Which banks offer second chance checking accounts

Chime, LendingClub, Varo, GoBank, and NetSpend all offer checking accounts designed for people with banking history problems. Most traditional banks—Chase, Bank of America, Wells Fargo, Citibank—do not. The difference is that second chance accounts skip the ChexSystems check, which is the banking industry's record of closed accounts, overdrafts, and fraud. If you appear in ChexSystems with negative marks, mainstream banks will reject you. Second chance banks either don't use ChexSystems at all or use it but overlook certain marks.

The catch is that second chance accounts usually charge monthly fees ($5 to $15), have lower spending limits, and offer fewer features than standard checking. Some require you to set up direct deposit to waive the monthly fee. Others charge per transaction or per overdraft. You need to read the fee schedule carefully, because the savings from avoiding rejection can disappear into monthly charges.

A few credit unions also offer second chance checking, but you have to find one in your area or one that accepts online membership. The CO-OP Network and Allpoint ATM networks can help you locate branches and surcharge-free ATMs if you open an account with a smaller institution.

Key Takeaways

  • Online banks like Chime and Varo skip ChexSystems checks entirely, making them the fastest route if you have banking history problems.
  • Second chance accounts charge monthly fees ranging from $5 to $15, and many waive the fee only if you set up direct deposit.
  • Traditional banks (Chase, Bank of America, Wells Fargo) use ChexSystems and will reject you if you have negative marks; second chance banks do not.
  • Some credit unions offer second chance checking, but availability depends on your location or whether they accept online membership.

How ChexSystems affects your banking options

ChexSystems is a consumer reporting agency that tracks banking behavior. When you close an account with an overdraft, bounce checks repeatedly, or commit fraud, the bank reports it to ChexSystems. The record stays for five years. When you try to open a new account at a bank that uses ChexSystems—which is most of them—they pull your report. If you have marks on it, they deny you.

You can request your ChexSystems report for free at chexsystems.com. The site has a link to order your report by mail or phone. You get it within 30 days. If there are errors on it, you can dispute them directly with ChexSystems or with the bank that reported the information. Disputes take 30 to 45 days to resolve.

Second chance banks either don't subscribe to ChexSystems or they subscribe but make lending decisions without checking it. This is why they can open an account for you even if you have a history of overdrafts or closed accounts. The trade-off is that they charge more in fees and offer less in features.

Online second chance banks and their fee structures

Chime charges no monthly fee if you set up direct deposit. Without direct deposit, there is no monthly fee either, but you get fewer features. Overdrafts up to $20 are covered at no charge if you have direct deposit; beyond that, you pay $34 per overdraft. Chime uses the Allpoint network for surcharge-free ATM access.

Varo charges no monthly fee and no overdraft fees if your account stays in good standing. You get up to $20 in overdraft protection. Varo requires direct deposit to unlock some features, but the account itself is free. ATM access is through the Allpoint network.

LendingClub charges $9.99 per month unless you set up direct deposit, which waives the fee. Overdrafts cost $35. The account comes with early direct deposit, which can put your paycheck in your account up to two days early.

GoBank charges $7.95 per month. There is no direct deposit requirement to waive it. Overdrafts cost $35. GoBank is owned by Green Dot and uses the MoneyLion network for ATM access.

NetSpend charges $9.95 per month or $19.95 per month depending on the account tier. Overdraft fees are $35. NetSpend also offers prepaid card options if you want to avoid a checking account structure altogether.

Credit unions with second chance checking

Credit unions are nonprofit institutions owned by their members, and many have looser underwriting standards than banks. Some credit unions offer second chance checking without ChexSystems checks. The problem is finding one that serves you. Credit union membership is usually restricted by geography, employer, or membership in a specific organization.

The National Credit Union Administration (NCUA) maintains a directory at ncua.gov. You can search by zip code to find credit unions near you. Call and ask whether they offer second chance checking and whether they use ChexSystems. Some credit unions will open an account for anyone in their field of membership, even if you live out of state.

A few online credit unions accept members nationwide. Connexus Credit Union and Pentagon Federal Credit Union both have minimal membership requirements and offer checking accounts without ChexSystems checks. Fees are typically lower than online second chance banks—often $0 to $5 per month—but you need to verify current terms before opening.

