Content provided by Bankrate.com. New York Post and its content partners earn compensation from the affiliate companies that appear below. This content does not include all available financial offers, and compensation may impact how and where links appear in the content.

Have your past financial mistakes made opening a new bank account difficult? Maybe you’ve had a few money missteps, like overdrawing your account or having a check bounce. Or maybe you’ve never even had a bank account before and don’t know where to start.

If any of this sounds familiar, second chance banking may be the solution to get your financial life back on track.

Second chance banking allows consumers to open new savings and checking accounts, even if their past financial behavior has made them less attractive to traditional banks and credit unions. 

Typically, when you apply for a new account, the bank will review your credit using a reporting service called ChexSystems. This service collects information about your banking history. It’s similar to how credit bureaus track your credit history when you apply for loans or credit cards. 

Your ChexSystems score may be low if you have a history of bounced checks, excessive overdrafts, or account closures. That may lead banks to deny your application.

With second chance banking, banks either won’t check your ChexSystem score or will approve you despite a low score. This allows you to access banking services — like a checking or savings account — and rebuild your financial reputation.

Not having access to a bank can be frustrating and expensive. Unbanked consumers often pay more for basic services, like paying bills or checking. Second chance banking is a lifeline for those who have struggled in the past, helping consumers get back on their feet. 

Second chance banking is ideal for anyone who has had financial challenges in the past. This could include:

If you’ve had trouble qualifying for a traditional bank account, second chance banking could be a good option for you.

According to a 2021 Federal Deposit Insurance Corporation survey, 4.5% (or around 5.9 million) of U.S. households are unbanked, meaning they don’t have a checking or savings account. About 18.7 million (or 14.1%) households are underbanked, meaning they had bank accounts but relied on alternative financial products, like pawn shops or cash checking services.   

Second chance accounts offer features similar to regular accounts, such as check writing and debit cards. However, they may have certain limitations or fees, including: 

You can show financial responsibility by paying fees on time, maintaining the required minimum balance, and avoiding overdrafts and bounced checks. 

Over time, your bank or credit union may allow you to upgrade to a traditional checking account with fewer restrictions and lower fees.

Another key benefit of second chance banking is the opportunity to rebuild your credit. Many second chance bank accounts report your account activity to the credit bureaus, which can help improve your credit score over time.

Second chance banking provides an opportunity for people who may have been turned away from traditional banks to access essential financial services. Here are some advantages of using a second chance bank account. 

Ability to use basic banking services

With a second chance bank account, you can enjoy the convenience of online banking, bill pay, and debit card usage. 

Second chance bank accounts also offer lower-cost methods of sending and receiving money. Instead of relying on expensive alternatives like payday loans or check cashing services, you can manage your finances through a checking account with lower fees and better terms. 

Pathway to traditional accounts 

Using your second chance account responsibly can lead to an upgrade to a traditional checking or savings account. These accounts often come with more features and fewer fees, rewarding you for your improved financial management skills.

Opportunity to qualify for credit cards

Smart use of your second chance account may also make you eligible for a credit card from your bank. Making regular, on-time credit card payments can build a strong credit score, which is crucial for accessing loans with better terms.

Access to financial education 

Many second chance bank accounts offer resources to help you manage your money and avoid future financial missteps.

When selecting a second chance banking account, consider the following factors:

If you’re considering opening a second chance bank account, here are a few of the best options available. None of these accounts use ChexSystems to approve you for an account. 

Second chance banking is a valuable chance for those who have struggled with financial challenges in the past. By offering access to banking services and helping you rebuild your financial reputation, second chance accounts can lead you to a brighter financial future.

Remember, smartly using your second chance account is key to improving your financial health. By making timely payments, avoiding overdrafts, and maintaining the required minimum balance, you can show your commitment to smarter money management.

Opinions expressed are author’s alone, not those of any bank, credit card issuer, or other entity. This content has not been reviewed, approved, or otherwise endorsed by any of the entities included in the post.