Second chance banking is a tricky business for both the banking institution or federal credit union and the consumer looking to find a bank or credit union that will service them. For a federal credit union or most banks, the risks associated with offering someone a second chance after they’ve had some issues with bad credit, bankruptcy or unpaid debt can make them unwilling to offer banking services to a particular consumer. Customers who overdraft their account become a liability to the bank. For this reason, finding a second chance bank can be a difficult task.
We’ve put together a list of the Best Second Chance Banks in the United States to help you find a banking institution, family or federal credit union to give you that second chance at financial stability you deserve. Before we get to the list of banks and credit unions, we’ll answer some of the questions you may have about second chance bank accounts and how to go about getting one.
#1 BBVA Online Checking – Top Pick
As part of one of the nations largest banking institutions (BBVA USA Member FDIC), BBVA is our top pick for the superb service they offer second chance banking customers. They have a number of options and features for those with credit score and banking issues as well as those who don’t want to rely on standard bank branches.
Features include online and mobile banking deposits, online bill pay, and use of mobile payment transfers. BBVA makes it easy to apply and even has account options for those who don’t qualify for a standard bank account. The mobile tools and app features make it simple and easy to sign up.
- No Monthly Service Charge
- No Monthly Minimum Account Balance
- No ATM Fees On In Network ATMs
- Free Visa Debit Card
- Free Money Transfer
- Unlimited Check Writing and Free Checking
- $25 Minimum To Open Account
- BBVA USA Member FDIC Insured
#2 Chime Bank
Chime is online and mobile banking first bank. They specialize in second chance banking with no credit check and no use of ChexSystem (the banking score system) so banking history is not an issue. Developed during the smartphone era and a relative new player in the bank account space, Chime has some of the best mobile banking features of any of the big players. Chime is also available in all 50 states thanks to the fact that it is online based. It is also one of the only banks to require no opening deposit and no maintenance fee and a minimal ATM service fee.
An account is easy to setup from any mobile device and many of the features are automatic or app based allowing for completely branchless operation and bank services, including 38,000 free ATMS. Chime also has options similar to some prepaid debit card services like early deposit, up to 2 days early with no additional monthly fee. Chime is unlike other financial institutions because they are fully integrated with today’s technology including all types of money transfer options and early deposits. They specialize in giving customers remote control of their money in a variety of ways.
- Free Visa Debit Card
- No Banking Fees or Monthly Fee For Service With Direct Deposit
- No Monthly Minimum Balance
- Mobile Checking and Check Deposit
- Saving Account Transfers
#3 Radius Bank – Essential Checking Second Chance Checking Account
One of the key features of the Radius Bank Second Chance Checking account is the ability to upgrade to a rewards account after 12 months of positive banking history. This gives consumers with poor history or bad credit a way to upgrade to a regular checking account. They also offer full bank service even to their higher risk customers. They do place limitations on each second chance bank account such as daily limits on debit card withdrawals and check deposit limit through mobile options. Even with these limitations, Radius offers comprehensive service with some of the lowest fees available and great availability for ATMs and services.
- 32,000 Free ATMS
- Free Master Card Debit Card
- Monthly Service Charge of $9
- $10 Minimum Deposit To Open Account
- No Monthly Minimum Balance
- $5 Daily Overdraft Fee
#4 One United Bank – U2 E Checking Account
One United Bank offers electronic checking and free online banking for second chance checking account holders. Offers access to standard bank account features for customers with only a moderate monthly maintenance fee. Bank accounts also have access to app money requests with Popmoney. U2 E Checking accounts are specifically tailored for people with ChexSystems credit issues and those with poor financial history.
One United Bank does have limited options for physical bank branches but does offer debit cards for use with free atms and debit cards are also integrated for contactless tap to purchase technology. Customers also have fully available online bank features.
- $12 Monthly Maintenance Fee
- $50 Minimum Deposit
- Free Online Banking
- Free ATMs
- Free Money Requests With Popmoney
#5 Wells Fargo – Clear Access Banking
Wells Fargo has offered a number of benefits to their second chance banking clients. Being one of the largest banks in the country allows them to offer some of the best perks, even for at risk accounts. For clear access second chance banking accounts, there are some precautions in place that protect both the customer and the bank, which is an added benefit that other providers do not offer. For one, Wells Fargo only issues these accounts debit cards, no check writing is allowed. This lowers the risk of fraudulent activity or overdrafting through check writing. A second measure in place is the automatic declining of purchases when funds are insufficient. This saves the bank money and helps customers avoid a hefty overdraft fee.
