From using the ATM to having access to direct deposit, almost everyone needs a checking account, but if you have bad credit or poor credit history, you might find it difficult to open an account with a bank. We’ve researched more than 50 different banks, and Chime is the best checking account for bad credit for most people. A lot of checking accounts for bad credit ding you with unnecessary fees, but our picks offer plenty of perks with minimal fees.
- No monthly service fee
- Free account opening
- 24/7 mobile banking
- Over 60,000 fee-free ATMs
In our research, Chime stood out for its award-winning mobile app and debit card, which is available with no credit check. Some of its biggest benefits include no minimum payment required to open an account, no required minimum balance, and no maintenance or overdraft fees. Chime does get mixed reviews for being an online-only platform, so if you’re looking to visit a branch to get your banking done, you may want to look elsewhere.
Current is an online banking solution with a great mobile app and they feature a cash-back rewards program. They also offer 4.00% APY on up to $6,000, and they offer no-fee withdrawals at more than 40,000 Allpoint ATMs in the U.S. Current doesn’t charge overdraft fees, and they allow customers to overdraw their accounts by up to $200. However, making a cash deposit with Current will incur a fee of $3.50 per transaction.
We like CIT Bank (now part of First Citizens Bank) for its no monthly fees on checking accounts, and it’s solid reates on their money market and high-yield savings accounts. However, they do have higher minimum deposits for their checking account, and they do not offer a free ATM network.
Best Checking Accounts For Bad Credit
No monthly service fee
Free account opening
24/7 mobile banking
Over 60,000 fee-free ATMs
No minimum opening deposit or maintenance fees
No credit check or ChexSystems
Overdraft up to $200 without any overdraft fees
Get paid up to 2 days early
No monthly fees or overdraft fees
0.40% APY (if requirements are met)
No ATM fees
Unlimited withdrawals via mobile app
Chime isn’t a “bank”—it doesn’t have any physical locations, so you can’t drive to your neighborhood branch and make a deposit.
However, it’s a fully functional online and mobile financial app with all the typical financial features to help you manage your money on the go. Chime is also FDIC insured through The Bancorp Bank or Stride Bank, N.A., Members, so your money is protected.
- There is no minimum payment required to open an account and no required minimum balance˜.
- No maintenance or overdraft fees˜.
- Use the Chime app to send money or deposit checks directly into your account.
- Chime doesn’t use ChexSystems, so your bad banking record won’t stop you from opening an account.
- If you set up your Direct deposit ˆ for your paycheck, Chime allows you access to your money up to two days sooner than traditional banks.
- They also offer a fee-free overdraft up to $200* with their feature – SpotMe®.
- No foreign transaction fees.
- No physical branches, so customer service is only available through the app, by phone, or through email.
- $2.50 fee˜ for out-of-network ATM withdrawals.
With over 300,000+ five-star reviews in app stores, Chime seems to be a hit with customers. Many users praise the ease and convenience of being able to open a checking account online instantly.
Current doesn’t charge any fees for the service, and it allows customers to make fee-free withdrawals anywhere that accepts debit cards.
We like that it provides access to more than 40,000 ATMs nationwide and gives customers the ability to easily send payments via ACH transfer or their debit card.
Current offers the option to link an existing savings account to the current checking account, and it comes with a rewards program where customers can earn points by using the debit card at select retailers and redeem those points for cash or other items.
- Stellar interest rates of 4.00%.
- No fees for direct deposits and ATM withdrawals.
- Cash-back rewards programs.
- No phone-based customer service.
- No free checks.
#3. CIT Bank
CIT Bank is an online-only bank owned by CIT that is entirely digital and offers savings, checking, and loan products. Launched in 2011, CIT Bank offers a wide array of banking products completely online as the bank does not have any physical locations or their own ATMs, though they do offer free access to a nationwide network of ATMs.
