Second-Chance Bank Accounts of 2022

Second Chance Bank Accounts

I had a flashback when my editor assigned me this article on second chance bank accounts. Many decades ago, I got my first job as a programmer without the benefit of any training. My initial assignment was a disaster, a program so full of holes it could have been imported from Switzerland. 

My boss recognized a problem, but instead of firing me, he sent me for training, and the rest is history. I truly understand the value of second chances.

If you’ve ever screwed up your credit to the point where no regular bank will let you open an account, these six institutions offer the promise of redemption. They accept customers with bruised and battered credit, offering checking accounts and some innovative services you may not find at your local bank branch.

6 Best Second Chance Checking Accounts

We’ve identified a half-dozen financial institutions that offer second chance checking accounts and related services such as ATM access, direct deposit, and the use of a debit card. These online banks enjoy a much lower overhead without being burdened with the costs of brick-and-mortar branches. They share these cost savings with their customers through low fees and extended services.

1. Chime

The Chime Bank Account may be the best second chance bank. It is on a mission to help its customers regain their financial health. It offers low fees on its attractive, FDIC-insured checking and savings accounts.

  • No minimum deposit, ChexSystem review, monthly service charge, application fee, or overdraft fee (up to $200 of overdraft protection)
  • Get a Visa® debit card with access to 60,000+ fee-free ATMs
  • Direct deposits arrive up to two days early
  • Use “Pay Anyone” to transfer funds electronically
  • Automatically grow your savings
  • Mobile banking app with support for popular e-wallets, mobile check deposit, and no-fee mobile payments

Chime allows you to round up your debit card transactions to the nearest dollar and transfer the round-up to a savings account. You can also automatically divert a portion of your direct deposits into a savings account. 

2. Sable

The Sable Debit Card is attached to an online bank account that waives the usual bank expenses, including a monthly service charge and an annual fee, ATM fee, foreign transaction fee, and overdraft fee. It requires no minimum deposit, minimum balance, Social Security number, or credit check to open. Moreover, you’ll earn cash back on eligible purchases.

  • Debit Mastercard® with 1% cash back on select debit card purchases
  • Social Security number and credit history are not required
  • $0 liability protection and extended warranties on purchases 
  • Free bill pay
  • Mastercard Airport Concierge available
  • Transfer money fee-free domestically and internationally to more than 55 countries

The Sable debit card works with popular mobile banking and payment apps, including Apple Pay, Google Pay, and Samsung Pay. You can apply for a Sable ONE secured credit card that offers cash back rewards, car rental insurance, and cellphone protection.

Banking services are provided by Coastal Community Bank, Member FDIC, pursuant to license by Mastercard International Inc.

3. M1 Finance

M1 Finance offers The Finance Super App™ that allows you to invest, borrow, and spend on one intuitive platform. It provides accounts with fewer fees, tools with intelligent capabilities, and strategies to help you build long-term wealth.

  • The FDIC-insured M1 Spend checking account offers a signup bonus, payment scheduling, and early direct deposit
  • M1 Plus offers 1% cash back on purchases and 1% APY on balances (annual fee waived the first year)
  • No required minimum balance
  • Up to four ATM reimbursements per month
  • Low international fees, waived with M1 Plus 

You can get an M1 Visa Signature credit card with zero liability, instant freeze and unfreeze, and cash back rewards that you can reinvest. M1 also offers a commission-free brokerage account, custodial accounts, and a flexible line of credit.

4. Current

Current offers a free checking account, a teen account, and a premium account for $4.95 per month. You can add money to your checking account via cash deposits at select retailers, mobile check deposits, and direct debit deposits.

  • No fees for courtesy overdraft protection and select transfers
  • No minimum deposit balances
  • Access Allpoint network of 40,000+ free ATMs
  • Free Visa debit card with reward points on each eligible debit card purchase
  • Goal-directed Savings Pods support automatic savings and debit card round-ups
  • $50 signup bonus when you meet direct deposit requirements
  • Teen banking with a prepaid debit card, parental controls, and automated allowances
  • Choice Financial Group provides FDIC-insured banking services

Using the Current mobile app, you can set up budgets, perform a mobile deposit, and receive instant purchases notifications. The premium account adds early access to direct deposits and immediate gas station authorizations

Current is a financial technology company, not a bank. Banking services provided by and Visa® Debit Card issued by Choice Financial Group, Member FDIC, pursuant to a license from Visa U.S.A. Inc and can be used everywhere Visa debit cards are accepted.

5. Flare Account

The Flare Account from ACE Cash Express provides online second chance banking services and a high-yield savings account. Its mobile app enables payback rewards on select purchases and mobile check deposits.

  • Direct deposits allow faster access to your money
  • For a one-time processing fee, you can get a debit card with select rewards and an optional courtesy pay overdraft service
  • No fee on ATM withdrawals of up to $400/day at ACE Cash Express locations
  • Savings account pays a competitive APR on balances up to a set amount
  • Receive alerts on account transactions and balances
  • Virtual accounts available for enhanced security and protection
  • Charity debit card programs let you donate your rewards

The core Flair Account charges a monthly fee that you can reduce via direct deposits. You receive a token APY on your deposited funds, and you can link your account to other banks and PayPal for easy money transfers.