Wells Fargo has gone a step further and eliminate many other fees associated with accounts. The monthly maintenance fee is only $5 and the service fee can be waived for account holders 24 and under. They provide both app based and website based banking as well as early warning services for accounts and debit cards to prevent fraud and other suspicious activity
- Most Branches in America
- Available in All 50 States
- $25 Minimum Opening Deposit
- Online Website and Smartphone App Bill Pay
- Money Transfer Through Zelle
- Visa Debit Card Provided With Each Account
- Check Deposit and Check Cashing From ATMs is Available
- Account Monitoring, Liability Protection For No Additional Monthly Service Fee
#6 Washington Savings Bank – Online Rewards Checking
One of the few financial institutions to offer a specific fresh start checking account for people with problems with opening a standard checking account. Their fresh start checking accounts are designed with features to help customers rebuild their banking relationship. Washington Savings Bank offers easy to open second chance checking accounts with a monthly maintenance fee, but no other monthly service charge, relaxed ChexSystems requirements and second chance checking accounts are eligible to upgrade to a free checking account after 12 months of good standing.
They offer fully online bank services for second chance checking accounts through their website and mobile app. As well as other banking features and even features to help customers budget and repair their financial standing.
- Free Mastercard EMV Debit Card
- Free Online Banking And Bill Pay
- No Minimum Balance
- Free Budgeting Tools
- Free Mobile Banking
- Direct Deposit and Mobile Deposit Option After 3 Months of Successive Direct Deposit
- Free eStatements Available Through Website and Mobile
#7 Corporate America Family Credit Union
Here we have a credit union that has tailored their guidelines to second chance banking and second chance checking accounts. They do have certain requires that are standard for a federal credit union as well as a savings account requirement for their fresh start checking account program. You won’t find unlimited check writing or check cashing as with other banks, but they do provide a number of tools to help with managing a checking account so that customers that have faced credit issuesin the past can truly succeeding.
To open an account with CAFCU you’ll need a $100 opening deposit into a savings account (for security) and to complete the credit union application process, which is simple and only requires a $5 charitable donation. For those looking for a fresh start checking option without a lot of bank fees, a service fee on every transaction, balance requirements, or other monthly fee, a family credit union is a great option. There is no minimum opening balance for a checking account no monthly balance requirements and only a $5 service fee to keep your account open.
- Free Visa Debit Card
- Free Direct Deposit
- Free Online Account Accessing and Mobile Bank Services
- Free Bill Pay
- Free Account Management Tools
#8 Peoples Bank – Peoples Cash Solutions Second Chance Checking Account
Peoples Bank’s second chance checking is a great option for people with credit issues or low ChexSystems scores. Almost anyone can open a second chance checking account so long as they don’t have fraudulent activity on an account reported. They offer services in all 50 states and have a low minimum opening deposit for a new account. Unlike some online banks and banks with mostly mobile features, Peoples Bank even offers customers a free checkbook and debit card with each new checking account.
They have one of the lowest monthly fees of any bank when you start checking accounts with them and they offer second chance bank accounts a full range of second chance checking account services that are made for people who don’t want fees and need to rebuild their financial standing. Many banks don’t allow paper checks with a checking account due to the possibility of overdrafts or the modernization of technology. Peoples bank has a simple and helpful approach to second chance checking.
- $30 minimum opening deposit
- $4.95 monthly service fee
- MasterCard Debit Card
- Online Bill Pay
- Online Banking
- Online Money Transfer
#9 GTE Financial – Go Further
GTE is a credit union with options that rival most banks. Based in Florida but available online in all 50 states. A great option for those that don’t qualify for a traditional checking account and after 12 months of positive account activity, customers can upgrade to standard account. Opening an account is as easy going online and filling out the application. The service fee is fairly modest at $9.95 and there are a number of ways to avoid it. Making regularly deposits either through physical or direct deposit with a balance of $500 or more and making 15 transactions a month allows customers to waive the monthly service fee. It is free to open and account and there is no minimum balance with the monthly service fee.
- Free EMV Equipped Debit Card With Rewards
- Online and Mobile Banking Tools
- Free Bill Pay
- Popmoney Money Transfer
What Is Second Chance Banking?
Second chance banking is an option available to consumers who have a poor credit score, a poor financial history, low ChexSystem Banking Score, and other problems such as bankruptcies and liens. They allow consumers to open banking accounts with a bank or family or federal credit union, usually with limitations and restrictions while they work to repair their credit score or banking history.
Second chance banking accounts are offered by a variety of institutions, be it a bank, federal credit union, or local family credit union with both major branches and online only banking available to customers in a wide array of situations. Most any bank, federal credit union or local credit union will offer access to free checking accounts online, bill pay, early warning services , and other features. Many of them do feature withdrawal limits, monthly maintenance fees and account alerts, service fees, overdraft fees or other charges. Some account holders may also be limited in their ability to obtain a bank associated credit card due to credit score. A credit union or bank may check with and report to a consumer reporting agency to help improve your credit score after showing a positive banking history for a period of time with said bank or credit union.