What to look for when comparing second chance accounts

Start with the monthly fee and whether direct deposit waives it. If you receive a paycheck by direct deposit, a $0 monthly fee account saves you $60 to $180 per year compared to one that charges $5 to $15 monthly. If you don't have direct deposit, the fee is permanent, so pick the lowest one you can find.

Next, check overdraft fees and overdraft protection limits. Some accounts cover small overdrafts ($20 or less) at no charge. Others charge $35 per overdraft. If you live paycheck to paycheck, overdraft protection matters more than a slightly lower monthly fee. An account that charges $15 per month but covers $20 overdrafts might cost less over a year than one that charges $5 per month but charges $35 per overdraft.

Third, verify ATM access. If the bank uses Allpoint or CO-OP, you have thousands of surcharge-free ATMs nationwide. If it uses a smaller network or charges per out-of-network withdrawal, your actual cost per month could be higher. Look for an ATM locator on the bank's website and check whether there is one near your home or work.

Finally, ask whether the account reports to the credit bureaus. Some second chance banks report positive payment history to Equifax, Experian, and TransUnion. If yours does, building a clean history with the account can improve your credit score over time. This is not may provide—ask the bank directly before opening.

Steps to open a second chance checking account

Most online second chance banks let you open an account in 10 to 15 minutes on their website or app. You will need your Social Security number, a government-issued ID, and a phone number. Some ask for proof of address, which can be a utility bill, lease, or bank statement. A few require an initial deposit, usually $25 to $100, though many waive it.

If you are opening with a credit union, you may need to visit a branch in person or complete a membership application before opening the account. Some credit unions require proof of membership in their field—for example, employment at a specific company or residence in a specific county. Call ahead to confirm what you need.

After you open the account, set up direct deposit if the bank waives fees for it. You will need your routing number and account number, which the bank provides immediately after opening. Give these to your employer's payroll department. Direct deposit usually takes one to two pay cycles to activate.

What to do if you are denied by a second chance bank

A few second chance banks will still deny you if your ChexSystems record is severe—for example, if you have an active fraud case or owe money to a bank. If this happens, ask the bank why you were denied. They are required to tell you. If ChexSystems is the reason, request your report and look for errors. If there are errors, dispute them.

If your record is accurate and severe, consider a prepaid card instead. NetSpend, Green Dot, and Walmart MoneyCard all offer prepaid accounts that function like checking accounts but don't require a bank to approve you. You load money onto the card, and you can use it to pay bills, receive direct deposit, and withdraw cash. Fees are similar to second chance checking—$5 to $15 per month—but there is no underwriting.

Another option is to ask a family member or trusted friend to add you as an authorized user on their account. This does not build your own credit history, but it gives you access to a checking account while you wait for your ChexSystems record to age off (five years from the negative mark).

Frequently Asked Questions

Will opening a second chance checking account hurt my credit score?

Opening a checking account does not affect your credit score because it is not a credit product. Second chance banks do not pull a hard credit inquiry. However, if the bank reports your account activity to the credit bureaus, maintaining a clean history with the account can help your score over time.

Can I switch to a regular bank account after opening a second chance account?

Yes. After six months to a year of clean account history with a second chance bank, you may be able to open a standard checking account at a traditional bank. Your ChexSystems record will still exist, but some banks overlook older marks if your recent history is clean. Call the bank and ask whether they consider accounts older than one year.

What if I don't have a Social Security number?

Most banks require a Social Security number or ITIN (Individual Taxpayer Identification Number) to open an account. If you have an ITIN, you can use it instead. If you have neither, some credit unions and prepaid card providers may work with you, but options are limited. Contact your local credit union directly to ask.

Do second chance banks report to credit bureaus?

Some do, some don't. Chime and Varo report to the credit bureaus if you maintain good standing. LendingClub, GoBank, and NetSpend do not always report. Ask the bank directly before opening whether they report account activity to Equifax, Experian, and TransUnion.

How long does it take to get my debit card?

Most online banks issue a debit card within 7 to 10 business days. Some offer a temporary digital card you can use immediately while you wait for the physical card to arrive. Credit unions may issue cards in-branch the same day or mail them within a week.