First, it should be mentioned that financial responsibility is very important. It isn’t rocket science; simply don’t write a check for more money than you have in the bank. If you do, then chances are your bank will smack you with a heavy overdraft fee. If you do it repeatedly and fail to pay back the money and the fees, then your bank may close your account or put it on hold. Even worse they may report you to other banks.
ChexSystems is a system where banks work together to report people who consistently abuse their checking accounts. The banks send the abusers information to a central location where they can all access it when you go to apply for a bank account. If your name is on the CheckSystems report with a bad score, chances are you will have a tough time opening up a normal bank account at any bank.
Hence the need for second chance checking accounts. These accounts vary by bank, but the overall idea behind them is they are a second chance for people who have bad CheckSystems scores. As you can imagine, these second chance accounts are closely monitored and may have limited functionality. You will definitely want to read the fine print when opening one of these accounts at a bank. Each bank may offer a slightly different type of account.
Another system that banks use to watch out for bad customers is known as the Early Warning Services (EWS). Similar to CheckSystems it is a group of banks that work together to ensure that repeat abusers of checking accounts will not be allowed a new checking account. Again, a second chance bank account will allow some individuals to receive a checking account even if they are denied a normal account due to the EWS.
Some banks have been accused of allowing users to open second chance bank accounts, but then after a few days freeze those accounts. Some people have even accused banks of taking money from these second chance accounts to pay off past debt against the users will. Before you open an account make sure to meet with an individual, ask a lot of questions, and read the contract. Best of luck trying to regain financial stability.
