Being stuck in Chexsystems can be a frustrating experience, particularly if you are in Chexsystems because of an honest mistake or identity theft. You might have heard about no Chexsystems banks that provide alternative solutions. Some banks promote no Chexsystems bank accounts to attract customers who have had past bounced checks, unpaid overdraft loans, or other banking problems.
In certain cases, no Chexsystems banks can give you a second chance and help you rebuild your financial stability. Before you sign up for a no Chexsystems bank account, though, there are several things you should consider:
1) Not all no Chexsystems bank accounts are truly available without a Chexsystems report. Many banks that offer these accounts still obtain reports from Chexsystems. They are simply willing to overlook some past banking mistakes and offer you an account to help you get your finances in order. Don’t assume that a bank that offers “second chance” accounts will approve your application without a Chexsystems report.
2) Second chance accounts that are not truly no Chexsystems bank accounts are only available in certain circumstances. In most cases, a bank will not approve an account application if a fraud entry appears on your Chexsystems report. Likewise, the bank will not likely be willing to approve you if you have not repaid all amounts owed to another bank for overdrafts and related fees.
3) Many no Chexsystems bank accounts are not actually bank accounts at all. In many cases, they are pre-paid debit cards. Financial institutions that promote these products as no Chexsystems bank accounts do so because there are routing and account numbers associated with these accounts. Unfortunately, this does not mean that you can use them like a real checking account. These “no Chexsystems bank accounts” commonly only have routing and account numbers for the purpose of setting up direct deposit of your paycheck, disability income, or income tax refund.
Typically, you will not receive paper checks that you can use as payment for goods or services. Many of these “no Chexsystems bank accounts” will not even allow you to make electronic payments using the routing and account numbers. They will typically not cash checks or accept paper checks for deposit. Fortunately, though, you will typically receive a debit card you can use for everyday purchases and electronic payments.
4) True no Chexsystem bank accounts commonly come with high fees. This is because banks that offer no Chexsystems bank accounts assume a high risk that you will bounce checks. You can expect to pay a high monthly service fee for maintaining your no Chexsystems bank account. You might also have to pay a set-up fee. Some no Chexsystems banks also charge fees for each check that is drawn against the account balance.
5) Don’t assume that your no Chexsystems bank account is a checking account. Some no Chexsystems banks only offer savings accounts. Although you might receive an ATM card to withdraw funds, you will not have a debit card available for purchases. In some cases, though, you might be eligible for a no Chexsystems bank checking account if you maintain your savings account in good standing for a specified length of time.
6) In some cases, no Chexsystems bank checking accounts are provisional accounts. You might become eligible for a standard checking account in the future. Keep in mind that you must keep your no Chexsystems bank account in good standing for six months to a year in order to qualify for a traditional account. This means that you cannot write any checks that are returned for insufficient funds or make any other account mistakes.
Finding a no Chexsystems bank account takes research and patience. If you are willing to deal with the fees and limitations of a no Chexsystems bank account, though, this type of account can take the stress out of depositing funds, cashing checks, and paying for everyday expenses.