Written by: Eric Bank
Edited by: Lillian Guevara-Castro
Reviewed by: Ashley Fricker
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 five 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.
Best Second Chance Checking Accounts
We’ve identified 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. Current
- Safe and secure Visa debit card with instant transaction alerts.
- Fee-free overdraft protection of up to $200 with Overdrive™.
- Earn 15x points when you swipe your card at participating merchants, which can be redeemed for cash in your Current Individual account.
- Access 40,000 fee-free Allpoint ATMs in the US.
- Get paid up to two days faster with direct deposit.
- Current is a financial technology company, not a bank. Banking services are provided by Choice Financial Group, Member FDIC.
- See official site, terms, and details.
| Monthly Fee | Minimum Deposit | Minimum Balance | Reputation Score |
|---|---|---|---|
| $0 | $0 | $0 | 7.5/10 |
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.
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.
- Your Chime Checking Account comes with a Chime Visa® debit card, no monthly fees or maintenance fees.
- Avoid out-of-network ATM fees with access to 60,000+ fee-free ATMs¹ — more than the top 3 national banks combined!
- Direct deposits arrive up to 2 days early.²
- Disclosures: Chime is a financial technology company, not a bank. Banking services and debit card provided by The Bancorp Bank, N.A. or Stride Bank, N.A.; Members FDIC, pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa debit cards are accepted.
- ¹Out-of-network ATM withdrawal fees may apply except at MoneyPass ATMs in a 7-Eleven, or any Allpoint or Visa Plus Alliance ATM.
- ²Early access to direct deposit funds depends on the timing of the submission of the payment file from the payer. We generally make these funds available on the day the payment file is received, which may be up to 2 days earlier than the scheduled payment date.
- See official site, terms, and details.
| Monthly Fee | Minimum Deposit | Minimum Balance | Reputation Score |
|---|---|---|---|
| $0 | $0 | $0 | 9.5/10 |
The Chime® Checking Account may be the best second-chance account. 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.
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.
3. GO2bank
- Overdraft protection up to $200 with opt-in and eligible direct deposit*
- No monthly fees with eligible direct deposit, otherwise $5 per month
- Earn up to 7% cash back when you buy eGift Cards in the app
- Get your pay up to 2 days early – Get your government benefits up to 4 days early.*
- High-yield savings account, 4.50% APY paid quarterly on savings up to $5,000.*
- *Terms and conditions apply. Cards issued by GO2bank, Member FDIC, pursuant to a license from Visa U.S.A., Inc. Overdraft fees may apply. Click Apply Now to learn more.
- See official site, terms, and details.
| Monthly Fee | Minimum Deposit | Minimum Balance | Reputation Score |
|---|---|---|---|
| $0 or $5 | $20 | $0 | 8.0/10 |
The GO2bank account is a solid choice for anyone in need of a bank alternative that’s easy to open. We like this card for its early pay and overdraft features, not to mention its generous cash back rewards on gift card purchases and high-yield savings rate.
The issuer of this card has been around for more than two decades, and its cards are available in nationwide retailers. It’s a trusted brand you can rely on to help you get your financial footing.
4. Oxygen
- Earn cash back on select purchases – no points or gimmicks – just real money.
- Create savings goals and make your money grow with Annual Percentage Yields (APYs).
- Get paid up to two days earlier with direct deposit.
- Four Visa debit card tiers to choose from, each with varying costs, rewards, and benefits.
- Oxygen is a financial technology company, not a bank. Banking services are provided by The Bancorp Bank, Member FDIC.
- See official site, terms, and details.
| Monthly Fee | Minimum Deposit | Minimum Balance | Reputation Score |
|---|---|---|---|
| $0 | $0+ (tier dependent) | $0 | 6.0/10 |
Oxygen is an app that supports personal and business bank accounts from Bancorp Bank. It’s an ideal account for businesses with bad credit.
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.
- Get paid up to two days faster with direct deposit.
- Download the mobile app to receive text or email messages with transaction details, deposits, and more. Check to see your balance anytime.
- Enroll in Direct Deposit to enjoy no-fee cash withdrawals of up to $400 a day at participating ACE Cash Express stores.
- Earn 0.01% APY on funds in your Flare Account.
- The ACE Flare Account is established by MetaBank, National Association, Member FDIC.
- See official site, terms, and details.
| Monthly Fee | Minimum Deposit | Minimum Balance | Reputation Score |
|---|---|---|---|
| $5.00 or $9.95 | $0 | $0 | 7.5/10 |
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.
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.
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.
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 for 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 credit reports 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 on 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.
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:
- 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.
| Application Length | Interest Rate | Reports Monthly | Reputation Score |
|---|---|---|---|
| 5 minutes | N/A (Prepaid) | No | 9.5/10 |
- With 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 Netspend Mobile App to manage your Card Account on the go and enroll to get text messages or email alerts (Message & data rates may apply).
- Card use is subject to activation and ID verification. Terms and Costs apply.
- Card issued by Pathward N.A., Member FDIC. Card may be used everywhere Visa debit card is accepted.
- See additional NetSpend® Prepaid Visa® details.
| 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
| Application Length | Interest Rate | Reports Monthly | Reputation Score |
|---|---|---|---|
| 5 minutes | N/A (Prepaid) | No | 7.0/10.0 |
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.
1 Chime SpotMe is an optional service that requires a single deposit of $200 or more in qualifying direct deposits to the Chime Checking Account each month. All qualifying members will be allowed to overdraw their account up to $20 on debit card purchases and cash withdrawals initially, but may be later eligible for a higher limit of up to $200 or more based on member’s Chime Account history, direct deposit frequency and amount, spending activity and other risk-based factors. Your limit will be displayed to you within the Chime mobile app. You will receive notice of any changes to your limit. Your limit may change at any time, at Chime’s discretion. Although there are no overdraft fees, there may be out-of-network or third party fees associated with ATM transactions. SpotMe won’t cover non-debit card transactions, including ACH transfers, Pay Anyone transfers, or Chime Checkbook transactions. See Terms and Conditions.
2 Out-of-network ATM withdrawal fees may apply except at MoneyPass ATMs in a 7-Eleven, or any Allpoint or Visa Plus Alliance ATM.
3 Early access to direct deposit funds depends on the timing of the submission of the payment file from the payer. We generally make these funds available on the day the payment file is received, which may be up to 2 days earlier than the scheduled payment date.
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