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Best Second Chance Checking Accounts of 2022

Katie Stiner

If you’re denied a standard bank account due to a negative banking history, banks will usually relax their standards for a second chance checking account. Some financial institutions charge various fees on these accounts, and it is important to weigh the options carefully. To help you with this process, we’ve evaluated the best checking accounts on fees, minimums, APY, customer service, digital experience, and overall quality.

Fee-free overdraft up to $200 for eligible members*

$0

Monthly Fee

0%

Est. APY

Overview

Chime will not charge you a monthly fee and does not require a minimum balance to avoid maintenance fees.

What we like

  • No maintenance fees
  • Receive deposits up to 2 days earlier with direct deposit*
  • Easy eligibility and quick application process
  • Send paper checks from mobile app
  • Fee-free overdraft up to $200 for eligible members1

What we don't

  • No physical branches
  • No interest on balance

Chime is a financial technology company, not a bank. Banking services provided by The Bancorp Bank or Stride Bank, N.A., Members FDIC.

*Chime SpotMe is an optional, no fee 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.

1Early 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.

Get paid up to 2 days earlier

$0

Monthly Fee

0%

Est. APY

Overview

Current is a financial technology company that provides banking services through Choice Financial Group, a member of the FDIC.

What we like

  • Free overdraft up to $200
  • No hidden fees
  • Fast direct deposits
  • Cashback rewards
  • Easy to use mobile app
  • Get paid up to 2 days earlier

What we don't

  • Savings account APY limited to first $6,000
  • No physical branches

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.

Teen accounts do not earn points

The Annual Percentage Yield (“APY”) for Current Interest is variable and may change at any time. The disclosed APY is effective as of April 1, 2022. No minimum balance required. Must have $0.01 in Savings Pods to earn Current Interest on up to $2000 in deposits per Savings Pod up to $6000 total. Please refer to Current Interest Terms and Conditions

Out of network cash withdrawal fees, third-party, and adding cash fees may apply.

Faster access to funds is based on comparison of traditional banking policies and deposit of paper checks from employers and government agencies versus deposits made electronically. Direct deposit and earlier availability of funds is subject to timing of payer’s submission of deposits.

Please refer to Overdrive™ Features Terms and Conditions.

Earn up to 2% cashback on purchases

$0

Monthly Fee

0%

Est. APY

Overview

The checking account does not charge users any maintenance, ATM, or overdraft fees. Users also earn up to 2% cash back on common everyday expenses and 1% on everything else.

What we like

  • No maintenance fee
  • Easy account management
  • Earn up to 2% cashback
  • No ATM fee
  • Free wire transfers (domestic)
  • Mobile deposit

What we don't

  • No interest
  • No physical branches

1There are no account fees, overdraft fees, annual fees, or transfer fees associated with Rewards Checking accounts. Rewards Checking charges no ATM fees, but third-party institutions may charge you a fee if you use their ATM/network or if you use your Upgrade VISA® Debit Card internationally. Upgrade will rebate any ATM fee charged by another institution for debit card withdrawals in the United States, up to five times per calendar month. To be eligible to receive third-party ATM fee rebates in any calendar month for eligible ATM withdrawals made during that month, customers must have (i) an open Rewards Checking account and (ii) either maintained an average daily balance in their account of at least $2,500 in the prior calendar month or made direct deposits into their account totaling at least $1,000 during the prior calendar month. As a courtesy to new customers, Upgrade will provide third-party ATM fee rebates for up to the first 2 calendar months after account opening regardless of account activity. Some limitations apply. Please refer to the applicable Cross River Bank Deposit Account Agreement and Upgrade VISA® Debit Card Agreement and Disclosures for more information.

2Rewards Checking customers earn 2% cash back on common everyday expenses at convenience stores, drugstores, restaurants, and bars - including deliveries - and gas stations, as well as recurring payments on utilities and monthly subscriptions including phone, cable, TV and other streaming services, and 1% cash back on all other debit card charges. 2% cash back is limited to $500 in rewards per calendar year; after $500, customers earn 1% cash back on all eligible debit card charges for the remainder of the year. Some limitations apply. Please refer to the applicable Upgrade VISA® Debit Card Agreement and Disclosures for more information.

3Upgrade is a financial technology company, not a bank. Rewards Checking services provided by Cross River Bank, Member FDIC. Upgrade VISA® Debit Cards issued by Cross River Bank, Member FDIC, pursuant to a license from Visa U.S.A. Inc. Personal Loans made by Upgrade's bank partners. Personal Credit Lines are issued by Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC, Equal Housing Lender. The Upgrade Card is issued by Sutton Bank, Member FDIC, pursuant to a license from Visa U.S.A. Inc.

Socially-conscious and sustainable financial services

$0 - $7.99

Monthly Fee

3.00%

Est. APY

Overview

Aspiration guarantees that none of the funds is ever used to fund fossil fuel projects or non-environmentally friendly projects. Aspiration’s acute focus on environmentally friendly practices will align with your views if you are environmentally conscious.

