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This is a list of the best checking accounts for bad credit.
Bad credit impacts your life on so many different levels. Having bad credit can even impact your ability to obtain something as simple as opening an online bank account. Poor credit can make some days feel like you can’t catch a break, but you can and you need to take charge of your financial life. Having no checking account equals unnecessary fees and charges that can be avoided.
Statistics from the FDIC indicate that around 25% of Americans are what we call unbankable or underbanked Those that are entirely unbankable, have no bank account at all, and typically use check cashing places to cash checks. If this is you, then you need to continue reading. The other alternative is to use pre-paid debit cards to handle their banking needs. Thankfully 750CreditScore has helped hundreds of people just like you open online bank accounts.
Second chance banking can help you to get on the “Road To Financial Recovery”. Banks understand that sometimes life happens. These no credit check bank accounts are designed with you in mind.
Bank Accounts for Bad Credit, Credit Bureaus, and ChexSystems
Many banks review the credit history of their potential customers before approving them for a bank account. Some banks utilize the services of the three major credit bureaus: Equifax, Transunion, or Experian.
Banks will take it a step further and use ChexSystems. ChexSystems is the equivalent of a credit bureau for banking. This company tracks your history of overdrafts, bad checks, account write-offs, and account freezes. Banks will also look at check fraud, negative balances, excessive withdrawals, and ATM usage through the Early Warning System (EWS). If you happen to get on the naughty list, then obtaining a bank account may be almost impossible.
What Banks Will Let You Open A Checking Account With Bad Credit?
You can open a bank account with poor credit. 750 Credit Score has compiled a list of the best online checking accounts for bad credit. These accounts are more than like going to be no-frills, no bells, and no whistle type of checking accounts. At the top of the list is CIT. It’s our favorite second chance bank account. One of the biggest reasons that CIT tops our list in the #1 spot, there are no ATM fees, No monthly, and online access is a breeze.
The 10 Best Second Chance Bank Accounts
1. CIT Bank
CIT Bank is an online-only bank that is owned by CIT. It is 100% all digital and offers a variety of services from savings, checking, and various loan products. CIT provides a wide array of banking products online. There are no physical locations. You will have access to various ATMs throughout their nationwide access
Pros:
- No monthly fees
- 0.40% APY (if requirements are met)
- Fully online bank
Cons:
- $100 initial deposit required
- No physical branches (customer service is only available through the app, by phone, or via email)
2. CHIME®
Chime is a mobile banking option with no minimum balance, no maintenance or overdraft fees, and offers direct deposit. Chime does not have physical locations, everything is online. It is FDIC insured and your money is protected up to $250,000. Chime will take you even if you have had poor or bad credit
You can also receive your direct deposit up to 2 days earlier than a regular bank. As soon as your direct deposit hits, it is released to your account, no hold period.
Pros:
- NO monthly service charge
- NO credit check; Bad credit OK
- NO fees at over 38,000 MoneyPass® and Visa Plus Alliance ATMs worldwide
- You can literally open an account with $5. There is no minimum payment required to open an account and no required minimum balance.
- No maintenance or overdraft fees.
- FREE mobile and online bill pay
- NO ChexSystems or Telecheck; guaranteed approval
- FREE online banking and mobile banking/deposits
- NO foreign transaction fees
- FREE Visa® debit card
- NO monthly minimums
- SAVINGS: You can round up every purchase to the nearest dollar and automatically deposit that difference into your savings account.
3. Go Bank
GoBank allows you to open a checking account without a credit check or ChexSystems report. Although there are no physical locations, GoBank has an impressive number of in-network ATMs.
Pros:
- Mobile banking.
- Free debit card with your checking account
- Overdrafts aren’t permitted, so you don’t have to worry about overdraft fees.
- No fee when you open your account online, otherwise there is a $20 minimum deposit and $2.95 sign-up fee.
Cons:
- $8.95 monthly fee- this fee is waived as long as your total monthly deposits total $500.
- $3 fee for out-of-network ATM withdrawals.
- $5 fee for lost atm card replacement.
