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How to Apply and Qualify for Second Chance Banking

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Michael Graw
Michael Graw
Jul. 10, 20244 min read
Second chance bank accounts are checking accounts that you may be able to open even if you’ve consistently been denied when trying to open checking accounts at major banks. In this guide, we’ll explain how second chance banking works and review the 3 best second chance bank accounts you can apply for today.

If you’re unable to qualify for a traditional bank account due to a history of overdrafts or unpaid fees, second chance banking can help. Second chance banks offer accounts for individuals that other banks won’t accept after checking their banking history. While 2nd chance bank accounts can sometimes come with higher fees and limited features, they can also give you an opportunity for a financial reset.

In this guide, we’ll explain how second chance banking works and review the 3 best second chance bank accounts you can apply for today.

What is Second Chance Banking?

Second chance bank accounts are checking accounts that you may be able to open even if you’ve consistently been denied when trying to open checking accounts at major banks. Typically, 2nd chance banks either don’t check for past banking issues or are willing to overlook your past history.

Not all banks offer second chance banking, and those that do typically charge more fees than for a typical checking account. Examples include monthly account fees, minimum balance fees, and steep overdraft fees.

Who Needs Second Chance Banking?

Banks look at a variety of factors when deciding whether to approve your application for a new checking account. These can include your credit history as well as your ChexSystems report, which looks specifically at any fees and penalties that banks have assessed on your checking accounts in the past. 

Typically, banks won’t deny your application due to bad credit, but rather for blemishes in your ChexSystems report. Negative marks could result from a long history of overdrafts or from closing an account with a negative balance or outstanding fees.

Importantly, ChexSystems only reports penalties. So, even if you have several checking accounts in good standing, having one troubled bank account may be enough to cause banks to deny your application. And these penalties on your ChexSystems report typically stick around for 5 years.

If you have blemishes on your ChexSystems report or have struggled to open an account, second chance banking may benefit you. Second chance banks give you an opportunity to reset your financial history and demonstrate that you’re worthy of banks’ trust.

You can apply for a second chance bank account in the same way you would apply for any other checking account. Most second chance banks have online applications. The only difference is that you may need to provide more information about your income or submit your transaction history from a checking account in good standing, if you have one.

The Best Second Chance Bank Accounts

Looking for second chance banking online? These are the 3 best second chance banks available today.

Chime

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Chime is an award winning financial app and debit card. Chime doesn’t actually offer a 2nd chance bank account, but it has more lenient requirements for opening a checking account than traditional banks. Chime doesn’t doesn’t check your credit score or ChexSystems report when you apply for a checking account. In fact, the company specifically advertises its traditional checking account to people in search of second chance banking.

Chime’s account is great because it doesn’t come with monthly fees. There’s no minimum balance requirement and no fees if you overdraft your account when you enroll in Chime’s SpotMe program*.

In addition, you get a Visa debit card and access to more than 60,000 fee-free ATMs. You can manage all your transactions from the Chime mobile app and connect your account to Google Pay and Apple Pay.

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

Chime® Chime® Visit Chime

Aspiration

Aspiration

Aspiration* is another online platform that offers checking accounts with no credit or ChexSystems checks when you apply. The company offers both checking and savings accounts with 2 different plans available. The Aspiration plan is free and offers 5.00%APY on the first $10,000 in your savings account. The Aspiration Plus plan costs $7.99 per month ($71.88 per year) and offers 5.00% APY on your first $10,000 in savings. If you’re only looking for a second chance bank account, the free Aspiration plan has everything you need.

What makes Aspiration unique is its environmental focus. Deposits at this bank never go towards loans to fossil fuel companies. You get cash back (3-5% for the Aspiration plan, 10% for the Aspiration Plus plan) when you shop at sustainable businesses that are part of Aspiration’s “Conscience Coalition.” In addition, you can opt in to plant a tree every time you make a purchase.

*The Aspiration checking and savings accounts are cash management accounts offered through Aspiration Financial, LLC, a registered broker-dealer and Member FINRA/SIPC.

Aspiration Aspiration Visit Aspiration

Varo

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Varo* also offers online checking accounts with no credit or ChexSystems check. You can open an account with no minimum deposit and no monthly fees. Your account includes a Visa debit card, access to more than 55,000 fee-free ATMs, and a mobile app to manage your account.

You can also open a savings account at Varo with interest up to 3.00%APY. To qualify for that rate, you must receive at least $1,000 in direct deposits per month, keep a positive savings balance under $5,000, and have a positive balance in your Varo checking account.

*Varo checking and savings accounts are offered through Varo Bank, N.A. Member FDIC. Deposits are FDIC insured up to $250,000.

Varo Bank Varo Bank Visit Varo 

Advantages and Disavantages of Second Chance Banking

The main advantage of 2nd chance banking is that it gives you a way to open a checking or savings account even if you have a blemish in your banking history. 

However, banks with dedicated 2nd chance accounts may have more restrictions or fees. Some second chance banks charge expensive monthly fees and may put limits on the amount you can transact. These accounts also may not come with a debit card or extra features like online bill pay, free ATM access, or interest on your savings account.

Accounts like those at Chime, Aspiration, and Varo are not technically second chance bank accounts. These banks simply don’t look at ChexSystems or your credit score when evaluating your application. They have few significant drawbacks and can be great alternatives to a 2nd chance account.

ProsCons
Offers a way to bank even if you have a troubled checking historyPotentially high monthly fees
Available through some traditional online banking accountsMay have limited features or transaction limits
Overdraft transactions might be denied, preventing further issues


Summary

Second chance banking offers a way to access banking services even if your banking history means you may be denied for a traditional checking account. While some second chance banks charge high fees and put strict limits on your account, you can also find banks that won’t check your ChexSystems report or credit score when you apply.

Chime, Aspiration, and Varo fall in this category. They offer fee-free checking accounts that you can qualify for even if you’ve had issues with banking in the past.


Michael Graw
Written byMichael Graw

Michael Graw is a Bellingham, Washington-based writer focusing on finance, tech, and science. His work has been featured in print magazines and high-impact websites. He writes for BestMoney and enjoys helping readers make sense of the options on the market.‎

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