Can Second-Chance Checking Help You?

Second-chance checking accounts were made for people whose credit or banking histories keep them from getting approved for standard bank checking. These second-chance accounts can help people rebuild their financial histories while also providing the basic necessities for building savings and paying bills. Three of the top second-chance checking accounts are offered by Wells Fargo, Bank of America and Green Dot Bank. People who apply for second-chance checking accounts should be prepared for more banking fees and restrictions -- in some cases, financial institutions may ask applicants to enroll in money management classes. Cash deposits and withdraws may have longer wait periods while banks verify account balances. However, having a second chance checking account usually beats out having no account at all. Interested in second-chance bank accounts? Read on below to learn about popular facts and misconceptions and get more information.

8 Active Myths | Suggest a Myth
FACT: Second-chance accounts are more easily found at smaller banks and credit unions.

Although some large banks do have options for people with bad credit, most second-chance checking accounts can be found through smaller regional banks and credit unions. Don't be discouraged if you can't find an account right away. You might need to visit a few new banks to find the plan that's best for your needs.

FACT: Second-chance checking accounts get online banking access.

Online banking is the way of the future. Not only do most banks have robust Web portals, but many banks also offer comprehensive mobile apps that let people handle deposits, transfers and bill pay from their smartphones. When comparing second-chance checking accounts, be sure to focus on banks with good online banking opportunities.

FACT: Second-chance checking account holders can still use ATM machines.

What good would a checking account be if you couldn't easily access your money? Different second-chance accounts may have limits on what you can do at the ATM machine, but account holders are usually able to accomplish most of their needs from ATMs throughout the country.

MYTH: Second-chance checking accounts have no monthly service fees.

A downside to second-chance checking accounts is most require a monthly service fee. These fees vary from bank to bank, and there's often no way to remove these charges. Banks charge these fees to offset some of the financial risk of taking on people with bad credit histories. If you can maintain a clear financial history, then you can eventually get a standard checking account and possibly get monthly service fees waived.

FACT: You can eventually upgrade from a second-chance account to a standard checking account.

People who open second-chance checking accounts can eventually get regular check accounts as long as they make good financial decisions. That means paying off debts, paying bills on time and not running up any additional credit balances. Also, keeping a clear history with the bank will also help.

MYTH: All second-chance programs require participation in money-management classes.

Some programs require account holders to take financial classes, but many do not. That said, don't be so quick to refuse an account simply because of the class requirement. Even people with good credit histories can often learn a thing or two about budgeting from these informative sessions.

MYTH: You can't overdraft on a second-chance checking account.

Second-chance checking accounts are set up so that committing overdrafts is more difficult. However, it's still possible, and people who overdraft their accounts are still subject to fines. There may be certain accounts designed to block overdrafts, but avoiding overdrafts is essential for people who are serious about rebuilding their credit.

MYTH: Payday loans give more freedom than second-chance checking accounts.

Payday loans aren't the answer for people who need cash. In fact, high-interest loans such as payday loans often cause people to get in financial trouble, which leads to only being eligible for second-chance accounts. Second-chance checking accounts allow for plenty of freedom for accessing your funds, and the low monthly service fee is almost always less expensive than the high interest you'll pay on any payday loan.