- No monthly fees
- 0.40% APY (if requirements are met)
- Fully online bank
- $100 initial deposit required
- No physical branches (customer service is only available through the app, by phone, or via email)
Although CIT Bank has a relatively high minimum deposit ($100) to get started, it offers one of the best interest rates among online banks and has no opening, monthly servicing, online transfer, or incoming wire fees.
BBVA has nearly 650 branches located in Texas, Alabama, Arizona, California, Florida, Colorado, and New Mexico. It also offers online banking in all 50 states.
As one of the top 25 largest commercial banks in the country, BBVA is one of just a handful of major banks that offers a second-chance checking account program. Its size and market share are a plus for account holders, as its banking network offers more than 55,000 free ATMs around the country.
- Get unlimited check writing, mobile deposits, online bill paying, cashback rewards, and the option for a Visa debit card.
- $25 to open an account.
- Opportunity to upgrade to a regular consumer checking account with no monthly fee after one year.
- Member FDIC.
- Monthly Service Charge of $13.95.
- $3 ATM charge when you bank out of network.
- $38 insufficient funds fee.
- $15 deposit item returned fee.
Although BBVA has a $13.95 monthly service charge for its second chance checking account, you can upgrade to a free checking account after one year.
Owned by Green Dot Bank, GoBank is a mobile-only bank that lets you open a checking account without a credit check or ChexSystems report. Although there are no physical locations, GoBank has an impressive number of in-network ATMs.
- Checking accounts come with a free debit card.
- Mobile banking.
- Overdrafts aren’t permitted, so you don’t have to worry about overdraft fees.
- Avoid $20 minimum deposit and $2.95 sign-up fee by opening your account online.
- $8.95 monthly fee unless you make monthly direct deposits totaling $500.
- $3 fee for out-of-network ATM withdrawals.
- $5 fee if you lose your card and need a replacement.
- Cash deposits at participating retailers can cost up to $4.95 per deposit.
While there are no physical branches, GoBank offers in-person deposits at places like 7-11 and Walmart. However, the downside is these stores charge up to $4.95 per deposit.
Founded in 2000, Axos bills itself as the “oldest and most trusted digital bank” in the country. While it has some physical locations in California, it’s mostly a digital bank.
Axos offers a number of different checking accounts, including a second chance checking account.
- Overdraft protection available for a fee.
- Option to open a second chance savings account along with your checking account.
- Mobile banking.
- Minimum $50 deposit to open an account.
- $6.95 monthly maintenance fee when you have a regularly scheduled direct deposit. This fee goes up to $8.95 without a regularly scheduled direct deposit.
- No interest on checking accounts.
- Daily limits on debit card transactions, including a $310 limit on ATM cash withdrawals when you use your ATM card.
#7. Wells Fargo
Wells Fargo calls its second chance checking account the Opportunity Checking account. Account holders enjoy mobile banking and low fees.
As long as you maintain a certain monthly balance or set up a minimum number of direct deposits, the Opportunity Checking account amounts to a free online bank account.
- Make free transfers between your Wells Fargo checking and savings accounts.
- Overdraft protection available for a fee.
- Free ATM withdrawals at over 13,000 Wells Fargo ATMs around the U.S.
- Option to convert to a standard checking account after one year.
- Minimum $25 deposit to open an account.
- $10 monthly fee unless you keep your daily balance at or above $1,500 or you receive direct deposits totaling $500 each statement cycle.
According to the Wells Fargo website, the bank has 5,400 branches throughout the country, making it a good option for people who like the convenience of visiting a physical location.
Aspire Federal Credit Union has a version of a second chance checking account called Fresh Start Checking. To qualify, however, you’re required to direct deposit 100 percent of your paycheck into your account each month.
- No monthly maintenance fee.
- Free debit card linked to your account.
- Large network of over 70,000 ATMs, with no fees as long as you stay in-network.
- Required to direct deposit your entire paycheck.
- Can’t have any fraud history in your banking record.
#9. First American Bank
First American Bank has branch locations in Illinois, Florida, and Wisconsin, as well as ATMs around the country. It also offers a Fresh Start Checking account for people with bad credit.
- Mobile and online banking.
