Have you just been denied a checking account? If so, it may be time to look into banks that offer second chance banking. Chances are that you will be able to open a second chance checking account that allows you to enjoy almost all the benefits of a regular account for checking.
What Happened To Sarah Is Happening To Many
A number of years ago, I had a co-worker named Sarah who always cashed her bi-monthly paychecks at a retail cash checking store. The transaction fee was a hefty $ 30 each time. Although it was a small amount compared to the overall paycheck, it's still a good amount that could be better spent of other things or else saved up to a really nice sum of cash at the end of the year.
Curious, I asked her why she did not just get a bank account and direct deposit, so she can save on those crazy fees. It turns out that she had just moved from another city and closed her previous bank account with fees owed to the bank. That gave her a record in the ChexSystems, and the local bank here did not want to open a new account for her.
Being new to the city and served this denied checking account drama, she was at a loss on what to do. So off she went the expensive route of using a check cashing store instead, for something like 6 months, before I intervened. Long story short, shortly afterwards, she was able to get an account with a bank that offered second chance banking.
Second Chance Checking Accounts – What Are They
Second chance checking accounts are for people who have been denied a checking account the regular way. The availability and use of these accounts are probably a lot more prevalent than most people are aware. Most are people like Sarah who got entangled in a bad situation and then thought that they have done something so bad that they will not be given another chance for a long time.
ChexSystems is like a consumer reporting agency for checking account activities. They are similar to what Equifax or Experian are for credit history but they focus only on keeping records of bank account related activities. If you had closed an account with an outstanding overdraft fee, that information will be reported to your ChexSystems file and shared with other ChexSystems member banks.
Getting An Account
Some banks have policies that deny a new account to you if they see the negative record on your file. However, there are many others that will either offer you a second chance account, or else a regular account even, depending on a case by case basis. What you need to understand is that ChexSystems is just an information system, and the banks have policies in place on whether of not to open an account for someone with a ChexSystems record.
Many times, it is also a case by case basis and the branch manager has the authority to make a final decision. Some banks are also more lenient than others in how they approach this. Overall, unless the bank has a tough policy to deny anyone with even the slightest ChexSystems flag, you still stand a chance. Especially if you present a coherent case, and are able to demonstrate that you are a reliable customer, chances are good that your application will be accepted.
So don't let the case of a denied checking account keep you down. Cast your net wider. Take some time to research online, consider smaller banks or credit unions. You will find banks that are open and willing to work with you.