Financial institutions that offer bank accounts for people with bad credit with overdrafts are becoming more and more prevalent. Until quite recently, it was not unusual for a person to find out that banks will not allow him to open a checking account, but things have changed!
Opening a checking account can still be a daunting task if the customer have trouble maintaining a minimum balance and/ or have repeated overdrafts or NSF (non sufficient funds) notices. Many people struggle with paying outrageous overdraft fees and find it hard to quickly go back to a positive balance. Other people may not be able to get a checking account because of bad credit. Indeed, if you have a bad credit history or a checkered past with checking accounts, you will find it harder to open a checking account. That’s because many banks check the credit agencies to decide whether or not they should let you open an account.
Fortunately, many banks understand that there is a high demand for bank accounts for people with bad credit with overdraft and opening one became easier than it ever was. If you recognize yourself in the title, you should not give up!
GOING BACK TO THE BASICS>> What does overdrawn mean
No Credit Check Bank Account
Most banks will check your credit history before issuing you a checking account. FYI, one of the most common agencies used for this process is named ChexSystems. Banks will look at your record with this agency to determine whether or not you are worthy of a checking account. Fortunately, some banks do not use ChexSystems, like the ones below:
- Axiom Bank
- TD Ameritrade
- United Bank
- Woodforest National Bank
- Green Dot Bank
With these banks, you can get a second chance checking account. Actually, some of them exist specifically for that purpose. They are designed for people who have a long history of overdrafts and low credit scores and even claim that their accounts are developed to help you improve your record.
The down side is that these are not free, but the fees are usually only between $5 and $10 a month. You get the main services you need with these accounts including a debit card, online transactions, and checks. Don’t expect any overdraft protection service, and there is no debit rewards program.
MORE>> How to open a free online checking account with no deposit
Open Bank Account Online
If you feel comfortable managing your banking life completely online, you might want to check out online banks that offer second chance accounts. When we talk about online banks, we refer to banks with no brick-and-mortar locations.
One of the most famous online banks is Chime. Chime offers mobile banking and has been receiving incredible feedback since its inception a few years ago. At Chime, you will get a Visa® debit with no fees. They let you open both a checking and savings account. Be aware, there is no overdraft protection with this bank. On one hand this is good because are you never going to pay overdraft fees, on the other hand, you won’t be able to get that extra cash if you need it. You can also sign up for their automatic savings, which will put 10% of your deposits into savings. It will also round the amount of your purchases up, and put the change in your savings account.
Another relevant bank is Peoples Cash Solutions, which provides Second Chance accounts. You get a checking account (which you can use for electronic deposits from your employer for example), a MasterCard debit card and even a checkbook, which apparently many people still prefer rather than carrying cash. With this account, you can do money transfers, pay your bills online and do other banking online similar to many banks out there.
Last but not least, another interesting bank is CheckGain. It provides accounts to people who have bad records with ChexSystems and other credit scoring companies. This account is 100% free and you can apply online fairly easily. While there is no maintenance fee charged to your account every month, you do need a $25 beginning deposit to start your account. Don’t worry, there is no minimum balance penalty. Oh and you get fee-free withdrawals at ATMs, too.
Tip: If you have a poor record, your current bank may give you another account with tighter restrictions. This will save you the trouble of opening an account at another bank. Just give it a try – go to your bank and ask.
Guaranteed Bank Account
As you must know, there is no such a thing as 100% guarantee in this world, but the banks listed here offer bank accounts to people who have been rejected by other banks. These bank accounts are designed to help people get back on their feet, giving them a chance to open accounts for any type of transactions: electronic, check, deposits and debits.
Sometimes you don’t even need to change banks. Your current bank may offer this type of account. Just ask! If your account has been closed, check to see if your bank will let you have one of these second chance accounts. If they don’t, check out the banks we listed here, as there is a great chance that they will let you open an account. Once you have rebuilt your reputation and credit score, you will be given the chance to upgrade to a regular checking account with more services available.
HSBC Basic Bank Account
One bank account that offers all of the options mentioned here, plus optional overdraft protection, is HSBC. You get access to their online banking platform, a free debit card with no fees for a monthly service fee of $3 – with no minimum balance. The real advantage here is that HSBC is a renown international institution. Having a checking account there might let you gain access to other services that might not be available at newer, younger and smaller banks.