What we like

  • Funds socially responsible projects
  • No hidden fees
  • Up to 5% cashback on select merchants
  • User friendly mobile app
  • High APY

What we don't

  • $1000/m spend required to get APY
  • Cashback limited to few merchants

Who needs a second chance checking account?

Past financial mistakes and credit reporting bureaus tend to cause issues for people after they have overextended or made late payments. Getting another line of credit or loan becomes more complicated, with more conditions, red tape, and significantly more expensive.

Similarly, banks have shared access to this type of information from a database of checking accounts through a company called ChexSystems. This company stores information about negative reports on users in their databases for up to five years. A bounced check from four years ago will still be on your checking account record.

People who have had financial difficulties in the past and have made financial mistakes on their record should consider second chance checking accounts to help them get back on their feet. These accounts can help people start fresh and build a new record of financial responsibility and positive banking history, usually at the expense of higher fees and restrictions.

Why you should apply for a second chance checking account?

Even if you managed to get financially stable without using banks, there are benefits to re-entering the banking world. Some of those benefits include:

  • Access to digital payment methods to make electronic deposits or withdrawals.
  • During natural disasters, people who do not have their money in bank accounts run a high risk of it being destroyed, lost, or stolen. Checking accounts offer the safety of having your money stored digitally in an FDIC insured bank account, should anything happen in your area.
  • Removing financial barriers to banking and helping unbanked people build their wealth.

If you are looking to rebuild your credit, a second chance account will not help you. It can only help rebuild your banking history, not your credit score. For that, you may want to look into a secured credit card.

While second chance checking accounts are not able to help rebuild your credit score, it will help boost your credit profile. Many lenders, if not all, will check to see if you have a checking account when applying for a loan for a new home, a new car, to start a business, or to take out a personal loan. Just having the account open will cause the lender to look upon you more favorably.

What to consider before opening a second chance checking account?

A common question that arises when considering this type of account is “are second chance checking accounts worth the hassle?” This is a good question to consider since the terms are less favorable than traditional checking accounts. A better question to ask would be “What am I missing out on by not having a bank account and is that worth more than the costs included with second chance accounts?” Having a bank account makes it easier to live in the modern world. It is becoming harder and harder to pay for big ticket items in cash, not to mention imported items. Even sending a check requires you to have an account for that payment to draw from.

Unlike traditional checking accounts, most second chance checking accounts typically have monthly fees that will not be waived, but it offers consumers a chance to get back on their financial feet. Here are a few factors to consider:

  • It offers the convenience of being able to pay with a debit card versus carrying cash or a prepaid debit card which needs to be recharged anytime funds are low.
  • The overall costs of opening this type of account are less costly than check-cashing services, saving the user money in the long run.
  • Depending on the bank, within six months to a year, you may be able to switch to a standard checking account if you show good banking history.
  • It provides a portal for you to monitor your account online or through your smartphone. Through this service, you can also set up alerts to help you manage your money.

While they do help people who are struggling to get back on their feet, there are downsides to this account. They have more and stricter requirements than normal checking accounts:

  • Some banks require a direct deposit to be set up.
  • Some banks require completion of a qualifying financial management class.
  • Overdraft protection is usually not an option because most people who need this type of account are in this position more likely due to overdrafts in the first place. The bank will want you to demonstrate that you can avoid overdrawing.
  • Depending on the bank, your second chance account may not come with check writing privileges or maybe heavily limited.

Common second chance checking account fees

Second chance checking accounts have a tendency to charge not only more fees, but also higher fees than the standard account. These fees are justified by the banks as a way to mitigate the risks of allowing someone with a poor banking history to hold an account with them.

Typical fees you may find include:

  • Account setup fees
  • Monthly account fees
  • Foreign transaction fees
  • Minimum balance fees
  • Negative account balance fees

Maintain your new banking history

When you have chosen an account that is right for you, you will need to show that you can maintain being financially responsible. Showing a track record of responsible banking can open doors to new opportunities and products that your bank offers. Here are a few tips to help you out along the way:

  • Pay all fees on time: Showing your bank that you are able to pay fees on time consistently will build a positive ChexSystems report.
  • Only use your bank’s ATMs. This will help you avoid ATM fees which can add up over time.

How to choose the best second chance checking account

Here are some factors to look for when choosing a second chance bank account:

  • No or minimal monthly fees: Some banks offer second chance checking accounts with higher monthly fees. If you are looking to save money, be on the lookout for banks that offer lower rates or no fees at all.
  • No minimum balance fees: One of the terms for second chance accounts is having a minimum balance, so the bank can ensure you do not overdraft from your account. Some banks charge a fee whenever your minimum balance falls below the threshold. Be on the lookout for an account with low or no minimum balance fees.
  • Online services such as bill paying: This will make your life way easier when scheduling payments and monitoring your account balances to make sure you are always in the green (and to avoid fees like minimum balance fees).
  • Little to no limits on transaction amounts: Some banks have a limit of transactions you can make with a second chance account, but you can find banks that do not limit this feature.