There are few things as frustrating as going into a bank branch to open a checking account, only to be told that you’re not eligible for a new account because of blemishes on your credit report or because of your name being listed on a Chexsystems report. With the economy being in bad shape, lots of people have taken serious hits when it comes to their finances, and the number of people whose credit has deteriorated has increased dramatically. So now what you get is a lot of people looking for banks that don’t rely on your credit rating to allow you to open an account. Bank accounts with looser requirements are necessary because not only do you need them from a convenience standpoint to do your regular financial transactions, but you also need an account so that you can get your finances back on track because relying on check cashing services to do all your financial transactions is a very expensive option.

Second chance checking accounts

This is where second chance checking accounts come in. If we’re (brutally) honest, we have to tell you that your options will be limited, because as weird as it may sound, financial institutions are not very risk-prone. What you’re looking for is a bank that will offer you a checking account with standard features, but that will be willing to overlook your bad credit. Checking accounts for people with bad credit are not a different product per se: behind the scenes, they work in exactly the same manner. The only difference is that because you’re considered a “higher risk”, you will pay higher fees and service charges compared to people who have “regular” checking accounts.

To open the account, the requirements are minimal (the hardest part is actually finding a bank that doesn’t check credit): have a government-issued ID and a valid Social Security number. This is required because of fraud verification, and also to make sure that the financial institution complies with FINCEN, which is a set of financial requirements to combat terrorism financing and money laundering.

Advantages and features of second chance bank accounts

Like we said previously, second chance checking accounts work the same way a regular bank account does. You will get standard features such as direct deposit, online banking, online bill pay, Visa or Mastercard debit card, ATM transactions, and so on. As for the restrictions, there’s a good chance you will have limited check writing privileges (if at all), and you will certainly not be allowed overdrafts. But considering how those overdraft fees can quickly pile up, we’re not sure that’s a bad thing.

Even though such accounts do come with their drawbacks, they are viable options as long as you remember what got you in trouble in the first place and do your best to manage them well and qualify for the “regular” accounts as fast as possible. Consider the fees as you paying back your way into the good graces of the financial system. In any case, it beats carrying cash everywhere (which is really not safe). Banks that don’t check credit provide a good solution to people looking to get their financial house back in order.

Banks That Don’t Check Credit To Open New Accounts | Second Chance Checking Accounts

Are you a Los Angeles resident who’s trying to open a bank account but is unable to because you’ve been reported to ChexSystems? Well depending on what your requirements would be, and your specific situation, there are several options that are available to you.

Did you get reported to ChexSystems because of fraud?

If that’s the case, then you will have a very hard time finding a bank that will agree to do business with you. Even some of the prepaid debit cards may decline your application.

Did you get reported by mistake?

Learn how to dispute a ChexSystems report.

Did you get reported to ChexSystems because of unpaid overdrafts?

If you have an overdraft that you haven’t paid for, the bank will close your account and send your information to ChexSystems.If you find yourself unable to open new accounts because of this, you need to go to the bank that reported you in the first place; they’re the only way for you to get out of ChexSystems. Explain what happened and offer to pay for what you owe, but in exchange they must agree IN WRITING to write ChexSystems and ask that your name be removed. It’s very important that you get their agreement in writing because they may not follow up.

If you paid the overdraft  and are waiting for your name to be cleared on ChexSystems’ database, you can ask the bank for proof that your debt is paid off. Some banks will agree to open an account for you even if your name is showing on ChexSystems, as long as you can prove that you don’t owe money to another bank.

How long has it been since you were reported?

Your information stays on file for five years. If it’s been four years and you only have one year to go, maybe it’s best that you wait it out.

What are my checking account alternatives in Los Angeles?

If all else fails, you can use a prepaid debit card as a checking account alternative. There are many of them that will give you most of the features you would get with a regular checking account: Western Union, Ace Elite, Rush Card, Walmart MoneyCard, Amex Prepaid, and so on.

Why can’t we give a list of L.A. banks that don’t use ChexSystems?

The first reason is that, from a logistical point of view, that would be a nightmare. Banks change their policies all the time and the sheer number of them would make such a list so hard to maintain that there’s no way it could be priced in a way that makes sense for both the customers and the people that make it. Lists that you see marketed online are just bogus lists copied from Yellow Pages and other sources and pasted.

