Best Checking Accounts For Bad Credit in 2021

Best Checking Accounts For Bad Credit
GUIDE
Ashley Dull
By: Ashley Dull
Posted: September 30, 2021
Advertiser Disclosure

Finding the best checking accounts for bad credit situations can be a daunting prospect, but several banks offer that specific access. 

We’ve done our research and found the five best options for those seeking a second chance bank account with a range of different features and benefits. 

If you’re trying to get your banking situation back on track, it’s a good idea to start with a checking account that meets you where you are.

The 5 Best Checking Accounts For Bad Credit

A bank account is a necessity for everyday life, and bad credit makes it much more difficult to find a willing banking institution to work with. But it isn’t impossible to find a bank that will work with you. It’s just a question of knowing what to look for. 

By comparing features and requirements, you can find a second chance checking account that works for you.

1. Chime

Chime Logo

Chime is an up-and-comer in the online banking world, and its stated goal is to build “A new kind of online bank account that helps members get ahead by making managing money easy.” 

The bank is fully online, and Chime partners with regional banks to provide services like ATM access and member financial products to go along with basic bank account functions. Chime is FDIC-insured, and the process to sign up is easy, with few requirements, no hidden fees, and a refreshing lack of penalty fees built into the account types. 

High Points:

  • No ChexSystem review
  • No monthly fee
  • No minimum deposit or application fee
  • No overdraft fees (up to $200)
  • “Pay Anyone” electronic funds transfer built in
  • Mobile check deposit
  • Credit building options
  • 60,000 in-network ATMs, with a $2.50 fee for ATM access outside of network

Reviews for the mobile banking app are overwhelmingly positive and focus on the ease of use and convenience that Chime offers.

2. Sable

Sable Logo

Sable established itself first as an option for international consumers who needed a U.S. checking account, no Social Security number (SSN) or credit check required. Since then, the company has expanded its offerings while keeping core traits that make it internationally friendly.

According to the company, the process is simple: Sable states that customers can expect their virtual card and account to be ready in as little as five minutes, regardless of credit history. The company also maintains a strict “no fees” policy on basic bank transactions, ATM, and overdraft.

High Points:

  • No monthly fee
  • No minimum deposit/balance
  • No ATM fees, international or domestic
  • No foreign transaction fees
  • No credit check
  • Free international bank transfers to/from over 55 countries
  • Credit building opportunities
  • Free bill pay

For those seeking a rewards program, both Sable credit and debit cards have cash back and rebate offers available. 

3. Current

Current Logo

Current sets itself apart from other bad credit bank account options with a holistic approach to second chance banking. The company offers basic bank account and teen account options, among other products geared toward helping those with bad credit manage their money.

One major, if unexpected, perk that Current offers is Instant Gas Hold Removals. When purchasing gas at the pump, many gas stations put an initial authorization of $50, $75, or even higher amounts, which takes hours or days to drop off. Current customers receive an automatic refund of the authorization amount, freeing up their money right away.

High Points:

  • Faster direct deposits with premium account
  • Cash back program with over 14,000 participating companies
  • No fee for in-network ATM withdrawals
  • No minimum balance
  • No overdraft fees
  • Teen banking with prepaid debit card and parental controls
  • Easy-to-use mobile app
  • Fast application process complete in as little as 2 minutes

The teen account options Current offers are another innovation. Powered by a prepaid debit card, it allows parents to monitor teen spending, top up the account instantly, automate their child’s allowance, and safely introduce teenagers to money management and bank functions.

4. Flare Account

Flare Account Logo

Another newcomer to the online banking industry, the Flare Account is the result of a 2017 partnership between ACE Cash Express, Netspend, and MetaBank. The company sets itself apart through the features it offers and its attachment to charity, and it promises to be an account that grows with you.

The Flare Account doesn’t offer the same access to fee-free ATM withdrawals that other banks on this list boast. But through the partnership that makes the account possible, members can access up to $400 per day in cash at participating ACE Cash Express locations without a fee. 

