Second Chance Checking Accounts Why Are They Important?

By Thomas Winn

Millions of Americans from single parents, women and minorities to divorcees are trying to start over with their lives. They all need a new personal checking account for their personal financial or business related needs. These needs are addressed by some banks through second chance checking accounts.

Second chance checking accounts are bank accounts for customers, who had a negative financial history and are listed in ChexSystems. ChexSystems is a national database of consumer checking history. This is utilized by financial institutions for financial education, monitoring and decreasing exposure to risk. Once a person’s name is placed in the ChexSystem’s database, it stays there for 5 years. The system is flawed and it’s difficult to get off the list.

Improving the quality of life is the main objective of second chance checking accounts. Derogatory reports made blacklisted customers unable to manage their personal and business matters using mainstream banks. There is an expectation that customers issued by second chance checking account will eventually transition into mainstream banking.


Most second chance checking accounts have restrictions imposed on account activities including transactions that can be processed. A restriction example applied is the denial of issuing checkbooks. Many banks presently relaxed their guidelines in opening second chance checking accounts. The primary reason is the customer’s lack of financial education in dealing with their checking accounts.

Banks have different requirements for eligibility to open a second chance accounts. Some may require a big opening deposit while others require minimum amounts. Other banks are considerate to include most of the other features of normal checking accounts such as online payments, direct deposits and even ATM withdrawals.

There are disparities and flaws with ChexSystems. It provides poor assessment of the quality of risk to a potential customer and its database contained many names of individuals who shouldn’t be there at all. There are varied criteria and ways bank use ChexSystems to set its parameters for defaulting customers.

It’s important to provide hope to those who have negative financial experiences like being over drafted, or who have lost a great amount of money in debt or defaulted payments, second chance checking accounts are considered a ‘fresh start’ to rebuild their financial background.

Some banks have provided these second chance checking accounts to names found in the ChexSystems’ list as long as they haven’t committed any major or outright fraud. There are banks that give a ‘parole’ from the database and were allowed to open a mainstream bank account again.

Whatever the past credit issues a person had, even how bad it was, you can open a second chance checking account with its full functions like an ordinary checking account. If you spend more time to find out more information about banks that offer second chance checking accounts, you might even get one without any restrictions.

It wasn’t the person’s liking and it’s mainly due to lack of knowledge about proper usage of their banking privileges. Everyone deserves a second chance to rebuild their lives and become accepted once again into the financial community.

About the Author: Thomas Winn is a freelance writer for many small financial blogs. With years of experience as a financial advisor, Thomas enjoys managing finances. Other than his advice, Thomas recommends a new financial site that provides

financial advice



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