The second reason is that many banks may actually open bank accounts for people on ChexSystems but would rather not advertise it, because it’s something they do on a person to person basis, and they don’t want it to get out of hand. With the number of people in financial trouble, non Chexsystems banks are in high demand these days.

Non ChexSystems Banks In Los Angeles | LA Second Chance Checking Accounts

It’s pretty well-known out there that ChexSystems is basically the watchdog of the banking world. This is the database that all banks (well depending on the estimates, anywhere between 80 and 90 percent) report to whenever there has been an issue with someone’s bank accounts. This issue can be repeated overdrafts, unpaid overdrafts, or fraud, and so on. When that happens, your information gets sent over to ChexSystems, who maintains a database of all such reports. Every time a prospective customer shows up to open a new account, their name is compared to the database to figure out if there are any known issues with them. If there are, chances are that they will get denied the chance to open a new bank account.

Related: How long does your name stay on Chexsystems’ database?

We know that most big banks use ChexSystems, but we wanted to know specifically how different banks handle it. So we made a call to Citibank’s customer service to clarify things. Here’s what we found out:

Do they use Chexsystems?

Yes, they do

What options are available to someone who has their name on ChexSystems and wants to open an account at Citibank?

They have to clear out the issue with ChexSystems first

What if the person paid off an overdraft that caused them to get listed and can prove it?

They should go to the bank that reported them and have that bank have their name removed from ChexSystems’ database

Is the ChexSystems policy company-wide or do the branches have some leeway?

All applications are processed through ChexSystems. For the ones that are made by phone or online, you get denied automatically if your name is on the so-called “black list”. For applications that are filled out in a branch, we could not be given a definitive answer as to whether or not someone at the branch would have the authority to approve opening an account even if the prospective customer is on ChexSystems. We’re inclined to think that there wouldn’t be much in the way of flexibility, but you never know. It might be an option worth pursuing.

Related: Banks that don’t check your credit

Does Citibank Use ChexSystems? Their Customer Service Answers

The No-Fee $10 purchase cushion is a feature offered by Ace Cash Express and NetSpend on the prepaid debit cards that they issue.

It works exactly as its name suggests. We all know how prepaid debit cards work: you load the card, and then you get all the convenience associated with a debit card, until your balance reaches zero. Typically, a prepaid debit card will not authorize any transaction for an amount greater than what is on your balance, even if it’s a couple dollars. So let’s say you have $52 dollars left on your account but need to pay for a $55 purchase. Most prepaid cards would decline the transaction. With a no-fee $10 purchase protection, your transaction will be approved as long as your shortfall is $10 or less.

Now that doesn’t mean that you were extended $10 worth of credit; on the Ace Cash Express website, they call it a non-contractual courtesy, and you are expected to pay that money back as soon as possible. It doesn’t look like it’s much, but when you consider that you don’t have to pay any overdraft fees for that feature, those debit cards certainly differentiate themselves from the competition.

No Fee $10 Purchase Cushion | Best Prepaid Debit Card Features

If you have had problems in the past with a bank, and have had your account closed as a result, your information has probably been reported to ChexSystems. What that means is that out of all the banks operating in the United States, an estimated 80 to 90 percent of them will refuse to do business with you. In case you didn’t know, ChexSystems is a database that banks report to and share information with, so that they can verify prospective customers’ information before making a decision on whether or not to open new bank accounts for them.

When it comes to the major banks, they all take a look at ChexSystems’ database before opening new checking or savings accounts. It is a well known fact that smaller banks are more likely to take a risk than big, impersonal banks. So even if you can’t open a bank account at Bank of America, you will almost certainly find a regional bank or credit union that will open you an account. If even that is not an option, you can always look into prepaid debit cards, which will offer you many of the same features a “regular” bank account would.

Related: Banks that don’t check your credit to open new accounts

Does Bank Of America Use Chexsystems?

The Ace Pink Prepaid Visa® Debit Card is a well-reviewed card in the prepaid market. Not only does it offer plenty of benefits and a competitive fee plan that put it at the head of its class, it also comes with the added benefit that a portion of your purchase goes to breast cancer awareness and detection, so you donate to cancer research every time you use your card, without spending any additional money. People looking to get rid of heavy overdraft charges and penalties should definitely consider applying for the Pink Ace Elite Visa.