- 55,000+ in-network ATMs around the country.
- Free check imaging with your online account.
- Unlimited check writing.
- No minimum monthly balance required.
- Minimum $50 deposit to open an account.
- $9.95 monthly maintenance fee.
#10. Bank of America
Bank of America offers a variety of checking accounts, including a second chance account called the SafeBalance Banking® Account.
- Large network of participating ATMs.
- Overdrafts are automatically declined, so you don’t have to worry about incurring overdraft fees.
- Same-day cash, wire, and direct deposit transfers.
- Mobile check deposits.
- $25 minimum deposit to open an account.
- Can’t write paper checks.
- $4.95 monthly maintenance fee.
- $2.50 fee per transaction at out-of-network ATMs.
#11. Peoples Bank
Peoples Bank is based in Texas, but it offers online banking to customers in all 50 states. It also offers an option to upgrade to a regular checking account after one year.
- Online banking as well as paper checks.
- Free Mastercard debit card linked to your account.
- No ATM fees as long as you stay in-network.
- Minimum $30 deposit to open an account.
- $4.95 monthly maintenance fee.
- $2 fee per transaction at out-of-network ATMs.
- $27.50 overdraft fee.
- $20 fee if you close your account within 90 days of opening it.
#12. Radius Bank
Radius Bank offers a second-chance checking account called Essential Checking. Account holders can also upgrade to a Rewards Checking account after one year.
- No minimum balance required to open an account.
- 1% cash back on purchases.
- $9 monthly maintenance fee.
- $500 daily debit card limit.
- $1,000 daily mobile check deposit limit. The mobile check deposit limit is $2,000 per 10 days.
- $5 overdraft fee assessed each day account remains overdrawn.
What Is a Second Chance Checking Account?
Bad credit can make it tough to get approved for a checking account. On the other hand, not having a checking account often means getting hit with extra costs every time you need to cash a check or pay a bill.
So what are you supposed to do? Are you trapped in a Catch-22 of questionable banking history and hefty fees?
This is where second-chance checking accounts come in.
Banks know that people aren’t perfect, and many of them offer checking accounts designed specifically for people who need to rebuild their banking records.
If your banking history has a few speed bumps and blemishes, a second-chance checking account can be a great way to get back on track. In most cases, banks that offer second-chance accounts also offer an option to upgrade to a regular account after a certain period of responsible use.
However, second-chance checking accounts can have their downsides. For example, some come with high monthly maintenance fees, and you might have a difficult time finding a physical branch location.
Despite potential drawbacks, second-chance checking accounts can be an excellent opportunity to get your banking record back in shape.
How Does A Second Chance Bank Account Work?
A second chance checking account is similar to any other checking account. You can deposit checks, write out physical checks, withdraw cash at ATMs, and pay bills using the account. However, if you do not have enough funds in your account, you’ll be unable to access those services until you’ve paid off your overdraft fees.
Some second-chance accounts offer additional perks, including free debit cards and mobile apps. These accounts typically charge lower monthly fees than standard checking accounts, and they may offer fewer restrictions on withdrawals and transfers.
You should be able to deposit most types of checks, including personal checks and payroll checks. Some second-chance accounts only accept certain kinds of checks, however.
Not all second chance checking accounts offer paper checks, but many of them encourage customers to use the same debit card that came with the account or the bank’s mobile app to transfer money between friends and family.
Pay bills through the account using the same methods as you’d use for any other checking account.
ATM machines that are part of a second chance checking account’s network are generally free to use. If you use an ATM outside of the network, there may be a fee associated with withdrawing cash.
Will My Credit Report Be Pulled?
You might think that if you apply for a loan at a second chance checking account, your credit report will be used to determine whether you qualify for the loan. However, banks typically only look at your ChexSystems report.
Banks don’t conduct a credit check, which means they don’t pull your credit report. Instead, they rely on a third party service called ChexSystems to compile a list of your current accounts.
