Which banks offer second chance checking accounts

Second chance checking accounts are offered by regional banks, credit unions, and some online banks, but not by the largest national chains. Chime, LendingClub, Varo, and Axos Bank all offer accounts designed for people with banking history problems. At the regional level, banks like Connexus Credit Union, Aspiration, and Discover Bank have second chance programs. The catch: these accounts often come with lower limits on debit card spending, monthly fees that vary by bank, and restrictions on overdraft features.

The banks that market these accounts explicitly know they are taking on customers with prior issues — closed accounts, unpaid fees, or ChexSystems records. They offset that risk by building in guardrails. You will not find second chance checking at Chase, Bank of America, Wells Fargo, or Citibank. Those institutions use ChexSystems reports as a hard filter and rarely make exceptions.

Your best starting point is to call your own bank first. Some regional banks and credit unions will work with you even if you have a negative history, especially if you have been a customer before or have a relationship with a loan officer. If that does not work, the banks listed here have explicit programs and do not require a clean ChexSystems report to open an account.

Key Takeaways

  • Chime, Varo, Axos Bank, and LendingClub all offer checking accounts to people with prior banking problems and do not use ChexSystems as a disqualifying factor.
  • Credit unions like Connexus and Aspiration often have second chance programs with lower fees than traditional banks, though they may have membership requirements.
  • Second chance accounts typically include spending limits on debit cards, monthly maintenance fees between $5 and $15, and no overdraft protection.
  • You will need a government ID and proof of address to open any account, and some banks will ask about the reason for your prior account closure.
  • Online banks tend to have faster approval than regional banks, sometimes within 24 hours, because they do not require in-person verification.

Online banks with second chance programs

Chime is the largest online bank offering second chance checking. The account has no monthly fee, no minimum balance, and no overdraft fees — but it also has no overdraft protection. You can spend only what you have loaded onto the card. Chime does not report to ChexSystems, which means your account history there stays private. Approval usually takes a few minutes if you have a valid Social Security number and a government ID.

Varo offers a similar structure: no monthly fee, no overdraft fees, and no ChexSystems check. Varo's account includes a small savings feature that rounds up debit card purchases and deposits the difference into a savings pocket. Like Chime, you can only spend what you have. Varo approval is also fast, typically within hours.

Axos Bank (formerly AxisBank) offers a second chance checking account called the Rewards Checking account. It has a $5 monthly fee if you do not meet a minimum deposit threshold, but the fee is waived if you set up direct deposit or maintain a $1,500 balance. Axos does use ChexSystems but does not automatically deny applicants with negative reports — they review each case. Approval takes one to three business days.

LendingClub's checking account has no monthly fee and no minimum balance. It does not use ChexSystems. The account comes with a debit card and online bill pay. LendingClub approval is typically same-day or next-day.

Credit unions with second chance checking

Credit unions often have more flexibility than banks because they are member-owned and can make exceptions based on your relationship with the institution. Connexus Credit Union, based in Illinois but open to members nationwide, offers a second chance checking account with no monthly fee and no minimum balance. Connexus does not use ChexSystems. You will need to become a member first, which requires a small deposit (usually $5 to $25) into a savings account.

Aspiration, a fintech credit union, offers checking accounts to people with prior banking problems. Aspiration charges no monthly fee and no overdraft fees. The account includes a debit card and online banking. Aspiration does not use ChexSystems and approves most applications within 24 hours.

Many local credit unions also offer second chance accounts, though they do not advertise them as such. Call your local credit union and ask whether they work with people who have been denied by other banks. Credit unions are more likely to say yes if you live or work in their service area, because membership is tied to geography or employer.

What to expect when you open a second chance account

Second chance accounts come with trade-offs. Most have daily spending limits on the debit card — often $500 to $1,000 per day — to reduce the bank's risk if the card is lost or stolen. Some accounts limit the number of transactions you can make per month. Monthly fees range from $0 to $15, depending on the bank and whether you meet conditions like direct deposit or minimum balance.

None of these accounts offer overdraft protection. If you try to spend more than you have, the transaction will be declined. There is no fee, but there is also no safety net. This is by design: the bank is protecting itself, and you are protected from overdraft fees.