Offered through ACE Cash Express, this card is designed to give consumers all of the traditional debit card benefits while also helping a worthy cause. In 2010, ACE and NetSpend donated more than $400,000 through their partnership with the National Breast Cancer Foundation – all because consumers used their Pink Debit Card instead of cash.

Related: Ace Elite Prepaid Card Review – NetSpend Debit Card Review

The well-respected Visa logo is easily recognized and accepted worldwide. Each deposit is FDIC insured, protected from unauthorized activity, and available 24/7. Finally, Pink Prepaid customers can have their checks directly deposited to the card, without ever stepping foot into a bank or other financial institution.

Features:

Guaranteed approval. Pink Ace does not require any kind of credit check or fees to obtain a Pink Ace Elite Visa Card. Any person who wants a prepaid card can just apply for it. No credit check is required to obtain the Ace Pink Prepaid Visa® Debit Card. The only requirements are that you comply with the regulations of the US PATRIOT Act.

No application fee.

Two ways to participate. The Pink Ace Elite Prepaid Visa Card offers two plans, ‘pay as you go’ and the ‘fee advantage’ plan. The ‘pay as you go’ plan does not require a direct deposit and charges a fee of $1 or $2 when you use the card for transactions. The ‘fee advantage’ plan requires the customer set up certain features in order to receive discounted fees, such as direct deposit; it costs $9.95 with no transaction fees.

Credit builder: The card has a credit builder option, which enables you to build your credit through responsible and regular use of the card. This can include monthly bill payments and deposits.

Online bill payment:  You can now pay your bills online for free using your Pink Ace Elite Visa Card by just choosing the ‘bill pay’ feature.

Online shopping: You can shop as much as you want online or at stores, anywhere Visa debit cards are accepted.

Visa Card Zero Liability: Card funds are FDIC insured, backed by Visa Zero Liability which protects against unauthorized usage of your card. Should your card be lost or stolen, or should your account get hacked, you have the same security that is extended to all Visa® Cards. As long as you notify Net Spend within 2 business days, you will be reimbursed for any and all unauthorized withdrawals and/or debits against your card.

Free Direct deposit: You can access your money faster with direct deposit by depositing your pay check directly into your account. Get paid up to 2 days faster, don’t stand in line or pay check cashing fees. Direct deposit waives the reload fee.

No-Fee Cash Withdrawals at ACE locations. ATM fees typically range from $2.50 to $5.00. With direct deposit onto your card you will be eligible for free ATM withdrawals at all ACE locations. At those locations you can also buy a card, reload your card, or get a replacement.

Free unlimited purchase transactions when you enroll in the Fee Advantage plan.

No overdraft fees. Instead, you get a no-fee $10 purchase cushion. With this if you spend up to $10 over your balance you will not have to pay any fees. You will have to pay back the $10 but this is much better than having to pay a huge overdraft fee on top of it.

Free Anytime Alerts™ – Get your balance and transactions via text or email

Free Savings Account – Receive 5.00% APY

NOTE: Some of the features require enrollment in the Fee Advantage plan

How to reload the card

Deposits can be done through free direct deposit, free account-to-account transfer online or by paying a fee when doing it through a customer service representative, and by visiting one of the many reload centers throughout the United States.

Verdict

Cardholder with Pink Ace appreciate the fact that a portion of every purchase you make with Pink Ace goes to the breast cancer awareness and detection program. Getting approved for this card requires no credit checks, or activation fees. FDIC insurance and Zero Liability protection make it safer to carry than cash.

Since it is impossible to spend more money than you have on the card, you can use it to control your spending and leave behind interest charges and overdraft fees. The Pink Prepaid debit card is an amazing debit card which provides all of the financial services you need, while allowing you to do your part in the fight against cancer!

Pink Prepaid Debit Card Review | NetSpend’s Ace Visa Card

ChexSystems is a reporting bureau that financial institutions such as banks use to screen people who come to apply for new checking accounts. If you find yourself unable to open a checking account, chances are that it’s because you have been reported to Chexsystems.