A ChexSystems report doesn’t include any personal identifying information, such as your Social Security number, address, phone numbers or email addresses. You’ll never receive a letter stating that your credit report was pulled.
Your ChexSystems report stays on file for up to five years after its last update. During that time, banks can deny you access to certain types of loans, such as mortgages and auto loans.
However, there are exceptions. Some lenders may still consider your ChexSystems record when deciding whether to approve your application.
For instance, if you’ve had a bankruptcy within the previous seven years, your ChexSystems history will remain on file until seven years after the date of discharge. After that, the negative items will no longer affect your ability to obtain a mortgage or car loan.
Some states require that your ChexSystems records be kept for 10 years. If you live in one of those states, you should check with your state’s Department of Financial Institutions to find out if your ChexSystems reports must be maintained for that long.
What Types of Service To Expect
You’ll be able to open a second chance checking account with most major banks. These accounts usually come with free ATM access, no monthly maintenance fee, and no minimum balance requirement.
Some second chance banking institutions offer additional perks, such as free bill payment, direct deposit, and cash back rewards.
These accounts typically don’t charge overdraft fees, although there may be exceptions depending on your state laws.
They also tend to have lower interest rates than standard bank accounts.
However, keep in mind that these accounts are considered high risk, so they may require you to meet certain requirements before opening an account.
For instance, you might have to provide proof of employment, income, assets, and/or savings.
You may also have to wait until after your probationary period ends before being approved.
Once you’ve opened an account, you’ll be issued a debit card.
This card will work anywhere a typical debit card does, including online and to make payments.
Since it’s a debit card, the money will immediately be taken out of your checking account when you spend money using it.
You won’t be able to use this card to buy items or make payments online without incurring fees.
If you want to avoid those fees, you’ll need to use another form of payment instead.
There are many options available to you, including prepaid debit cards, gift cards, and even cryptocurrencies.
Keep in mind that these options may cost you a bit more upfront, but they’re worth it if you plan on making lots of small purchases.
You’ll also be given access to your funds within 2 days of receiving them via direct deposit.
Most of these services waive fees and offer higher interest rates if you link your account to your paycheck or government benefits.
Some online banks offer you access to your money sooner than traditional banks do when your direct deposit arrives.
You’ll also have access to your money up until two days earlier than traditional financial institutions.
Bad Credit: Why You Still Need a Bank Account
As with many other things in life, modern banking has largely gone mobile. Whether you need to make an online purchase, pay your electric bill, or even buy a shirt at the store, you need the ability to conduct financial transactions quickly and securely.
Even if you’re okay with conducting financial transactions on paper, you still need a way to pay your bills.
This is hard to do without a bank account. Without a banking relationship, you’re stuck using money orders or cashier’s checks to pay bills, or using check cashing services to access the funds in your paycheck.
You can try prepaid debit cards, but these won’t work for everything. They also tend to come with high fees and sometimes even hidden fees.
Additionally, foregoing a banking relationship can make it tough to get a car loan or mortgage. Many lenders won’t even consider a loan application if you don’t have a bank account.
So how do you eliminate all the extra cost and hassle? By opening a bank account.
4 Ways to Get a Bank Account with Bad Credit
Just because you have bad credit doesn’t mean you can’t open a bank account. There are several strategies you can use to work around your poor credit history or shaky banking record.
#1. Look for a “No Credit Check Bank”
Many banks use ChexSystems to review a potential customer’s banking history. If your ChexSystems report shows a record of overdrafts, unpaid fees, or negative balances, the bank might deny your account application.
However, not all banks require a ChexSystems report to open an account, and some won’t run a credit check before taking you on as a customer. Many banks that offer second-chance checking accounts fall within these ranks.
When you search for a bank, review its policies online. Most banks that have a second chance checking account program explicitly state whether they conduct credit checks or use ChexSystems reports.
#2. Get Your ChexSystems Report and Dispute Any Errors
You might be familiar with your credit report and the dispute process, but did you know you can do the same thing with your ChexSystems report?
