If you’ve had a negative history with checking accounts or have had your account applications denied, it may be easy to feel discouraged moving forward. Did you know there’s an opportunity for a second chance to build or rebuild that history? We’ve got the information on second chance checking accounts to help you get started.
What is a Second Chance Checking Account?
A second chance checking account is a bank account that is available for those unable to qualify for a traditional checking account. The requirements to get an approval on a second chance checking account are lower, making it easier to access for those who may have a negative history to qualify.
Why Should You Open one?
Opening a second chance checking account can be a great opportunity for rebuild your checking account history. If you’ve made financial mistakes and you have a checking account history where you’ve closed an account with a negative balance or unpaid, outstanding fees, you’ll likely find it difficult to qualify for a traditional checking account.
Like the name suggests, these second chance checking accounts can provide you with a second chance to prove your financial responsibility. While there are limitations and restrictions to this type of checking account, this will enable you to store your funds in a safe place. As you start to build a positive history with this account, you’ll find that over time it may improve your credit score or ChexSystems history.
What Are the Limitations?
Generally, second chance checking accounts are a more basic, restricted version of a normal checking account. The financial institution adds these restrictions to help meet your needs while minimizing the risks for you and for them. By scaling the account back to the most basic usage, it can help you avoid financial mistakes, extra fees, and overdrafts.
The limitations of the account will depend on the financial institution, but you may find:
- Monthly maintenance or service fees
- Lower limits for withdrawing and depositing funds
- ATM fees for our-of-network ATMs
- No overdraft and/or fees for any overdrawn transactions
- Unable to write checks for the account
If you’re struggling to qualify for a checking account, it may be time to explore the opportunities provided by second chance checking accounts. Knowing the benefits and limitations can now help you as you choose an account that works for you.