As a reporting bureau, ChexSystems is the equivalent of Equifax, TransUnion or Experian. Its only clients are the banks that use its services. So only a bank can have your name listed on Chexsystems and in most cases (with the notable exception of identity theft cases) it will be up to a bank to write and ask to have your name removed from the list.

Having your name appear on ChexSystems’ report means that most major banks will deny you a checking account. The major banks such as Chase obviously use ChexSystems. The smaller banks have slowly but surely been using the information too, although it is worth pointing out that ChexSystems itself doesn’t approve or deny your account. It’s solely the bank’s decision; they just use ChexSystems’ information to make that decision.

About PNC Bank

Established in the 1800s, PNC (Pittsburgh National Corporation) Bank has grown to be one of the leading financial service organizations in the country. With more than five million customers, and assets of approximately $264.3 billion as of March 2011, it operates 2,400 branches and 6,500 ATMs in 15 states. PNC Bank uses ChexSystems to screen out prospective customers. If you’ve applied for a checking account at PNC and been rejected, you should definitely look into options offered by banks that do not use ChexSystems.

Prepaid Debit Cards You Can Use Like Checking Accounts

Here’s a (partial) list of prepaid debit cards that can give you most of the options and convenience that you would get with a regular checking account. They’re easy to get, and can be used anywhere a regular debit or credit card is accepted.

• BBVA Compass SafeSpend Prepaid
• Ready Debit Card
• Green Dot Gold Card
• UpSide Prepaid Visa
• Mango Prepaid MasterCard
• American Express Prepaid
• Walmart MoneyCard

Does PNC Bank Use ChexSystems?

While we would love to be able to give a clear-cut answer to that question, it’s actually not a black or white type of situation. There all different circumstances that can come into play and influence the outcome, depending on your personal financial picture. Let’s take a look at each possible answer.

First answer: NO

This one, although the least popular answer, is probably the most likely one. In most cases, the person doesn’t find out that they can’t open a checking account until they’ve actually been to a branch to do so, and were declined. The majority of banks in the United States use a database called ChexSystems to screen prospective clients. If your name shows up on that database, that means that a bank has had a negative experience with you and has reported your name to ChexSystems. The particular case we’re looking at, unpaid debt, is definitely one that can get a bank to report you.

As for how long your information stays on Chexsystems, well unless corrective action is taken, that info stays there for five years, after which it is purged. In that time frame, it gets very hard to open new checking accounts, because an estimated 80 percent of the banks use Chexsystems and will turn down your business if you’re on that list.

Second answer: IT DEPENDS

Some banks, known as non chexsystems banks, do use ChexSystems but don’t automatically turn you down if you’re on that list. They tend to be the smaller and/or regional banks. You may have to jump through a few hoops but they will hear you out before making a decision. There are about 20% of banks out there who are more flexible when it comes to that, so you might have to look at your neighborhood banks. Establishing a personal relationship also works better in those smaller institutions.

Third Answer : YES (with caveats)

If you have no other options, your best bet might be to get a prepaid debit card. Of course, it’s not an ideal setup, because most of them will cost you way more than a regular checking account ever would, but at least they will give you almost all the convenience that you would get. Standard free features include direct deposit of your paycheck online bill pay, and the ability to manage your prepaid card online. As for the other stuff, that’s where you will need to comparison shop. There are a lot of fees to keep track of: annual (or monthly) fee, transaction fee (pin or signature), ATM withdrawal fee, reloading fee, inactivity fee, setup fee…

Not every card has ALL those fees, but they all charge you different combinations of fees, so it pays to know exactly what you’re going to be using the card for, and see which offering best matches your personal circumstances. If push comes to shove, a prepaid debit card might be the closest thing to a bank account that you can get.

Can I Open A Bank Account If I Owe Another Bank Money?

One of the side effects of the recent financial legislation is that banks and other financial institutions have been looking for ways to make up for lost revenues. Besides the fact that free checking is now an endangered species, we have witnessed more and more companies offering prepaid debit cards. BBVA Compass is one of the latest to do so, with the SafeSpend Card, a reloadable, prepaid VISA® debit card.