- Cash deposits can cost you $4.95 at the various retailers that are part of the Go Bank Network.
4. AXOS
Axos has been around since 2000. It has established itself as one of the founding digital banks. There are a few physical locations in California.
Axos has a wide variety of checking accounts. They also offer second chance checking, hence they made our list of banks for those seeking second chance checking.
Pros:
- Mobile banking.
- You can open a second chance saving account along with your checking account.
- Overdraft protection is available for a fee.
- Simple mobile banking
Cons:
- No interest on checking accounts.
- $6.95 monthly maintenance fee even with a monthly direct deposit. $8.95 without a scheduled direct deposit.
- Minimum $50 deposit to open an account.
- $310 daily limit on ATM cash withdrawals when you use your ATM card.
5. Aspire
Aspire Federal Credit Union offers a second chance checking account called Fresh Start Checking. In order to qualify, you are required to direct deposit 100 percent of your paycheck into your account each month.
Pros:
- A free debit card linked to your account.
- Over 70,000 ATMs, with no fees in-network.
- No monthly maintenance fee.
Cons:
- You must direct deposit your entire paycheck.
- You can not have any type of fraud on your banking history.
First American Bank®
First American Bank has branch locations in several states including Florida, Illinois, and Wisconsin. They have ATMs around the country. They offer a Fresh Start Checking account for people with less than stellar credit.
Pros:
- No minimum monthly balance is required.
- Over 55,000+ in-network ATMs around the country.
- Unlimited check writing.
- Mobile and online banking.
Cons:
- $50 deposit to open an account.
- Monthly maintenance fee is$9.95.
6. Peoples Bank
Peoples Bank may be the answer to a ton of prayers. They offer a Peoples Cash Solution Second Chance Checking account. They offer online banking in all 50 states. You can upgrade to a regular checking account after 12 months.
Pros:
- Free Debit MasterCard®
- Online Bill Pay
- Online money transfer
- Online banking as well as paper checks.
- No ATM fees as long as you stay in-network.
Cons:
- $30 deposit to open an account.
- Monthly maintenance fee of $4.95
- $27.50 overdraft fee.
- $2 fee per transaction at out-of-network ATMs.
7. Bank of America
Bank of America offers a second chance account called the SafeBalance Banking® Account.
Pros:
- Tons of ATMS within their large network.
- No Overdrafts and no overdraft fees. All overdrafts are declined automatically.
- Wire, and direct deposit transfers.
- Mobile check deposits.
Cons:
- $25 minimum deposit to open an account.
- $2.50 fee per transaction at out-of-network ATMs.
- No paper checks.
- $4.95 monthly maintenance fee.
8. Radius Bank
Radius was named 2021 Best Bank or Credit Union for Online Experience by Nerdwallet. They offer Essential Checking for the second chance customers. You may be able to upgrade to a regular checking account after 12 months.
Pros:
- Rebuild your record
- 1% cash back on purchases.
Cons:
- $9 monthly maintenance fee.
- $Daily debit card limit of $500.
- Mobile check deposit limit of $1,000 per day; limit of $2,000 per 10 days
- $5 overdraft fee assessed each day account remains overdrawn.
9. Wells Fargo
Wells Fargo offers a second chance checking account called Opportunity Checking. As long as you follow their guidelines then the checking account will essentially be free.
The fee is waived as long as you make 10 or more posted debit card transactions (any combination of posted debit card purchases or posted debit card payments of bills) from this checking account purchases or keep a minimum $1500 daily balance or post a total of $500 in direct deposits on a monthly basis.
Pros:
- $10 a month fee
Make free transfers between your Wells Fargo checking and savings accounts. - Overdraft protection is available for a fee.
- Over 13,000 ATM
- Option to convert to a standard checking account after one year.
- Best Bank for Teenagers and college students
Cons:
- Overdraft fee $35
- Minimum $25 deposit to open an account.
- Nonsufficient funds fee $35
- $10 monthly fee unless you keep your daily balance at or above $1,500 or you receive direct deposits totaling $500 each statement cycle.
