Nowadays, our financial decisions and activities are all tracked and used against us. Besides our credit score, banks use the ChexSystems to monitor overdraft fees and bounced checks etc on our accounts. If you ever have your account closed because of overdrafts or other overdue fees, it will not be easy to get a new checking account since banks use ChexSystems to screen new account openings. That is why we always advise our friends not to owe the banks any overdraft fees or attempt to issue a check with insufficient funds in your account. Imagine how inconvenient life will be without a checking account to manage your money.
Once your name is entered into the ChexSystems, there is no easy way to remove it. You may be turned down by banks for years, unable to open a new checking account. Imagine telling the payroll department you cannot accept direct deposit for your paycheck, and you need to be paid in cash!
Many people are trying to open a checking account when they have bad credit. There are actually some banks that offer second chance checking accounts to provide customers an easier way to make good their financial obligations. Some may be smaller banks you have never heard of, or only operate online with no outlets in your state. Just make sure deposits are FDIC insured and this will provide the assurance that your money will be safe.
If you do not want any risks, some banks do give second chance checking accounts for people with bad credit.
Bad credit bank accounts provide you the ease of cashless transactions and tracking your expenses. Most second chance checking accounts have the same banking facilities as normal accounts – issuing checks by phone, debit cards, ATM cards, direct deposit for paychecks etc. Many people are asking for real banks in order to get a check number and routing number for their employers to direct deposit their paychecks. Online bill payments are usually provided so that you can handle all your monthly bills without having to mail checks. You also need an account in order to borrow 500 dollar loans online. Other features you can expect from basic accounts at online banks include:
Make sure you choose a second chance checking account that is FDIC insured, so that your money is well protected. With your new set of checks, make sure you properly handle your money this time without any new bounced checks or overdrafts. Otherwise, I have no idea where to help you find third chance checking accounts.
Even though banks allow you to open a new account, they may decide not to provide any checks initially. You may only be provided online banking and transfers for bill payments. Nevertheless, they will usually provide you a box of checks after a few months if your account remains in good standing.
Typically, the monthly fees for 2nd chance checking accounts are around $5 to $20 dollars. There are other miscellaneous fees, such as ATM fees, check cashing fees, etc. You need to maintain your new account in good standing for up to 12 months, thereafter the banks will usually upgrade it to a regular checking account.
Compare fees for the best deal on a new second chance checking account. You can ask for a fee disclosure statement that shows all the fees applicable on your account, so that you will not be caught off guard at the end of the month.
Remember that the main purpose is to help you demonstrate responsible management of your money to the banks, so that you can eventually get a regular account. Hence, understanding the expectations of the bank, such as the minimum monthly balance, initial deposit, fees etc. If you cannot fulfill these requirements at the moment, it is better to wait and avoid damaging your banking relations monitored by Chex Systems. By the way, do not confuse this with bad secured credit cards for bad credit, which are usually used to improve your FICO score, which is not directly related to ChexSystems.
If you owe any overdraft fees from other banks, you may be required to fully pay off these creditors before you can use a new checking account even if you do not owe this bank any fees. Many people are not aware of this rule, causing their deposits to be stuck in the new checking account for people with bad credit. Always read the fine print on your account opening paperwork to understand the rules involved.