6. Oxygen

Oxygen is an app that supports personal and business bank accounts from Bancorp Bank. It’s an ideal account for businesses with bad credit.

  • Four different cash-back reward programs
  • No monthly service charge, minimum balance, or ACH fee
  • It comes with a Visa debit card 
  • Get paid up to two days faster with direct deposit
  • Create single-use or merchant-locked cards that mask your card details
  • PriorityPass lounge access
  • Free cellphone and travel insurance

The account offers digital reimbursements for select merchants, including Peloton and Netflix. The Oxygen app allows you to incorporate an LLC quickly if you are a business owner.

What Is a Second Chance Bank Account? 

Second chance bank accounts allow consumers with a troubled financial history to access banking services, including checking, savings, ATM access, and debit cards. Many second chance banks have no physical branches, forcing you to interact online and via a mobile app. 

But some familiar brick-and-mortar banks, including the Wells Fargo Opportunity Checking and Clear Access Banking accounts, offer a second chance checking account, albeit with monthly fees and limited services.

Chime Screenshot
Second-chance banks, such as Chime, allow people with troubled banking histories to open new accounts.

We call banks “second chance” because they don’t check your credit or past banking problems when you apply for an account. It’s your second chance to demonstrate that you can handle your finances responsibly. You should receive immediate approval when you submit your account application. 

How Does a Second Chance Bank Account Work?

In practice, second chance online banks work similarly to traditional banks with personal checking accounts except perhaps for the lack of branches. You use your mobile app to manage your account, check balances, pay bills, and transfer money. You can also accept direct deposits and access ATMs. 

Some of these banks allow you to write physical checks, although most encourage you to pay bills online and use your debit card whenever possible. Most second-chance banks offer access to an established ATM network for free. However, you’ll pay fees when you use out-of-network machines.

What Services Do Second Chance Bank Accounts Provide?

Most second chance banks offer the following essential services:

  • Checking and savings accounts
  • Debit cards
  • Direct deposits
  • ATM access
  • Mobile deposits
  • Online and app account management
  • Money transfers
  • Credit cards

M1 Finance also offers brokerage services, which many brick-and-mortar banks do not. Some second chance banks also offer business accounts.

The convenience of an online-only second chance bank’s 24-hour operation has a few downsides:

  • No in-person service: Customer service may be available via phone, email, or chat, but you can’t interact directly with a human being across a desk when dealing with an online second-chance bank.
  • Limited secondary services: A traditional bank or credit union may offer services unavailable from most second chance banks, including insurance, annuities, car loans, personal checking, mortgages, credit builder accounts, and financial counseling.
  • Personal relationships: Customers, especially business owners and borrowers, can establish personal connections with their branch bankers. This capability may sometimes amount to handholding but can often be necessary to businesses that need readily available credit. For example, a professional home flipper may apply for dozens of mortgages each year and needs a banker who offers a sympathetic ear, a quick loan, and a reasonable rate. Online-only banks generally don’t provide personal relationships.
  • International commerce: You will need a large, traditional bank for help with letters of credit, foreign payrolls, currency exchange, and global treasury management.

Only you can decide whether these are dealbreakers for your unique banking needs.

Do Second Chance Bank Accounts Check Credit?

Most second-chance banks boast that they do not check applicants’ credit, meaning they don’t pull a credit report from the three major credit bureaus (Experian, Equifax, and TransUnion). That’s a boon to customers with bad credit who have trouble opening conventional bank accounts.

Your second chance account may offer you a credit card that doesn’t report your payments to a credit bureau and can’t help you rebuild credit. Be sure to check with the bank to find out its reporting policy if you intend to get a credit card. 

ChexSystems provides another, lesser-known form of reporting. It collects information about the problems consumers have with their deposit (i.e., checking and savings) accounts, including:

  • Overdrafts (assuming no overdraft protection)
  • Bounced checks
  • Bank-initiated account closure
  • Unpaid negative balance
  • Fraud or identity theft
  • ATM, card, or account abuse
  • Number of recently opened accounts

A typical bank or credit union relies on ChexSystems reports to evaluate customer applications. A bank will likely deny you an account if you have a negative ChexSystems report.

Second chance banks usually do not use ChexSystems — otherwise, they would have trouble offering second chances. In some cases, a second chance bank may offer special accounts for applicants with problems on ChexSystems — a so-called fresh start checking. 

These fresh start checking accounts often charge monthly fees but allow you to graduate to regular, no-fee checking after a probationary period.

Unlike the credit bureaus, ChexSystems reports only negative information, which remains on file for five years. Under the Fair Credit Reporting Act, you have a right to correct misinformation on consumer reports, including those from ChexSystems.

How Should I Compare Second Chance Banks?

