Making mistakes with money is easy to do if you don’t know how to handle it correctly and sensibly. Basically a 2nd chance checking account is a last chance option for people who have been denied a regular checking account because of an undesirable banking history.
Nowadays the age of people opening their own bank accounts is lower than ever. There are a lot of promotions such as banks with free checking accounts that attract people. While this may seem like a good thing, perhaps more people are working or trying to save money rather than spend, it is a disaster waiting to happen until those people have the right knowledge about how to successfully operate a checking account. Simple financial sense is not taught in schools, it is something we usually learn from our parents or caregivers. This is why so many young people fall victim to the same financial traps their parents have. Through time and experience we learn more about handling money.
If a person is to regularly miss loan repayments, credit card repayments, dishonor checks or have their account constantly overdrawn with no overdraft facility then they run the risk of being reported to ChexSystems. Most major banks in the United States are members of the ChexSystems group, they can each lay reports about a customers undesirable banking history with ChexSystems which is usually held on file for around 5 years. This means if you try to apply for any bank accounts or loans in the next 5 years your checkered banking history will rear its ugly head and likely prevent you from getting what you want. So within the next 5 years you may have little other option than to apply for a second chance checking account with a financial provider or bank.
There may be some providers who are not members of ChexSystems and/or will not complete a credit check before opening an account for you. While this may seem easy, you will end up paying for this convenience. High account fees, account restrictions and strict contracts may be lurking behind the seemingly great offer.
The major banks that are members of ChexSystems do sometimes offer 2nd chance checking account options, but not always. As with those other providers you may find you have more restrictions on your checking account than you normally would, but this is their only form of protection as you have proved to be an unreliable customer. Sticking with a major bank and working hard at maintaining your account as per their instructions for 6-12 months may mean you can have some of those restrictions lifted, or perhaps have a regular checking account once again. They simply want to see you improve your financial behavior – for their benefit and yours.
When choosing a provider for your 2nd chance account make sure it is a bank or provider you trust and that has a good reputation. Avoid unknown providers who promise the world, these are often traps than will put you in a worse position than you are already in. Speak to the banks customer service department before signing up with them; ensure they are knowledgeable and helpful. If possible get a range of offers from different banks and providers so you can make comparisons and ultimately make the most informed decision.
Try not to get too disheartened when you have been denied a regular checking account. Know that there are options available to you and that there are many banks and providers out there willing to offer you a 2nd chance checking account. If may be difficult and feel restrictive at the beginning but these accounts are designed that way to ensure you don’t make the same mistakes you have in the past. This ‘tough love’ is ultimately the best way to get you back on track financially and help you get back to your regular bank accounts once again.