If you can’t open a checking account, or are looking for a debit card for your teenage son or daughter, or are a regular of local check cashing stores, you might want to take a look at the BBVA Compass SafeSpend Card. Like all prepaid debit cards, you only have to be 18 and be able to present a photo ID; there is no credit approval required, and no checking with ChexSystems. So even if you have bad credit or have your name on the ChexSystems database, you can still get the SafeSpend card and make purchases offline, shop online, as well as manage bill payments with a debit card.

Related: Bank accounts for minors

Once you apply for and get the SafeSpend Card, funds can be direct deposited onto the card, transferred from an existing BBVA Compass checking account or reloaded at any Visa ReadyLink location.

About Visa ReadyLink (From the Visa website):

Add money to your card wherever you see the Visa ReadyLink symbol.

It’s fast and easy to load your Visa Prepaid card* with additional funds at places conveniently close to where you live, work or shop. You can quickly add funds to your cards at these stores:

• MoneyGram Agents
• Safeway
• 7-Eleven®
• Circle K (at TIO Kiosk)
• ExxonMobil (at TIO Kiosk)
• Maverik (at TIO Kiosk)
• Carrs
• Dominick’s
• Genuardi’s
• Pak ‘n Save
• Pavilions
• Randalls
• Vons
• Tom Thumb

The SafeSpend Card is available for a flat $4 monthly service charge and carries a host of features such as direct deposit, online banking, bill payments, email/text message alerts, unlimited PIN and signature purchases, and your money is FDIC-insured.

Reloading or performing a balance inquiry at a BBVA Compass ATM is free but there is an initial loading of funds charge of $4 and withdrawals at BBVA Compass ATMs cost $1 each. However, SafeSpend cardholders won’t be able to do much in-branch banking or write checks. The lack of check writing capabilities is disappointing but not a deal-breaker.

Also, prepaid debit cards are ideal for teens and young adults looking to getting their first payment cards as they can help control spending. Then again, those cards are most beneficial once people have learned how to budget and manage their money in a responsible manner. It’s not possible to spend more than the available balance on the account, which obviously means there are no overdraft charges on the SafeSpend card. It also means that for teens, this can represent the first “real” lesson on how money works.

“The SafeSpend Card is a great money management tool for parents who aren’t ready to give their kids credit or debit cards,” said Jon Mulkin, Director of Consumer Segment Group at BBVA Compass, in a press release. “We also expect the card to be popular among people who want to designate their spending money for special purchases like vacations.”

From a cost perspective, a quick review of the terms and conditions suggests that the product isn’t exactly at the low-end of the cost spectrum, but it does establish the beginning of a relationship with the bank, and offers most of the conveniences that come with regular debit cards.

BBVA Compass SafeSpend Debit Card Review | Prepaid Cards For Teens

The ReadyDebit card is a prepaid debit card. When you apply for your Ready Debit card you can enjoy most of the same features of having a regular checking account. We don’t think there’s really a need to go in depth about how prepaid debit cards work: you use various methods to load money on to them; once that is done, you can use the card until you run out of money. Since the card is designed so that you can’t spend more money than is on the card you have to reload it if you want to keep using it. That’s it, in a nutshell.

So why pick this prepaid debit card over another one? Well it’s going to hinge on three factors: convenience (how easy is it to get the card and put money on it), features (what does the card actually allow you to do) and fees (how much do you get charged). You want to find the easiest to get prepaid debit card that offers the most convenience and features at the lowest fees. In most cases, you’re going to have to compromise. So how does the ReadyDebit prepaid card fare in each of those categories?

Related post: BBVA Compass SafeSpend Debit Card Review

Convenience

• The READYdebit™ Card is a debit card that is designed for people who have very poor credit and/or can’t open a bank account. There is automatic acceptance for everyone who applies and can verify the information they provide because it is a prepaid card and no credit lines are extended. Ready Debit does not require any kind of credit check.
• The READY Debit card offers much of the convenience that credit cards offer: the card is honored anywhere that Visa cards are accepted.
• It allows you the freedom to shop and pay bills online, as long as you have the money available on your card. You can shop as much as you want within your account balance with no limit online or at stores, anywhere debit Visa is accepted.
• You have access to your cash at millions of ATMs worldwide
• You’re covered by the Visa Card Zero Liability protection plan: carrying your card is safer than carrying cash and even in case of theft or loss, the Visa Card zero liability coverage protects unauthorized usage of your card.

