For many Americans, it is far too easy to fall into a financial hole. Whether it comes from unexpected expenses or overspending, most people have found themselves in a situation where they are struggling to balance their budget. For some, the situation becomes more desperate than usual, leaving them in a position where their financial woes prevent them from even getting a bank account. For these people, a second chance bank account may be the solution.
What is a Second Chance Bank Account?
A second chance bank account is a special type of bank account for people with especially flawed credit and financial histories. Generally, these people have had their old accounts closed due to unpaid fees required by their old bank. When this happens, their names are put on a consumer reporting agency list, which makes it less likely that a bank will approve them for a new banking account. However, some banks and credit unions offer relief in the form of second chance bank accounts.
These accounts do exactly what their name suggests — give people who have previously made financial mistakes a “second chance” at traditional banking. Second chance bank accounts have more limited services and features than regular banking accounts, but can often serve as a bridge towards rebuilding a strong banking history. If used correctly, people may be able to gain access to a traditional bank account in the future.
What Comes With the Best Second Chance Bank Accounts?
While they have fewer services than traditional bank accounts, second chance bank accounts are more beneficial to account holders than options like pre-paid debit cards and check-cashing services, both of which tend to charge extremely high fees.
In contrast, second chance bank accounts charge comparatively low monthly fees. They typically have either a low balance requirement or no balance requirement, so account holders can access all of the money in their account as necessary. A second chance bank account will typically provide users with a debit card and will generally not impose limits on services such as online bill payment and check writing privileges. Many second chance bank accounts will permit users to upgrade to a traditional bank account within a certain time frame if they avoid negative balances or fees.
However, there are some limitations that come with second chance bank accounts, depending on your bank. This may include requiring you to set up a direct deposit of your paycheck to your account or to taking a money management course. These are meant to help you learn how to better manage your finances to avoid fees and having your bank account closed again.
How to Find Second Chance Banking
The best place to find a bank that offers second chance banking accounts is right in your community. While most major banks do not offer second chance bank accounts, many local banks and credit unions offer this option to customers. Alternatively, consider checking out the Bank On program to see if your city government has partnered with a local bank to help local residents get back into the banking system.
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Best Second Chance Checking Accounts
Wells Fargo Opportunity Checking and Savings Account
The Opportunity Checking and Savings Account from Wells Fargo is a second chance banking account that is available nationwide to customers who have been denied access to traditional checking accounts. It requires a $50 minimum deposit to open the account, and allows customers to opt into overdraft protection. The Opportunity Checking and Savings Account has a $10 monthly service fee. This fee can be waived if you keep a minimum daily balance of $1,500 in the account, if you receive $500 total in direct deposits during the statement cycle, or if you make 10 debit card purchases or payments. With this account, you also get free debit card access and free access to online bill pay. You can also request a spending report to more closely watch where your money is going, and you can transfer money from your checking to your savings accounts.
Corporate America Family Credit Union Fresh Start Checking
Fresh Start Checking gives members of the Corporate America Family Credit Union (in Arizona, California, Connecticut, Georgia, Illinois, Kansas, North Carolina, Ohio, Pennsylvania, Texas and Virginia) the ability to rebuild a positive banking history. It requires a minimum balance of $100 in a regular share account, and account holders must pay a $10 monthly fee. Through the Fresh Start Checking Account, account holders can take an online study course titled “In Balance” in order to learn how to better manage their finances.
PNC Bank Foundation Checking Account
The Foundation Checking account is a second chance bank account for PNC bank customers who apply to other types of checking accounts and are not approved based on their banking history. PNC charges a $7 monthly service fee for this type of account, and a minimum $25 deposit is required. In order to open the account, you must first complete a Foundations of Money Management Course. After 6 months, you will have the option to “graduate” to a traditional banking account, provided that you have not incurred fees or other charges.
First National Bank and Trust Company Renew Checking Account
The Renew Checking account is a second chance account with no monthly minimum balance and a $15 one-time set-up fee. A $9.95 monthly service fee can be reduced to $7.95 if you set up direct deposit. This second chance account offers free online and mobile banking, free bill pay, and a free e-statement (paper bills cost $2 per month). After 12 months in good standing, you will be eligible to upgrade to a traditional bank account.
BBVA ClearChoice Free Checking
The BBVA ClearChoice Free Checking account is not officially a second chance bank account, yet it is regularly offered to people who are listed with ChexSystems. It is a free checking account with the full features of a traditional bank account. It offers free online and mobile banking, free online and paper statements, and a free debit card. It requires a minimum deposit of $25 to open. If you are denied a ClearChoice Free Checking account, BBVA will offer applicants its EasyChecking Account Option.