Bad Credit Bank Accounts

There are a few situations where you can find yourself looking for a financial institution (whether it be a bank or credit union) that is offering bad credit bank accounts. For example, this financial product can be very useful for people who have a poor credit history, have filed for bankruptcy, or have a County Court judgment registered against them. In either of those cases, it becomes very difficult to get a checking account at any one of the major banks.

Everyone knows that nowadays you can hardly function if you don’t have a bank account. Getting a bad credit bank account can be the first step that you need in order to re-establish yourself as a desirable customer for banks. Honestly, opening a bad credit bank account is not going to be easy. Check systems is very aggressive in its marketing to banks so that they can use its services and it’s estimated that roughly 80% of them do so. Your best bet is to check the policies of the banks where you would like to open accounts because different banks have different policies regarding checking accounts for people with bad credit.

Actually a lot of the people looking this type of account may feel some type of shame because this is not something that they would have ever thought could happen to them. But the recent economic downturn has spared nobody, and it has become easier than ever to face a bad spell and then be reported to ChexSystems, where your information remains for five years unless you’re the determined type and decide that you want to get out of Chexsystems and take the necessary action.

Opening a bad credit bank account will at least get you back into the financial world. You will once again have check writing privileges, the ability to pay your bills online, access to ATM transactions, debit cards, and so on. And let’s not forget not having to stand at the check cashing store every week or every other week and carrying large amounts of money around. So with that in mind, financial institutions have created specific products for people who need a “fresh start”, as they call it.

The first thing you need to do when looking for second chance checking accounts is to make sure that the accounts are FDIC-insured. Just in case you’re wondering what we’re talking about, the FDIC insures every bank account for up to $250,000 (actually you can get even more coverage, so it could prove useful for you to check out the FDIC’s website if you want more details about that). What that means for you, in real terms, is that any amount of money that you have in that bank (up to $250,000) is fully insured: you can’t lose it.

The second thing you need to be looking out for is whether or not this second chance checking account that you’re thinking of opening comes with a Visa or MasterCard branded debit card. This is very important. Having one of those pretty much allows you to do business everywhere those cards are accepted. That includes online shopping, ATMs, and most businesses worldwide.

Thirdly, you want to compare what the different financial institutions are offering. Specifically:

• Is there a minimum opening balance?
• Is there a minimum balance requirement?
• Are there any monthly maintenance fees?
• How much is the card reload fee?
• How much is the ATM access fee?
• How long before you can apply for a regular bank account?
• Do you get any check writing privileges?

Well, you get the idea.

Repairing Your Credit

What we’ve discussed earlier was just the short term fix. Now let’s look at the long term fix. And that, of course, is repairing your credit so that you don’t have to settle for second chance credit accounts. With a bit of planning, you can make your credit history look a lot better in a matter of months (How long does credit repair take?). Obviously, credit repair is beyond the scope of this article (or even this site) but common sense suggests the following:

• Know how much you owe and who you owe. This can be done by getting copies of your credit report from the three major credit bureaus: Equifax, Experian, and TransUnion.
• Check the accuracy of those reports. If you spot any mistakes, take the necessary steps to have them corrected.
• Put in place some type of monitoring system so that you can a) keep track of how your credit is going and b) prevent identity theft.
• Pay your bills on time.

How To Get A Bank Account With Bad Credit

People’s Cash Solutions

It often happens like the following scenario. Someone, for whatever reason, does a miscalculation on their checking account and the overdraft fees pile up. The person doesn’t pay back the overdrafts either because they think it’s no big deal, or because they just don’t have the money to. No matter which one of those situations happens to be true, the banks will not just eat up the loss without taking any action on their part. They will indeed write off those amounts as a loss, but the transactions will be reported to Chexsystems, and that person will have a lot of trouble if they try to open a new checking account in most banks.

Some people, after finding out about this, will try and get removed from Chexsystems’ database. That usually entails paying off the amounts that you owe the different banks, but you can’t directly ask to be removed. It’s the banks themselves that have to write and state that you’ve paid the debt. You can easily imagine that this is a process that will take some perseverance, and won’t be able to get solved in a couple of days. In the meantime, you want to be able to carry out your life in a manner that is as close as how it previously was.

To do that, you need to find a company that will offer you an account with pretty much all the conveniences you would get with a regular checking account, even if you are listed on Chexsystems. There are several companies that do this, and today we’re going to focus on Peoples Cash Solutions.

Peoples Cash Solutions offers checking accounts to people who have a negative record on Chexsystems and/or Telecheck. The account that they open for you is FDIC-insured (meaning that you’re protected up to $250,000). The only instance where you will be denied is if you have been reported for fraudulent activity. There is a large pool of people out there who need a second chance bank account. It’s not only because they need to make financial transactions, but also because getting such an account can be the first step towards re-establishing yourself as a good customer for banks.

Features of Peoples Cash Solutions Accounts

Debit Mastercard. A Debit MasterCard is tied to a cardholder’s bank account and can be used to make purchases or obtain cash at more than 25 million locations around the world, including more than 1 million ATMs. Purchases using debit MasterCard are authorized by signed receipt or the use of a PIN. In other words, you can make transactions at any ATM, as well as set up Direct Deposit on your account and have access to that money without having to go to a check cashing store and pay the associated fees. Your MasterCard debit card is covered by MasterCard Zero Liability(TM) for fraudulent use and your account is FDIC insured up to $250,000.

Personal Checkbook. The benefits of actually having a checking account are hard to summarize, because it’s the starting point of most financial transactions. Peoples Cash Solutions offers a checking account with check writing privileges, which means that you don’t have to carry cash and can use checks instead. You can pay your bills through the mail. You can also use your checking account for budgeting purposes, so you can clearly see where your money goes.