As with your credit report, you’re entitled to one free ChexSystems report every 12 months under federal law. You can request your free report by visiting the ChexSystems Consumer Assistance website.
When you receive your report, review it to make sure it contains accurate information. Check for any mistakes or inaccuracies.
If you spot an error, you can dispute it with ChexSystems. You have the option to use the online dispute system or submit your dispute by mail.
You should also look for things like negative balances, insufficient funds fees, overdrafts, or unpaid loans. If you see any of these items, it’s worth contacting the financial institutions listed on your report to see if you can negotiate a settlement in exchange for getting the negative information removed from your report.
In the event you can’t get the negative items removed, make a list of the date each one appeared on your report. In most cases, negative items on a ChexSystems report automatically drop off after five years.
#3. Ask the Bank to Reconsider
If you’ve been denied for a checking account, you can ask the bank to take another look at your application. In some cases, banks might be willing to overlook a negative banking record if you have a compelling explanation.
For example, maybe you experienced a sudden illness that caused you to pay some bills late or bounce a few checks. Or perhaps you got laid off from your job and had to scramble to find new employment.
If you can show that your negative banking history is an anomaly caused by emergency circumstances, the bank might reverse its decision.
#4. Open a Second Chance Checking Account
Second chance checking accounts let you enjoy the perks of a bank account while letting you repair your banking history.
While you might pay higher fees for a second chance checking account, this is usually better than going without an account altogether. Assuming you use your checking account responsibly, many banks that offer second chance accounts let you eventually upgrade to a regular account with more features and fewer, if any, fees.
The Pros and Cons of a Second Chance Checking Account
Second-chance checking accounts offer a number of benefits, but they’re not without a few possible drawbacks. Here are some pros and cons to keep in mind.
A second chance checking account can be beneficial in several ways. Here are the top three.
Repair your banking history. A second chance checking account helps you rebuild your banking history, but you still need to practice good money management. If you make the same mistakes as you did in the past, you could end up making your situation worse.
Avoid excessive fees. Having a second chance account also lets you avoid accumulating the fees that come with prepaid debit cards, money orders, cashier’s checks, and check cashing services.
Reestablish your relationship with the bank. Right now, you might be focused primarily on repairing your bad banking history. In the future, however, there’s a good chance you’ll want to take out a car loan or get a mortgage.
Opening a second chance account is the first step in rebuilding your relationship with the bank. Once you prove you’re capable of managing your money in a responsible way, you stand a much better chance of getting approved for loans and other financial products.
Unfortunately, second-chance checking accounts can come with some downsides. Here are three cons to watch out for.
High maintenance fees. Many second-chance checking accounts come with monthly maintenance fees. Over time, these can add up.
While you might be able to avoid monthly service fees in some cases, most second-chance banks will only waive these charges if you maintain a certain balance or set up a specific number of direct deposits.
No overdraft protection. Additionally, it’s rare to find a second-chance checking account that offers overdraft protection. While no one necessarily aspires to overdraft their account, some people feel peace of mind knowing they have the ability to temporarily overdraw their funds to pay an important bill or take care of an emergency expense.
Won’t rebuild bad credit. Finally, a second chance checking account doesn’t do anything to help repair bad credit. If you have bad credit, you’ll need to take separate steps to improve it.
5 Things to Look for When Picking a Checking Account for Bad Credit
Now that you know the ups and downs of second-chance checking accounts, you’re ready to find one that fits your goals. Here are five things to look for as you prepare to shop around.
#1. Low or No Maintenance Fees
The reality is that most second-chance checking accounts charge a monthly maintenance fee. You might also see this called a “service fee.”
However, not every bank tacks on a maintenance fee. For example, both Chime and Aspire offer checking accounts with no monthly fees.
Additionally, banks like Wells Fargo waive the monthly maintenance fee as long as you keep you balance above a certain amount or set up a minimum amount of direct deposits.
#2. No Minimum Balance Requirements
When you’re working hard to repair your banking history, it’s best to avoid any potential stumbling blocks. If you open an account with a minimum balance requirement, you’ll get dinged every time your balance drops below this amount.
