Making a fresh start – Forbes Advisor

Sometimes in life we ​​all need a second chance. What if you could make a fresh start to rebuild your banking history?

If you’ve ever struggled with getting a bank account due to your negative bank record, consider starting over with a second chance bank account. Second Chance Banking can help get your financial life back on track.

What is the Second Chance Bank?

Second Chance Bank Accounts are individual accounts offered at some banks and credit unions to help people with troubled banking histories. These could be people who have had their bank accounts closed in the past, possibly due to overdrafts, unpaid fees, or other issues.

Indeed, as a customer of a bank, if you do not manage your account responsibly, you could find yourself in a situation where the bank decides to close your account. Having an account closed due to bank errors (excessive overdrafts and unpaid fees, for example) can put you on a list at ChexSystems. ChexSystems is a bank account control agency (CRA) that keeps your name on file for up to five years as a high-risk bank customer.

If your request to open a bank account was denied due to poor history on your ChexSystems report, you may consider opening a second chance bank account.

How does second chance banking work?

Second Chance bank accounts are usually checking accounts, although some banks may also offer Second Chance Savings Accounts. These accounts offer many of the same features as regular checking accounts (direct deposit, debit cards, ATM access, mobile apps, and check writing privileges), but with different fees, account rules and limits. as to how you can use them.

Second Chance accounts serve as probationary accounts, helping people rebuild their banking history and restore their reputation as a good, low-risk customer, much like a secure credit card can help people rebuild their credit history.

Why should people use second chance bank accounts?

Millions of Americans do not have a bank account. According to the latest data from the Federal Deposit Insurance Corporation (FDIC), in 2017, 6.5% of US households (8.4 million households) were “unbanked”. Suppose you are currently unbanked or underserved by the banking system. In this case, a second chance bank account can help move away from check cashing services, prepaid cards, or other non-bank financial services.

Opening a second chance bank account is a good decision for several reasons:

1. It offers security for your money. FDIC protect your money against bank failure, up to $ 250,000 per depositor for each category of qualifying property.
2. Check cashing services charge high fees. Depending on where you cash a check, you may need to pay a fee of a few dollars or a percentage of the total value of the check. It’s money you lose on every paycheck before you even start paying your bills. Compared to these fees, a second chance checking account may have comparable or lower costs for managing your money.
3. Prepaid debit cards do not help you create credit. Another choice that people tend to use if they can’t qualify for a checking account is to load money onto a prepaid debit card. However, these cards will not help you develop your credit. If you want to build a credit history, you will be best served to get a bank account and use it to make on-time payments on loans or credit card bills.

Second Chance bank accounts can help you protect your money, avoid expensive fees, and build a banking history.

Which banks offer second chance bank accounts?

There are several large national banks and online banks that offer second chance bank accounts. These accounts can also be referred to as “opportunity” or “fresh start” accounts.

Here are some national banks that offer second chance bank accounts:

Wells Fargo Opportunity Check

Described as ideal for clients who are “unable to open standard accounts due to their credit or banking history”.

• Minimum opening deposit: $ 25
• Monthly service charge: $ 10 (you can avoid these charges by maintaining a minimum daily balance of $ 1,500, making monthly direct deposits of at least $ 500 or more, or completing 10 or more debit card transactions per month)
• Platinum debit card
• Wells Fargo Online Banking
• The Wells Fargo Opportunity Savings account is also available. It logs into the Opportunity Checking account for optional overdraft protection.

Essential Radius Bank Check

Described as “a second chance checking account that can give you a financial fresh start” and “better than a prepaid card”.

• Monthly service charge: $ 9
• Daily debit card limit: $ 500
• Mobile check deposit limit of $ 1,000 per day
• After 12 months of positive banking history, you may be eligible to upgrade to a Rewards Checking account

Carillon

Described as “bank without credit check” and prominently mentions “no ChexSystems”.

• Overdraft free of charge up to $ 100 per debit card transaction for eligible members
• Get paid up to two days in advance with direct deposit
• Increase your savings automatically with roundup tools
• No minimum balance required, no monthly service fees

GoBank

First launched in Walmart stores, GoBank isn’t explicitly titled as a Second Chance Bank Account, but they don’t use ChexSystems or credit checks to determine customer eligibility.

• Monthly fee of $ 8.95 (fees waived with direct deposit of monthly payroll or government benefits of $ 500)
• No overdraft fees
• Free budgeting tools
• Get paid early, up to two days before payday, with ASAP direct deposit

Regional and local community banks and credit unions may also offer second chance accounts, depending on your location. Details will depend on the services and features available in your state. You can use YourMoneyFurther.com to locate credit unions in your area.

Getting a second chance bank account isn’t just about having a safer place to deposit your paycheck. It’s about creating a stronger financial foundation for your life. Second chance accounts from banks and credit unions provide security and the ability to rebuild your banking history. With an account at a bank or credit union, your money is protected against loss or theft, and you have better options for making your money work for you.

Don’t miss out on the opportunities and benefits of a bank account. Whatever your past banking mistakes, there is always hope for a better financial future.