An individual is about to write a check to deposit into a checking account.

What is a Second Chance Checking Account?

Those who have been denied a bank account due to a messy banking history don’t have to give up. They can get a second chance checking account. But what exactly is it, and how can it help you? This overview may help you get a new bank account despite your previous history.

Why Would a Bank Close My Bank Account?

Banks can deny applications for new accounts if applicants have a prior banking history that shows a record delinquency. There are several reasons a bank would choose to shut down your account. One reason could be too many overdrafts, although this is uncommon. Most likely, the account holder bounced too many checks or did not pay service fees. Or, the bank may have flagged the account as being suspicious. If this happens, applicants have the option to apply for a “second chance checking account.” These accounts typically come with a debit card, checks, and online banking access.

What is a Second Chance Checking Account?

Sometimes these accounts are called opportunity checking, encore checking, healthy start checking, or second chance checking. Usually, these accounts aren’t free, and they charge a monthly fee which varies from bank to bank. It isn’t the best account offered by a bank or a credit union. However, second chance accounts give the applicant an opportunity to rebuild a good banking history.

What is a Good Second Chance Checking Account?

Before you decide on a second chance checking account, it’s important to look around at each bank. Second chance bank accounts can have different features, and one could be better than others. For example, you may be able to find an account with low or no monthly fees, no minimum balance requirements, free services, or few limits on daily or monthly transaction amounts. Always check the schedule of fees before deciding on an account.

Where Can I Find a Second Chance Checking Account?

Many major banking institutions don’t offer second chance checking. Many community banks and credit unions have them under various names, though. While community banks vary from state to state, Wells Fargo is a major bank that offers this type of account (branded “Opportunity Checking”). This account has free automatic transfers from your checking account and optional overdraft protection, but it does require a minimum $25 deposit to open it.

What If I’m Denied a Second Chance Checking Account?

You still have options if you are denied a second chance checking account. The first of which is a secured credit card. This type of card can also help you rebuild your credit, as long as you pay off the amount at the end of the month. Additionally, prepaid debit cards allow you to shop or pay bills online, although these cards can come with high fees. They also don’t help you build a credit history. Finally, a money order can be safer than cash when paying large amounts, like rent or car loan payments.

Last Updated: May 16, 2017