  • Minimum deposit: $10
  • ATM access: Free within MoneyPass and SUM networks; no Radius fee at non-network ATMs

Radius Bank offers Essential Checking as a second chance account. The account requires enrollment in online banking, eStatements and a debit card. Like many second chance checking accounts, the Essential Checking $9 monthly fee is not waivable. If you use the Essential Checking responsibly for 12 months (which includes keeping up with the monthly fee), you may be able to upgrade to the higher-tier Rewards Checking account.

Although a second chance bank account, this account still offers access to Radius' features for tracking spending, budgeting, debts and even your net worth, not just with your Radius accounts, but across your other external accounts if you choose to link them. Radius is accessible online and on mobile, which includes features such as bill pay and mobile check deposit and pairs with mobile wallets.

While you have free access to the MoneyPass and SUM ATM networks, this account does not allow cash withdrawals at ATMs. Radius does not charge a fee for non-network ATM use, but you'll likely face a surcharge from the ATM owner.


Corporate America Family Credit Union Fresh Start Checking Account

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  • Monthly fee: $10
  • Minimum deposit: $5
  • ATM access: Worldwide within Cirrus, CU24, CO-OP, AllianceOne and MoneyPass networks; first 7 non-network ATM withdrawals free, $2.50 per transaction after

Corporate America Family Credit Union, or CAFCU, gives its members a chance to rebuild their banking history with its Fresh Start Checking Account. Account holders even get access to an online financial fitness course by BALANCE, a financial education and counseling services company. The account even earns some interest on your balance at 0.05% APY.

While you'll need only $5 to open the Fresh Start Checking Account, you'll need at least $25 to qualify for additional products and services from the credit union. As a member, you'll also need to maintain a balance of at least $100 in your Regular Share Account. Keep an eye on the account's $10 monthly fee, which is unwaivable. Those who are eligible to join the credit union include individuals who are employees of a Sponsor Company; family members of a current member; residents or workers within a 25-mile radius of a branch; or members of The Hope Group.

Do I need a second chance checking account?

You'll likely need to turn to a second chance account if you find your bank account applications are consistently getting denied. If you have a history of incurring overdraft fees or you closed an account in a negative balance or with outstanding fees, for example, it may be difficult to start over at a new bank due to this information being reported in ChexSystems reports and credit checks.

Second chance accounts offer another way in, as they don't have the same application requirements as most traditional accounts. Plus, many of these accounts are specifically designed to help you rebuild a positive track record.

Second chance bank account pros and cons

Before you open a second chance bank account, it's important to know what you're signing up for. Here are the benefits and downsides to consider:

Pros

  • Offers another entry into banking, without resorting to more expensive or predatory services
  • May give an option to upgrade to a higher-tier account after a year, depending on the institution
  • Often decline overdraft transactions and avoid overdraft fees, which can shield you from further issues
  • Potentially low-risk opportunity to practice responsible banking

Cons

  • Often charge a monthly fee as a way to show banks you can pay fees on time
  • Limited transaction and spending capabilities
  • Typically lacking in extra perks like budgeting tools, overdraft protection or paper checks
  • Not always available for those with fraudulent activity history

Best second chance banking practices

To make the most of your second chance checking account, you'll want to demonstrate the responsible banking skills we know you can pull off. Proving that you can turn your banking history around also will give you the opportunity to open a more dynamic account, whether at the same bank or at another financial institution.

Here are some of the best practices to make sure you're putting into action:

Pay your monthly fee: If your account has a monthly fee, it's important to show your bank that you can pay it on time, every time. Unpaid fees are a common item that appears on ChexSystems reports. To avoid this mark, bake the fee into your monthly budget. If it doesn't fit into your budget, look for an account that either doesn't charge a monthly fee or offers a way to waive it.

Avoid overdrafts at all costs: This can be a hard ask for folks who live paycheck to paycheck, but it's important to keep a close eye on your balance — at all times, if necessary — to ensure you don't overspend. Due to fees, overdrafts can easily snowball, dragging your situation from bad to worse. It helps to look for an account that declines potential overdraft transactions and doesn't charge fees for overdrafts or non-sufficient funds to avoid this issue entirely.

Stay within your ATM network: Use your mobile app or bank's website to find ATMs that are within network to avoid needlessly losing funds to ATM fees. While it may seem easiest to just go to the nearest ATM, the $2.50 out-of-network fee you'll pay per transaction can add up over time — especially on top of the ATM owner's surcharge.

What is a second chance bank account?

Second chance checking accounts are stripped-down versions of standard checking accounts, typically with fewer features and lower spending limits. Also called "basic" accounts, they can help get you back into a bank if your credit score or ChexSystems history prevents you from opening a regular account.

What are ChexSystems and TeleCheck?

ChexSystems is a consumer reporting agency that tracks your history across your checking and savings accounts. Banks and credit unions can access your ChexSystems report when you apply for an account so they can learn about any questionable banking choices you've made in the past and what kind of risk they may be assuming by banking with you.

Items on your ChexSystems report will remain there for five years unless the source of the item (your bank) removes it or law otherwise has it removed. You can dispute any information on your report if it is inaccurate or incomplete, as well as add a statement to your file about the dispute.

Meanwhile, TeleCheck is a check acceptance company that has a database of all of the checks run through its system — both good and bad. If an institution runs your information through TeleCheck, your application may get flagged if you have an unpaid check or debt in the system.

Is second chance checking as good as standard checking?

On their face, second chance checking accounts aren't as appealing as standard accounts, thanks to their limitations. However, second chance accounts are good products for those who need them, and they have most of the same functions as standard checking accounts, such as offering debit cards and allowing you to make purchases, transfers and withdrawals. Some also include check writing abilities.

The difference is that second chance checking accounts tend to offer those services at a lower capacity. This means you'll likely be more limited in the number of transfers you can make or the amount you can withdraw in a day.

Do credit unions offer second chance checking accounts?

Yes, credit unions can offer second chance accounts, although not all of them do. You'll want to check with the credit union you have in mind to confirm its offerings.

How does one apply for a second chance checking account?

You can apply for a second chance bank account just as you would apply for a regular account, whether by going online, visiting a branch or calling. As usual, your account application will require personal and contact information like your name, Social Security number and address.

Alternatives to second chance bank accounts

If a second chance account just isn't for you, or if you still have issues opening one, there are still some options left.

  • Prepaid debit cards: Prepaid debit cards are a go-to product for those who don't have a traditional bank account, especially since they don't require a credit check. Prepaid cards aren't linked to a bank account, and you can spend only however much you have loaded onto the card. This means you can't get yourself into overdraft trouble.
  • However, prepaid cards are notorious for the many fees they charge. This may make them a risky option for folks who already struggle with fees and keeping their money on track.
  • Fintech debit cards: Banking isn't just for traditional banks anymore; neobanks (online-first fintechs offering banking products) and even P2P fintech companies (like Venmo and PayPal) offer debit cards nowadays. It is worth checking these products out, as they may have more lax requirements, and tend to charge very few fees, if any.
  • Just make sure that your fintech of choice provides FDIC insurance, whether through their own bank charter or a partnership with an FDIC-insured bank, to ensure your money is protected.