Being denied a checking account because of past banking problems can make everyday financial tasks more difficult. Second-chance checking accounts can provide access to basic banking services when a traditional account is harder to obtain.
Fees, overdraft policies and eligibility requirements vary by bank. Comparing those details can help you find an account that fits your situation.
What Are Second-Chance Checking Accounts?
Second-chance checking accounts are designed for consumers who may have difficulty qualifying for a traditional checking account because of previous banking activity.
A bank may consider issues such as:
- unpaid overdraft balances;
- accounts previously closed with a negative balance;
- repeated overdrafts;
- other negative banking history.
These accounts often have fewer features than standard checking accounts. Some charge a monthly fee, while others limit or eliminate overdraft services.
They are generally intended to provide basic banking access while giving customers an opportunity to manage a new account responsibly.
3 Second-Chance Checking Accounts to Consider
1. Wells Fargo Clear Access Banking
Wells Fargo describes Clear Access Banking as an opportunity for customers looking for a second chance. It is a checkless account with no overdraft fees.
Key details include:
- $5 monthly service fee;
- $25 minimum opening deposit;
- no overdraft fees;
- no standard overdraft coverage;
- mobile check deposit;
- Bill Pay;
- Zelle;
- contactless debit card.
The $5 monthly fee can be avoided when the primary account owner is 13 to 24 years old, receives at least $250 in qualifying electronic deposits during the fee period, or meets the applicable military direct deposit requirement.
The account does not support check writing, although customers can deposit checks through mobile banking.
Best for: someone who wants a large national bank and does not need to write checks.
2. Regions Now Checking
Regions Now Checking is specifically positioned as an account with safeguards for customers who want to avoid overdraft fees. It is also Bank On certified.
The account includes:
- $5 monthly fee;
- $10 minimum opening deposit;
- no overdraft fees;
- no standard overdraft coverage;
- online and mobile banking;
- Bill Pay;
- Zelle;
- Early Pay for qualifying direct deposits.
If the available balance is insufficient, debit card transactions and other withdrawals are generally declined instead of creating an overdraft.
The $5 monthly fee is a fixed charge under the current pricing schedule.
Best for: someone who prioritizes predictable costs and wants to avoid overdraft fees.
3. Varo Bank Account
Varo offers a different approach. The bank states that it does not use ChexSystems or credit checks when reviewing applications for its Bank Account.
The account includes:
- no monthly fee;
- no minimum balance requirement;
- debit card;
- direct deposit;
- access to more than 40,000 Allpoint ATMs in the U.S. without a Varo fee;
- access to Varo savings products;
- early access to qualifying direct deposits.
Varo says qualifying direct deposits can be available up to two days before the scheduled payday, depending on when the bank receives the payment.
Out-of-network and international ATM withdrawals can have fees, so the ATM network matters if you frequently use cash.
Best for: someone looking to avoid monthly account fees and who may have difficulty because of a ChexSystems history.
What Features Should You Compare?
The three accounts are structured differently, so the monthly fee is only one part of the decision.
Monthly fee
A recurring fee can add significantly to the cost of keeping an account.
Wells Fargo Clear Access Banking and Regions Now Checking currently charge $5 per month, while Varo states that its Bank Account has no monthly fee.
Overdraft policy
Overdraft rules are especially important if you have had problems with overdrafts in the past.
Clear Access Banking and Regions Now Checking do not provide standard overdraft coverage. Regions generally declines transactions when the available balance is insufficient.
A lack of overdraft access can make spending more predictable, although it also means a transaction may be declined.
Minimum opening deposit
The amount needed to open the account varies:
- Wells Fargo Clear Access Banking: $25;
- Regions Now Checking: $10;
- Varo: no minimum balance requirement.
ATM access
If you regularly withdraw cash, check which ATMs are available without a fee.
Varo provides access to more than 40,000 fee-free Allpoint ATMs in the U.S., while out-of-network withdrawals can carry a fee.
Regions charges a fee for certain non-Regions ATM transactions, according to its current pricing schedule.
Do Second-Chance Accounts Build Credit?
Generally, no. A checking account is not a credit product, so simply opening and managing one does not normally build your credit score.
It can, however, help you establish more consistent banking habits. Regions specifically notes that its second-chance account does not directly affect credit scores.
If your goal is to improve your credit score, you would need a separate credit-building strategy.
Can You Get Direct Deposit?
Yes. Direct deposit is available with the three accounts discussed here, although the specific features vary.
Early access to qualifying deposits is also available with each institution under its respective terms:
- Wells Fargo offers Early Pay Day;
- Regions offers Early Pay;
- Varo can provide qualifying direct deposits up to two days early.
Early availability is not a guarantee that every deposit will arrive before the scheduled payment date.