10. Woodforest National Bank
Woodforest National Bank Apply Now
Woodforest National Bank® has been around for over 40 years. They are one the strongest community banks in the nation. They are known for their outstanding customer service.
Second Chance Checking®* Choice Checking* Account Overview. This unlimited transaction account is designed to provide a low cost option for your everyday checking account needs. Minimum to open: $25.00
Pros:
- Free electronic bank statements.
- Large network of participating ATMs.
- Free ATM transactions as long as you visit an in-network ATM.
Cons:
- $25 minimum deposit to open an account.
- $9.95 monthly maintenance fee. This fee goes up to $11.95 if you aren’t signed up for a direct deposit.
- $9 one-time account set up fee.
- $32 overdraft fee per item.
- $15 fee to set up your debit card.
- Doesn’t earn interest.
What Is a Second Chance Checking Account?
Having bad credit doesn’t mean that you are condemned to a life without a bank account. You need to focus on re-establishing a healthy relationship with banks and that may mean utilizing a “Second Chance Bank Account”
Don’t despair, Banks understand that life sometimes gets in the way, hence Second Chance Bank Accounts are the perfect solution. If you have encountered a few twists & turns in life as most people have and in light of a global pandemic that is ongoing, there is still a light at the end of the tunnel.
Second chance accounts offer a solution, but keep in mind that they also have their disadvantages which may include monthly fees, no overdraft protection, and often they are online and a customer service is a person on the end of the phone.
Poor Credit: Why It Is Essential That You Obtain A Bank Account
The vast majority of banking institutions have gone mobile as has the remainder of the world. In order to do simple everyday transactions such as buying groceries, paying your car note, getting food at your favorite restaurant, you need to be able to swipe or input a debit card.
Life is simply hard and more complicated without a checking account. When you have no bank account, you are diminished to having to stand in long lines to obtain a money order or use check-cashing services that charge high fees to conduct business.
In addition, many services will not do business with you if you do not have a checking account. You can not apply for a mortgage loan without a bank account.
3 Ways To Get A Bank Account With Bad Credit
#1. Review Your ChexSystems Report
Take the time to review your ChexSystems report and dispute all errors. They have an online dispute process that is similar to the online dispute process that you would do with one of the three credit bureaus. You are entitled to one free ChexSystem report every 12 months under federal law. Request a free report here ChexSystem Consumer Assistance
If your find any errors then submit your dispute utilizing their online dispute system. Make sure that you double-check and find any insufficient fund fees, negative balances, unpaid loans, overdrafts. You may be able to contact the financial institution and negotiate a settlement in exchange for removing the information if it is recent. Most negative items drop off after 5 years.
#2. Find Banks That Don’t Require A Credit Check
Most banks use ChexSystem to review applicants’ banking history. What is ChexSystems – Think of it as a credit reporting agency for bad checks. ChexSystems maintains records on your banking history.
#3 Open a Second Chance Checking Account
Second Chance Checking gives you the opportunity to get back on the right path.
You may pay higher fees, but these fees are insignificant when compared to check cashing fees and money order fees. Let’s not mention the amount of time wasted simply standing in a long line. Having a second chance account is 100% better than having no account at all. You do not want to find yourself in an emergency situation where you absolutely have to access a bank account., ie., needing a rental car or roadside assistance, where you may need to pay and be reimbursed by your insurance company. If this happens at midnight, do you really want to call someone and tell them that you can cash app the money to them if they will use their account to help you out? Probably not!
5 Things to Look for When Picking a Checking Account for Bad Credit
- Low or No Maintenance Fees
- Free Services
- No Minimum Balance Requirements
- Mobile Banking
- Physical Branch Locations
The 10 Best “Second Chance” Checking Accounts For Bad Credit
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About The Author
Marvette Critney
Marvette Critney is a Real Estate Broker in Metro Atlanta, GA, a Credit Expert, and the founder of 750 Credit Score Blog Resource Site, and the well-known blog site Brag Differently. Her credit advice and knowledge have helped hundreds to become homeowners. She is recognized as a leader in her field. Read more.