Features

• You have the ability to load the card at more than 50,000 retail locations using Greendot MoneyPak or Visa ReadyLink. Be advised that there may be a service charge attached to loading your card via these methods.
• Free Direct Deposit. You can get your paycheck directly deposited and those funds will be available to you faster than most banks or check cashing locations. You can access your money up to two days faster with direct deposit by depositing your pay check directly into your account.
• Other Free reload options: Retail Cash Load and Bank ACH Transfer are free.
• The funds in the account are fully FDIC-insured
• FREE online bill paying feature, mobile banking, and online bill paying. You can now pay your bills online for free instead of paying to get money orders or going to the location to pay in cash. This is a much better way to take care of the utility bills.
• FREE online check writing. If the company does not accept electronic check, you can print your own check and mail it to them.
• FREE credit score tracker to help you monitor your credit profile. The card has a credit builder option: when you sign up for online bill pay, you can work on rebuilding your credit score. On-time payments are reported to PRBC to help re-establish and re-build your credit through responsible and regular use of the card. PBRC has yet to gain mainstream acceptance, though.
• No overdraft fees

Fees

The Ready Debit Card comes in three versions – the “Control”, the “Select”, and the “Platinum” versions. Here’s the fee schedule (as of Aug 4th, 2011)

Fees		Control			Select		Platinum
Card issuance		$9.95			$9.95		$9.95		This is a one-time fee, and is not charged until you make your first deposit.
Monthly service		Free with at least $1500 in monthly Direct Deposit, otherwise $3.95			$9.95		$14.95		A great deal—and a whole lot better than check-cashing fees, wire-transfer fees, interest payments, late fees, …Your first monthly fee is charged one month from the day you order your card.
Secondary Card		Not Available			$10		Free		Two cards can access the same account by adding a secondary card. Call 866.465.1645 to set this up.
Signature transactions		$0.95			Free		Free		Other companies charge $1 or more per transaction
PIN transactions		$0.95			Free		Free		Other companies charge $1 or more per transaction
Negative Balance Fee		Free			Free		Free		Really!
Direct deposit		Free			Free		Free		Save time and money-sign up for free direct deposit to your READYdebit card account.
Loading cash & deposits via bank ACH transfer		Free			Free		Free		You can load cash to your card with Visa ReadyLink and Green Dot MoneyPaks. Each store charges a fee to complete the transaction.
ATM withdrawal		$2.25			$2.25		$2		Remember that the ATM owner may charge a fee, as well. Be careful with these—they can add up. Many stores will offer cash back when you make a purchase-buy a pack of gum and skip the ATM fees.
ATM withdrawal decline		$1.95			None		None		Check your balance online before making the request.
U.S. ATM Balance Inquiry		$0.50			Free		Free		Check your balance often-it’s an important part of good money management.
Online customer service		Free			Free		Free
Automated phone support		Free			Free		Free		Check out our FAQ for answers to many questions.
Live customer service		$2 per call		1 free call per month, then $2 each			Free
Online bill pay		Free			Free		Free		A great way to pay your utility bills, rent or even your babysitter.
Bank teller cash advance		$5			$5		$5		Save a few bucks and use an ATM instead.

Summary

The ReadyDebit Visa reloadable prepaid card is ideal if you have been turned down for a traditional checking account (usually by getting reported to Chexsystems) and wish to take advantage of features afforded to checking account customers. It offers an affordable checking-account alternative for people with bad credit who either are non-banked or have a checking account with frequent overdraft fees that are costing them hundreds dollars in fees each year.

Ready Debit allows benefits you with free online payment, free online cheque writing, and access to over a million ATMs. The card offers flexibility in terms of maximum deposits and fees charged. When cardholders use prepaid Visa to pay their bills online they automatically earn positive credit to their account. When bills are paid on time online, it gets automatically reported to PRBC which allows you get a lower rate of interest if you applying for loans later in life.

However, bear in mind that having a prepaid card does not help you rebuild your credit. As previously mentioned, PBRC (while not a scam) has yet to get known to the point where it can be a major player. So the credit-building benefit of the card is rather limited. If you need to rebuild your credit, then a better and more efficient path is to get a secured credit card, also known as a second chance credit card.

ReadyDebit Card Review | Prepaid Visa Debit Cards