Can You Use a Debit Card?
Yes. Each option provides access to debit card spending.
Wells Fargo Clear Access Banking includes a contactless debit card, Regions Now Checking provides a customizable debit card, and Varo provides a Visa debit card.
The main differences are the available ATM networks, fees and additional account features.
What Are the Main Drawbacks?
Second-chance banking can provide useful access, but there are trade-offs.
Monthly costs
Some accounts charge a recurring fee that can only be avoided under specific conditions.
Fewer banking features
Clear Access Banking, for example, is checkless, so customers cannot write checks from the account.
Transactions can be declined
Accounts without standard overdraft coverage may decline transactions when there isn’t enough available money.
Eligibility can vary
Not every account is available to every applicant, and some banks have geographic or other eligibility requirements.
Always check the current terms before applying.
Can You Eventually Switch to a Regular Checking Account?
Possibly. A second-chance account does not necessarily have to be a permanent solution.
Regions specifically states that customers with Now Checking can move to other Regions checking options.
Whether you can switch depends on the bank’s requirements and your circumstances.
If you have unresolved problems from an old account, addressing them may also improve your options with other financial institutions.
What If a Bank Denied Your Application?
If you were denied because of your banking history, find out what information contributed to the decision.
ChexSystems is one of the consumer reporting agencies used by financial institutions to evaluate banking history. Its reports can contain information about issues such as unpaid balances and involuntary account closures.
If you believe information in a report is incorrect, you can dispute it.
Varo also recommends obtaining and reviewing your ChexSystems report when a previous banking problem is affecting your ability to open an account.
Resolving an unpaid balance with a previous bank may also help address the underlying problem.
Second-Chance Checking vs. Prepaid Cards
A prepaid debit card can be another option if you cannot open a checking account.
The two products are different.
Second-chance checking:
- is a bank deposit account;
- can support direct deposit;
- can provide online bill payment;
- gives you an ongoing banking relationship.
Prepaid card:
- is funded before you spend;
- may have different fee structures;
- does not function as a traditional checking account.
If you need direct deposit and standard banking services, a second-chance checking account may be more useful.
How to Choose the Right Account
Start with the features you actually need.
Choose based on fees:
Varo may be attractive if avoiding a monthly maintenance fee is your priority.
Choose based on overdraft protection:
Wells Fargo and Regions both structure these accounts without standard overdraft coverage, reducing the risk of traditional overdraft fees.
Choose based on banking network:
If you regularly use branches or ATMs, check whether the institution’s network works for your location.
Choose based on features:
If you need to write checks, Clear Access Banking may not be suitable because it is checkless.
The cheapest account is not necessarily the most useful if it lacks a feature you need regularly.
What to Check Before Opening an Account
Before submitting an application, review:
- monthly maintenance fee;
- minimum opening deposit;
- overdraft policy;
- ATM fees;
- direct deposit options;
- check-writing availability;
- eligibility requirements;
- branch and ATM access.
Also review the current fee schedule and account agreement. Terms can change, and the details shown when you apply are the ones that matter.
Which Option Makes the Most Sense?
The best choice depends on what you need from the account.
Wells Fargo Clear Access Banking may be a good fit if you want a national bank and a checkless account with no overdraft fees.
Regions Now Checking can make sense if predictable monthly costs and spending controls are priorities.
Varo Bank Account stands out if avoiding monthly fees and ChexSystems screening is especially important.
Whichever option you choose, compare the current fees, ATM policies and account restrictions before applying. A good second-chance account should solve your immediate banking needs without creating new costs that are difficult to manage.
Frequently Asked Questions
What are second-chance checking accounts?
They are checking accounts intended for consumers who may have difficulty opening a traditional account because of previous banking history.
Can I open one with bad credit?
Possibly. Checking account approval is different from credit approval. A bank may consider banking history and other application information rather than simply looking at your credit score.
Do second-chance accounts use ChexSystems?
It depends on the institution. Varo states that it does not use ChexSystems when reviewing applications for its Bank Account.
Which second-chance checking account has no monthly fee?
Varo states that its Bank Account has no monthly fee. Wells Fargo Clear Access Banking and Regions Now Checking currently charge $5 per month under their standard pricing.
Can I receive my paycheck by direct deposit?
Yes. All three accounts support direct deposit, subject to their respective terms.
Do these accounts build credit?
Generally, no. A checking account does not normally establish a credit history.
Can I get a debit card?
Yes. All three options provide debit card access.
Can I eventually switch to a regular checking account?
It depends on the bank. Regions states that Now Checking customers can move to other Regions checking options.
What if my banking history is inaccurate?
Request a copy of the relevant consumer report and dispute information you believe is incorrect. Reviewing the report can also help identify why an application was denied.