To play it truly safe, look for a bank that doesn’t require you to keep a certain amount of funds in your checking account. That way, you don’t have to worry about accumulating any negative strikes against you.
#3. Free Services
There are a lot of banks out there, and they compete to earn your business. One way they do this is by offering various free perks that make life easier.
Some popular freebies to look for are free electronic bank statements, a debit card tied to your account, free online bill pay, unlimited check writing, and mobile check deposits.
#4. Mobile Banking
If you’re one of the 81 percent of U.S. adults who own a smartphone, you could probably benefit from mobile banking. Today’s mobile banking apps put powerful money management tools right in the palm of your hand.
For example, the best mobile bank apps let you check your balance on the go, and some even send you alerts every time your account changes. The ability to see your account in real-time can be a big help when you’re working hard to repair your banking history.
#5. Physical Branch Locations
As helpful as mobile banking can be, some people also like the convenience of being able to stop by their local bank branch. Having access to a brick-and-mortar location can be useful when you need quick customer service.
Additionally, working with a physical bank can come in handy down the road if you want to take out a loan or start a new business. This is why some people prefer building a banking relationship with a bank that has a physical presence in their community.
Prepaid Debit Cards: An Alternative to a Second Chance Bank Account
What if you need the features of a bank account but you don’t want to open a second-chance checking account? The most popular alternative to a second chance account is a prepaid debit card.
As the name suggests, a prepaid card requires you to load money upfront. From there, you can make purchases as you would with an ordinary debit card, but only up to the amount you’ve paid in advance.
Like second-chance checking accounts, prepaid debit cards don’t require a credit check. You can also reload money as you go, which makes prepaid cards convenient.
This may sound great, but keep in mind that prepaid debit cards have their drawbacks. They won’t help repair your banking history, and many of them have hidden fees that make them difficult to manage.
Although prepaid cards often come with high fees and limited flexibility, there are a few good options out there. If you’re in the market for a prepaid debit card, here are four to consider.
#1. Netspend® Visa® Prepaid Card
The Netspend® Visa® Prepaid Card features a mobile app that helps you keep track of your balance and spending. There is also a direct deposit feature that gives you quick access to your paycheck each month.
On the downside, the card comes with some pretty high fees. Each purchase will cost you between $1 and $2, and you’ll pay up to $9.95 per month in maintenance fees.
The Netspend card also charges a $5.95 inactivity fee if you don’t use the card for 90 days.
#2. Wells Fargo EasyPay® Card
The Wells Fargo EasyPay® Card offers free cash reloads, and there is no charge to activate the card. There are also no inactivity fees if you stop using the card for whatever reason.
Cardholders also enjoy free ATM transactions at over 13,000 Wells Fargo ATMs across the country. Out-of-network ATM transactions are $2.50.
On the downside, the card comes with a $5 monthly maintenance fee. However, there are no purchase or point of sale fees, which makes the Wells Fargo EasyPay® Card more attractive than other prepaid debit card options.
#3. Bluebird by American Express
The Bluebird card, which is issued by American Express, is one of just a handful of prepaid debit cards that doesn’t charge fees when you load or spend money. There are also no monthly maintenance fees and no charges for inactivity.
Users can also write checks, set up direct deposits, and do mobile check deposits. On the downside, American Express isn’t as widely accepted by retailers as Visa and Mastercard.
#4. Fifth Third Access 360°
You can only get the Fifth Third Access 360° card from a Fifth Third branch, which means the card is only available to people in 10 states. However, Fifth Third’s impressive ATM network offers free transactions at more than 50,000 ATMs around the country.
There are no purchase fees to use the card, however, you’ll pay a $4 monthly maintenance fee unless you have a Fifth Third checking account or set up a minimum of $500 in direct deposits each month.
A bad banking record doesn’t have to stop you from opening a checking account.
With a second chance checking account, you can enjoy all the benefits and conveniences of banking without worrying about a credit check or ChexSystems record holding you back.