Most second chance accounts do report to the three credit bureaus (Equifax, Experian, TransUnion) once you have had the account open for several months. This means responsible use — keeping a positive balance, making deposits regularly, not overdrawing — will gradually improve your credit score. Some banks report after 30 days; others wait 90 days. Ask the bank directly when they begin reporting.

How ChexSystems affects your options

ChexSystems is a banking history reporting system used by most traditional banks to screen applicants. If you closed an account with unpaid fees, bounced checks, or fraud, that information stays in ChexSystems for five years. When you explore for a new account at a bank that uses ChexSystems, they pull your report and often deny you automatically if there is a negative mark.

The banks listed in this article either do not use ChexSystems at all (Chime, Varo, LendingClub, Connexus, Aspiration) or use it but do not automatically deny applicants with negative reports (Axos Bank). If you have been denied by multiple banks, you can request your ChexSystems report for free at www.chexsystems.com. The report will show what is in your file and give you a chance to dispute inaccurate information.

Some banks will reconsider your process if you explain what happened — for example, if you had a medical emergency that caused you to overdraw, or if the negative mark is from years ago and you have since rebuilt your finances. Axos Bank and some credit unions are more likely to listen to this explanation than online banks, which rely entirely on automated systems.

Regional banks with second chance programs

Beyond the national names, some regional banks offer second chance checking. Customers Bank (Pennsylvania-based but open nationwide) has a second chance program with no monthly fee and no minimum balance. Customers Bank does use ChexSystems but reviews applications individually. Approval takes three to five business days.

Ponce Financial Group (New York-based) offers a second chance checking account with a $5 monthly fee. They do not use ChexSystems. Approval is typically within one business day.

The challenge with regional banks is that they may not be available in your state or may have limited online banking features. Before opening an account, confirm that the bank has branches or ATMs near you, or that their online platform works for your needs. Some regional banks have poor mobile apps or limited bill pay features compared to online banks.

Steps to open a second chance checking account

The process is straightforward and takes 15 to 30 minutes. You will need a government-issued ID (driver's license, passport, or state ID), proof of address (utility bill, lease, or bank statement dated within the last 60 days), and your Social Security number. Some banks also ask for your employment information, though this is not always required.

For online banks, you can complete the entire process on your phone or computer. Upload photos of your ID and proof of address, enter your Social Security number, and answer a few questions about your banking history. The bank will tell you when ready whether you are approved or if they need more information. If approved, your debit card ships within 5 to 10 business days, and you can start using the account online right away.

For credit unions and regional banks, you may need to visit a branch in person or complete the process by phone. Ask whether they require an in-person visit before you start the process. Some will mail you a debit card; others will issue one at the branch.

Frequently Asked Questions

Will opening a second chance account hurt my credit score?

Opening the account itself will cause a small, temporary dip because the bank pulls a hard inquiry on your credit report. This dip usually recovers within a few months. After that, responsible use of the account — keeping a positive balance and making regular deposits — will help your score recover over time as the bank reports your activity to the credit bureaus.

Can I get a second chance account if I have an active ChexSystems record?

Yes. Banks like Chime, Varo, and LendingClub do not use ChexSystems at all, so your history there does not matter. Axos Bank and some credit unions use ChexSystems but do not automatically deny applicants with negative records. You will have better luck with online banks and credit unions than with traditional banks.

What happens if I overdraw a second chance account?

The transaction will be declined at the point of sale. You will not be charged an overdraft fee because these accounts do not offer overdraft protection. The downside is that you cannot spend money you do not have, even temporarily. This is a safety feature designed to keep you from accumulating debt.

How long does it take to get approved?

Online banks like Chime and Varo approve applications within minutes to a few hours. Regional banks and credit unions typically take one to five business days. If the bank needs to verify your identity or has questions about your banking history, approval may take longer. Ask the bank for an estimated timeline when you explore.

Can I switch to a regular checking account later?

Yes. Once you have had your second chance account open for six months to a year and have built a positive history, you can ask the bank about upgrading to a standard account with higher spending limits and overdraft protection. Some banks will upgrade you automatically; others require you to request it. Your positive account history will make you a better candidate for approval.