The process to sign up for a second chance bank account is no more complicated than the process for a normal account with the exception of certain restrictions on daily withdraws and additional service fees. You can find a bank or federal credit union with options in all 50 states.
Can You Open A Savings Account With A Second Chance Bank Account?
Second chance banking is all about giving consumers who struggle with their finances more options when banking. While most banks and credit unions don’t offer a specific savings account for second chance clients, some banks and credit unions will offer savings account options as part of their checking accounts.
A savings account can help your financial status. A bank or federal credit union may offer to round up spending and direct deposit the difference into savings accounts on a regular basis. This shows positive spending habits and can improve your financial health. Some second chance banking programs allow you to upgrade to a regular account once you’ve proven yourself. Positive accounts with regular balances can help, this includes savings accounts. Savings with a federal credit union often has a higher gain of interest over that of other institutions.
Savings accounts also offer protections for your second chance banking accounts, most banks offer overdraft protection by pulling necessary funds from existing savings accounts.
Why Don’t I Qualify For A Regular Checking Account?
There can be a number of reasons why your regular checking account at your local bank or credit union was closed or you’re no longer able to open an account at your favorite bank or federal credit union For some users, there is a problem with your banking history related to a previous account or an account that was opened jointly with another person at a different bank or credit union may cause issues with your current bank or credit union account. Sometimes issues can be present that the person seeking an account are unaware of. A bank or federal credit union is able to look at your entire financial history through your credit and your ChexSystem score as well as other means. Monitoring your credit and keeping bank accounts current and with a positive balance can help.
Closing an account that has been opened recently at a bank or federal credit union can negatively impact your credit, as can repetitive overdrafts and negative balances. For this reason, the monthly service fee on an account is sometimes higher due to the increased risk. In extreme cases a bank or credit union may deny an account altogether though this is usually only in the case of fraud or criminal activity. You can usually check with your respective bank or credit union to find out the criteria that they measure your financial standing on. You can see what banks don’t use ChexSystems in order to get your financial life back.
In some cases it is simply due to inactivity. An inactive bank or federal credit union account impacts credit negatively as well. Some programs at a bank or credit union offer incentives to promote positive banking behavior and allow users to upgrade to a regular account after a period of positive activity. A bank or credit union may provide financial tools and tips to keep on top of your banking and promote positive behavior.
What To Look For In A Second Chance Bank or Credit Union Account?
While some banks do place restrictions on customers with poor bank history, there are certain features you should look for regardless of your history or credit to make yourself more successful in your financial endeavors.
Finding a bank with no minimum balance is a great choice for customers who want to be able keep a bank account without worrying about regular deposits and balances. Finding a bank with overdraft protections is also a good choice.
Banks with a minimal or no service fee are also a good choice for customers trying to get back on their feet and don’t want to worry about service charges for a bank to hold their money. The object is to improve financial success, not spend more money.
Another option, one that is up for debate is the ability to write checks, some customers prefer check writing, however please note that without overdraft protections, check writing can lead to unexpected overdrafts and associated fees.
Another thing to consider, especially in the modern era is the ability to use online services, either through a website or a mobile app. This allows for modern payment options such as money transfer through payment apps, mobile check depositing and online bank statements and account balance access. These features are almost necessary in today’s society and are definite must when looking at different options.
Lastly, debit card and atm availability is important for financial freedom. Some banks offer debit card options but have a limited number of atms and charge fees to transfer or access funds from them. For users who need to get cash quickly or regularly or who make regular deposits and other transactions, a debit card and plenty of atms is a nice thing to have. With these features in mind you can find a financial institution that will suit your needs and provide for healthy financial habits.
Which Is Better: A Bank or Federal Credit Union?
In terms of which is better, the differences in a bank or federal credit union are subject to the needs of the customer. For a customer needing a lot of financial products such as app services, mobile and online banking, mobile check deposits and other services, banks offer more the better option.
Credit unions offer second chance bank accounts as well and provide a number of features that customers who are looking to reestablish their credit score and borrowing ability may find the better option. Credit unions generally have better interest rates on savings accounts, better rewards benefits for checking accounts and better rates when seeking personal financing options such as loans or a credit card through the credit union. While not all options may be available to a second chance customer, they can become available as the customer’s status improves. Choosing between a bank or a credit union will be dependent on what you need as a customer and where you’re trying to go with your financial needs.
There you have it. Our hand picked list of the best banks to give you a second chance at financial success. We’ve done our best to give you a wide variety of options to put you on the path to healthy finances and better credit. Whether you’re starting over, rebuilding your credit or just hit a bump in the road and need some help, these options are great choices for all your banking needs. Our top pick BBVA Online Checking is one that has all the options covered if you’re in the second chance banking market. Consider giving it or any of our other options a look the next time you’re searching for banking solutions .
A mother who was once in debt along with a bad credit score is here to share here experience, tips, and guides on how she overcame her debt and achieved a fantastic credit score.