When other banks won’t give you an account it’s easy to feel like there’s nothing out there that will help. Fortunately, second chance bank accounts are available to just about anyone who wants them. They work in a very similar fashion as the traditional accounts do, but you don’t deal with the bank. In this post I want to explain why banks are refusing to work with you, and how these accounts work.
If you’ve defaulted on a traditional bank account, the bank likely reported you to a company called Chexsystem that “blacklists” you from getting a new account. Banks get reports on new applicants from this company to protect themselves from those that have had problems in the past. It’s rough for those of us that are stuck in this system, but there is help! Second chance bank accounts are a great alternative!
These alternative bank accounts approve anyone who applies, no matter your credit score, employment status, or prior banking history. The only thing needed to be approved is proof that you’re a US citizen!
Rather than dealing with a bank, these companies essentially give you a line of credit that is equal to how much money you’ve deposited in your account. They offer services like debit cards, online banking, direct deposit, cash withdrawal, and paper checks.
You can’t expect a service like this to be free, but the fees are surprisingly low. If you’ve had to resort to going to a check cashing store to get cash, you’ll probably save money over that service with a 2nd chance account. Each company will have their own specific fees, but they are usually incurred when depositing or withdrawing money, or a flat monthly fee. The fees are generally lower when you enroll in their direct deposit program since they don’t have to deal with traditional banks at all.
Second chance bank accounts are a great way to get a new start with your finances. They cost more than a traditional account, but are way less than check cashing and payday loan services!