This may not be as convenient in some situations, and it does require a qualifying direct deposit, but it’s an innovative workaround and a good choice for someone who doesn’t need ATM access often.

The account comes with a monthly maintenance fee, which ranges from $9.95 for accounts that don’t receive the necessary $500 minimum direct deposit, and $5.00 for accounts that do get the required minimum direct deposit. The application process is simple, however, and there are many options for adding money to your account.

High Points:

  • Optional overdraft protection
  • Payback Rewards
  • 2 days faster Direct Deposit
  • Fee-free cash withdrawals at ACE Cash Express locations
  • Charity Card accounts give back to deserving organizations
  • Optional savings accounts give access to a competitive interest rate savings account
  • Mobile banking app that includes mobile deposit
  • Flare Account Virtual Card for added protection and security when making online purchases

The charity card programs set the Flare Account apart, taking the place of a rewards program for account holders who are more interested in making charitable contributions. Instead of donating directly, charity cardholders generate donations for one of several organizations through their purchases.

Donations go to Homes For Our Troops, Save The Children, The Humane Society of The United States, or the National Breast Cancer Foundation based on the purchase amounts charged to the respective debit card.

5. PNC Foundation Checking Account

PNC Foundation Logo

The PNC Foundation Checking Account is a second chance checking account that comes closest to a traditional bank account and is for those who aren’t interested in perks like rewards checking programs or cash back. PNC has been in the industry for decades and has established itself as a respected brand.

The PNC Foundation Checking Account offers basic digital banking tools, including online bill pay, PNC Pay, mobile banking functions, and so on. The account also comes with a benefit in the form of PNC Bank’s services, especially its money management advice and training. If you need advice and help in managing your budget and understanding how to improve your finances, the PNC Foundation account services can be an excellent resource.

The minimum deposit to open a PNC Foundation Checking Account is $25, a modest amount. And while there is a monthly service fee of $5, the PNC brand commands a lot of respect

High points:

  • Low monthly fee
  • No overdraft fees
  • Low minimum deposit
  • Access to PNC Bank financial advice and money management services
  • BankOn National Account Standards Approved
  • No ATM fee in-network
  • Ability to grow status and rebuild credit with PNC
  • Most like a traditional bank account

One strong point for this account is that there is no overdraft fee or returned item fee, which helps you keep your account in good standing. 

What Is a Checking Account For Bad Credit?

Banks often turn down customers with bad credit histories when it comes to checking account access. While it can be difficult to find a traditional bank willing to take the chance, several financial institutions have taken the lead to offer banking services to people who have run into problems.

It’s nearly impossible to conduct everyday life without access to a checking account, credit card, or debit card, especially as more services go fully digital and, therefore, cashless.

While second chance bank account institutions sometimes include fees or restrictions that aren’t typical with more standard bank account types, they represent a method of getting back on track managing finances and a valuable tool to avoid falling further behind.

How Do I Sign Up For a Checking Account?

Depending on the bank you choose to apply to, signing up for a checking account or a savings account involves a few steps. The standard requirements include providing a form of identification, and some requirements are specific to the type of checking account. 

For example, you may need different documents for a joint checking account versus a standard account.

Cartoon image of a driver's license.
You will be required to provide a form of identification to open a checking account.

Once you have chosen the financial institution you want to work with, verify the documentation it requires. Most bad credit checking account options make things easier by bypassing steps like a ChexSystems report, but it’s a good idea to verify before you put in your application.

In general, the best checking accounts for bad credit will allow several different forms of identification because they’re geared toward people in a range of financial and personal situations. 

However, you will need some form of verifiable, government-issued I.D., such as a passport, driver’s license, identification card, or something similar. You will also need proof of address, such as a utility bill.

Fortunately, many bad credit bank account companies are fully digital, which means that you can apply for your second chance bank account without having to leave the house. And that same digital approach also means that the process is quick and relatively painless, using electronic and automatic systems for verification and approval.

What Is The Minimum Deposit Required to Open a Checking Account?

The minimum deposit required to open a checking account varies from one bank to another and sometimes from one account type to another within the same bank. A minimum balance requirement is one method a bank may use to avoid potential issues with customers who are more likely to overdraft, but it’s not a universal requirement for every banking company.