Ask the tough questions when comparing second chance banks. You’ll want to know the following:

  • Branches: A few traditional branched banks offer second chance accounts. You may find this important if you prefer to establish a personal relationship with a banker.
  • Fees: Understand the bank’s entire fee schedule and any required minimum balances or direct deposit activity. Naturally, you’ll prefer a no-fee account, but you may not find a small monthly fee disqualifying.
  • ATMs: Most second chance banks offer free ATM use within a network. But not all networks are equal, so check whether machines are near you. Also, consider any daily or monthly limits on deposits and withdrawals.
  • Services: Compare the services that second chance banks offer. Some do not permit paper checks or person-to-person money transfers. 
  • Cards: Most second chance banks offer debit cards and credit cards. Ideally, both should provide rewards for purchases. If you want a credit card, compare APRs, grace periods, fees, signup bonuses and promotions, availability of cash advances and balance transfer transactions, and credit limits.
  • Apps: Most second chance accounts operate via mobile apps. You can compare apps based upon their user-friendliness and their functionality. For example, ask whether an app supports mobile check deposits and integrates with a mobile e-wallet.

In some cases, you may find a relevant service to be a tiebreaker. For example, you may prefer a second chance checking account that offers brokerage services or helps you create an LLC.

Can I Open A New Bank Account If I Still Owe Another Bank?

Opening a new bank account can be tricky if you owe money to another bank. Much depends on whether the new bank subscribes to ChexSystems, which reports your previous banking problems.

Many second chance banks either don’t use ChexSystems reports (e.g., Varo Bank Account, Stride Bank Account) or don’t treat a credit report as decisive. In this way, second chance banks can offer you a fresh start despite previous branch or online banking problems. 

Sample ChexSystems Report
Owing another bank may not matter if the new bank doesn’t pull your ChexSystems report.

Consider whether you’d like to clean up previous bank problems rather than trying to open an account that ignores them. Repaying debt and fees may help avoid collections and help your credit score. 

What Are the Alternatives to Second Chance Banking? 

It may be you who doesn’t want to give a bank a second chance or even a first. Those who are bank averse can access many bank-type services through a prepaid debit card. Our top three picks are as follows:

  • Brink’s gives you the peace of mind you deserve. Securing cash and valuables since 1859.
  • With Brink’s Direct Deposit, you can get paid faster* than a paper check.
  • No late fees or interest charges because this is not a credit card.
  • Use the Brink’s Money Prepaid Mobile App to manage your account on the go and get text message or email alerts (Message & data rates may apply.)
  • *Card issued by Republic Bank & Trust Company, Member FDIC. Card may be used everywhere Mastercard Debit cards are accepted. “Apply Now” for full details.
  • See additional Brink’s Prepaid Mastercard® Details.
★★★★★

4.6

Overall Rating

Application Length Interest Rate Reports Monthly Reputation Score
5 minutes N/A (Prepaid) No 7.5/10
  • Greenlight is a debit card for kids, managed by parents
  • Parents set flexible controls and receive real-time alerts while kids monitor their balances, set goals, and learn how to manage money
  • Feel secure knowing Greenlight blocks unsafe spending categories
  • Receive Mastercard’s Zero Liability Protection
  • Upload a photo of your choice to create a unique custom card
  • Debit cards are FDIC-insured up to $250,000
  • Easily turn your Greenlight card on or off and receive real-time spending notifications
★★★★★

4.5

Overall Rating

Application Length Interest Rate Reports Monthly Reputation Score
5 minutes N/A (Prepaid) No 7.0/10.0
  • Move money from your PayPal account to fund your prepaid card account.
  • Earn cash back and personalized offers, just for using your card.
  • With Direct Deposit, you can get paid faster than a paper check.
  • Card issued by The Bancorp Bank, Member FDIC. Card may be used everywhere Debit Mastercard is accepted.
  • Click PayPal Prepaid Mastercard® for additional features & program details, and to request a Card.
★★★★

4.4

Overall Rating

Application Length Interest Rate Reports Monthly Reputation Score
5 minutes N/A (Prepaid) No 9.5/10

A prepaid debit card is similar to a bank debit card, except that a bank account doesn’t fund it. Instead, you load the prepaid card with cash. Otherwise, you can use a prepaid card like a bank debit card to make purchases and withdraw money from an ATM. 

You should pay close attention to fees when choosing a reloadable debit card. The most common charges include a flat monthly or per-use fee, load fees, withdrawal fees, and foreign transaction fees, among other fees. The nice thing about a prepaid debit card is that you won’t have to pay overdraft fees because there is no overdraft privilege.

As with second chance checking, prepaid debit cards don’t check your credit or banking history. Mobile apps support both types of accounts. You can use prepaid cards in ATMs and transfer money to other accounts or people. 

Choose the Second Chance Bank Account That’s Best For You

Second chance bank accounts vary enough to warrant careful comparison shopping before deciding which is the best checking account for you. Find out how much they cost and what services they provide. Your bad credit score or previous branch or online banking problems won’t keep you from getting the best checking account at the best second chance bank.

If you just don’t like banks, consider a reloadable prepaid debit card instead. These nifty little cards offer many of the same services you get from a bank account without worrying about the overdraft privilege or late fees. And just like second chance bank accounts, prepaid debit cards welcome everyone, even financial offenders.

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