When you have experienced financial setbacks, you may have difficulty being approved for a new bank account. Second Chance Checking accounts—also known as second chance bank accounts—can offer another option for people looking to get on stronger financial footing.
To get the most out of a second chance checking account, it is important to understand what tools and resources are being offered alongside the account to help you build financial literacy and get into the habit of good money management.
What Is Second Chance Checking?
A second chance checking account usually has more flexible signup requirements than a typical checking account, which can make allowances for people who have struggled in the past with on-time payments or maintaining a strong credit score. If you have previously been denied an account by a financial institution, second chance checking may be an easier path to checking account approval.
Financial institutions like credit unions and banks often review your banking history found in your ChexSystems report before deciding to approve you for an account. They consider factors like poor credit, excessive withdrawals, late bill payments, and lack of banking history. Second chance checking does not take ChexSystems reports into consideration. Instead, the credit union or bank will use their own criteria to determine if you make sense to be enrolled in the second chance checking program.
What Can You Do with a Second Chance Checking Account?
The most important thing a second chance checking account can offer you is an easy way to conduct everyday banking transactions that are necessary to stay on top of your finances.
A second chance checking account will have features that allow you to:
- Budget Better: With Digital Banking tools, monitor your spending, set up savings, establish a budget, and more.
- Pay Bills Easily: Whether it’s a one-time or recurring bill, use autopay features to pay bills on time through Digital Banking with your second chance checking account.
- Spend Securely, Online or In Person: You can make purchases online or in-person with a debit card. You can also withdraw cash from ATMs.
How Can Second Chance Checking Help You Rebuild Your Finances?
Some second chance checking accounts may also offer features that help you build better money habits. At Credit Union 1, members with second chance checking gain access to that help build good money habits, including:
- Get Paid Sooner1: Members with direct deposit set up to a second chance checking account can get paid up to two days sooner. This can help you budget better, knowing your funds will hit your account when you need them.
- Monitor and Build Your Credit Score: Credit unions and banks often offer tools in Digital Banking that can help you stay on top of your credit score, which can set you up for better financial opportunities in the future. CU1 offers free access to Credit Score in Digital Banking, which offers more than just a report on your credit—it also offers credit goal setting, credit monitoring alerts, and a score simulator that lets you see how certain actions can help improve your score.
- Financial Education: Finances can be complicated, and building financial literacy can help build a good groundwork for future success. Many credit unions offer financial wellbeing tools to help you learn about important money topics. Credit Union 1 offers a free financial wellbeing portal with short, online lessons, that can help you reset your financial mindset.
And you can transform that knowledge into positive steps forward. At Credit Union 1, if you successfully maintain a Second Chance Checking account for 12 months, you become eligible to transition to Free Checking or High Yield Checking. Open an account online, over the phone, or in person to start rebuilding your finances today.