Online Bill Pay. Nowadays you can pay almost all your bills online. You won’t have access to online bill pay right then and there, but after just 30 consecutive days of maintaining an account with Peoples Cash Solutions, you will qualify for their Internet Banking solution. Once approved, you will be able to make and schedule payments just like the other online bill payment companies offer their customers.

Online Banking. No longer to you have to go to an ATM or look for a statement to check your available balance. Along with being able to pay your bills online, online banking also allows you to check your balances, so you always know how much money you have left in the bank. You can also transfer money between accounts with a few simple clicks. Other benefits include the ability to reorder checks online as well as talk live to a customer service representative, should you have questions regarding your account.

Online Money Transfers. If you send money to relatives on a regular basis, Peoples Cash Solutions offers a free alternative to fee-laden money transfer services. All you have to do is obtain a separate account or ATM card for the people you send money to. From that point on, you can easily transfer funds to these additional accounts for free.

Overdraft Protection. If you’re facing an emergency, instead of getting a payday loan, you can use this service as an alternative. If you are not enrolled in direct deposit with your employer, you may qualify for up to $300 of ODP. If you have a direct deposit tied to your account, you may qualify for up to $500 of ODP. Not everyone will qualify for this, and there are fees, as well as other terms and conditions associated with this service. This is something that you can address with a customer service representative for more details. Also see Ally Bank’s Overdraft Policy

Second Chance Bank Accounts: More Information

Second chance bank accounts come in all flavors, depending on the financial institution that offers them. People whose names are listed with ChexSystems and/or Telecheck are usually the target market. Since they are often desperate for banks that do not use Chexsystems, they often tend not to look for lots of information so that they can make an informed decision.

That’s why, in addition to the information provided above, we want to give a little more to the people out there who have a bad credit history or who have had their accounts closed because of overdrafts and debt problems.

1. The best second chance account offers do not require a minimum account balance, nor do you have to submit to an interview. Since the second chance checking account is specifically designed for people with bad credit, it’s expected that you financial picture will be less-than-perfect.
2. The procedures are relatively simple and straightforward. You fill out the required application, submit ID, provide the funds to open the account, and you should be OK.
3. There are now an increasing number of financial institutions offering these types of accounts, making easier for people in tough situations. But that doesn’t mean that all these offers are good. Some are way better than others even though they charge less fees. In the end, it will all depend on how well you did your homework.

People’s Cash Solutions: Your Opportunity To Get A Second Chance Bank Account

According to the latest available statistics, ChexSystems is doing business with roughly 80% of the banks and credit unions out there. Maybe we’re different, but while most people tend to focus on the 80% figure, we tend to see things the other way around. And the other way around is simply that there are about 20% of the banks and credit unions out there that don’t use ChexSystems. If you stop and think about it, that’s quite a lot of banks! Now we’re not going to lie to you and tell you that those non-ChexSystems banks are popping up in every corner, but if we tell you that there’s a good chance that there are a few in your area, we won’t be lying to you either.

You know the deal: sometimes there’s a company out there that ventures off the beaten path, in order to give its customers a chance at something they really need. In other words, the company takes a risk, in order to make some money by serving a neglected portion of the population. So it is with banks that offer checking accounts for people with bad credit. Because the vast majority of banks out there use ChexSystems to determine whether or not they will open a checking account for a new customer, people with a negative record are left out in the cold.

While it might have been easy to turn away people when times were good, things are different now. The economic crisis means that a lot of people have fallen on hard times and have ended up with negative marks on their ChexSystems record. That doesn’t necessarily mean that they wouldn’t be good customers for the banks and/or credit unions. So those financial institutions have started to try and look beyond this simple aspect. There are now some that simply don’t check your ChexSystems record. Some others do, but also look at other financial information before they make their decision. What that means is that banks do openchecking accounts for people with bad credit, so you can still get a second chance checking account and be able to benefit from banking services.

Related: How to open a bank account after bankruptcy

Now it’s important to point out that all banks are definitely not created equal. If you’re going to open afresh start checking account a non-ChexSystems bank, there’s a few things you need to make sure are kosher, because all it takes is for you to fall on one bad apple, and you’re pretty much screwed. Here’s how to find a “bank without ChexSystems”

Finding Good Banks That Do Not Use Chexsystems

1. The most important part of finding a non-ChexSystems bank is, of course, doing your homework to make sure that the bank(s) you’re considering giving your business to are INDEED not going to run your ChexSystems report. Sometimes, and especially when they’re in a situation where they’re opening a lot of accounts in a short period of time, they will open up the account, pending verification. After running the scan, and they find negative marks on your report, your account will be closed. Period. Or, (and that’s even more embarrassing), if the bank checks on the spot, you will be declined in public! So make sure you have your facts right.
2. The second most important thing is that, just because you’re looking for a bank that doesn’t run your ChexSystems report doesn’t mean that you should settle for just ANY bank that you find. You still need the protection that comes with that financial institution being FDIC insured. So you need to have proof that the bank is FDIC insured before you open that checking account. In the case of credit unions, they have to be NCUA insured (that’s the equivalent of FDIC insurance, but for credit unions).
3. Finally, make sure that you’re not going to get some crippled service. If you can’t get the same (or almost the same) level of convenience, then it kinda defeats the purpose to go to such great lengths. You will need to get at least the following: check writing privileges, Visa- or Mastercard-branded debit card, and online banking. Also take a good look at their fee structure, in order to make sure that you’re not getting nickel-and-dimed.

Being reported to ChexSystems doesn’t necessarily have to mean that your financial life becomes a living hell. As previously stated, there are many financial institutions (banks and credit unions alike) that will open asecond chance checking account in your area for you regardless of, or in spite of, your ChexSystems profile. All you need is to do your homework and find the reliable ones that will fit you best.

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