Most second chance bank account providers do not require a minimum deposit to open a checking account, partly because the companies recognize that this creates a hurdle to opening the account. Choosing a bank that does require a minimum deposit has its benefits, but there are so many options available for bad credit checking account services that it doesn’t have to be an issue.

Minimum deposit requirements are more common with basic bank options, and to a lesser degree, with credit union accounts. They function as a measure of security for the banking institution and the customer alike. 

Which Banks Don’t Require a Credit Check to Open a Checking Account?

None of the second chance bank account companies listed in this article require a credit check to open a checking account. However, some other options for basic bank accounts do. Traditional bank companies use ChexSystems report tools to assess risk and make decisions regarding current and potential customers.

ChexSystems, a reporting agency specific to banks and credit unions, collects data about your history in the financial world. It checks the frequency of bounced checks and overdrafts, suspected fraud or identity theft, account abuses, and other problems. Banks use the report to decide whether to approve an account, increase credit lines, or take other actions with prospective and existing customers.

Sample ChexSystems report.
Sample ChexSystems report used by banks to determine approval for a bank account.

The best option for a bad credit checking account is to work with a company that does not look at credit history when determining approval. A bank that specializes in the second chance account market is less likely to do a credit check at all, although the company will likely have restrictions, and there may be other fees and conditions in place. 

Can I Be Denied a Checking Account?

Anyone can be denied a checking account because every bank has a certain amount of discretion over who it chooses to do business with. A few specific reasons are more likely to result in being denied a checking account, especially if you’re seeking a regular checking account with a traditional banking company.

If you’re concerned about the risk of being turned down for a checking or savings account, it may be worth looking over your credit report beforehand. Do some research to find a banking institution or financial company that offers checking account services without conducting a credit check.

A standard checking account is a necessity, and working with a company with a higher tolerance for risk means less chance that you’ll be denied.

Can I Get a Business Checking Account With Bad Credit?

Opening a business checking account with bad credit is definitely possible, but it requires a general understanding of the differences between business checking and personal checking accounts. 

Photo of a man holding a phone and a credit card.
Yes, you can get a business checking account with bad credit, but your personal credit score will be a factor.

Your credit score does affect how willing banks will be to approve a business bank account. As the person running the business, your personal financial activity and history are also relevant. Bad credit will affect your credit card options in business banking, and will often mean that a secured credit card is a more realistic option. 

Business checking accounts are also more likely to charge fees, particularly for business owners with a bad credit history. Certain requirements, including a monthly maintenance fee or minimum balance fee and maintaining a minimum balance, are more likely for business checking accounts than they are for personal checking and savings. 

Do Credit Unions Offer Second Chance Checking Accounts?

Credit unions operate somewhat differently from most traditional banks, with different restrictions on what they can and can’t do and offer. Many credit unions offer second chance checking accounts for consumers with bad credit looking to improve their situation. This puts them in a position to help people seeking a way out of difficult life situations.

A second chance checking account through a credit union may have some restrictions you don’t see in traditional bank accounts, including an initial deposit requirement and sometimes a monthly membership fee.

But there are advantages to banking with a credit union as well. For instance, you are more likely to find ATM fees with a traditional bank than you are with a credit union.

Graphic comparing banks and credit unions.

Many credit unions offer accelerated direct deposit options that make it possible to access your deposits days before they would traditionally appear in your account with the average bank. While credit unions typically have limited mobile banking options, more of them are embracing online banking and mobile deposit capability for the sake of convenience. Since credit unions are membership-based, there’s also a stronger reliance on customer feedback.

Compare the Best Checking Accounts For Bad Credit Online

Comparing the best checking accounts for bad credit doesn’t have to be a daunting task. Both online and brick-and-mortar banks are available to you so you can get the bank account you need.

With minimal to $0 deposit requirements, obtaining an account should be a fast and affordable process, even with bad credit. You can expect to receive your new debit card in the mail within seven to 10 business days.

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