1)   Those who have had a checking account closed by the bank.  This usually occurs when too many checks bounce, or the account is overdrawn too many times.  Banks have regulations they must follow, so if you hit their magical threashhold, they can cancel your checking account without warning.  Anyone going through tough economic issues may find this to be true. 

So what are your options when this occurs?  Well, you can apply at another bank…that's obvious.  However, since banks communicate with one or more check verification services like ChekSystems, once you get on their bad list, most banks will not accept your request.  Wow, you say…how could that happen?  Well it does, to millions of people every year.  If this is happening to you, you can:

• have your payroll and other checks cashed at a check cashing service, paying fees to get them to do it for you;
• hide your cash in your mattress;
• have relatives hold your funds and dole them out to you.

None of these ideas is very palatable, and costs you more money than banking.  There is no security in these choices. 

Another option for you is to open a checking account with a "second chance checking" bank.  Mostly, these are online banks.  You set up your checking and savings accounts, with the minimum they require (average $100), and they require that you have at least one payroll check direct deposited into the account.  They provide you with a debit card so you can quickly access your cash, and they offer other services as well for your convenience like transfers of funds.  You likely will not receive a checkbook…everything is done online.  So you would have to pay most of your bills using the debit card.  It is a good idea to choose one of their services, which automatically transfers money from your savings account when and if you have an overdraft situation on your checking account.  They charge for doing it, but it is better than having your payments bounce…again.  Second Chance Checking is a good option.

Credit Union's also have this service, so check out the one that you qualify for and go talk to their new accounts people.

Don't have the attitude going in that you are "less than", and have your hat in hand when you ask for an account.  The bank knows that they will make fees off your accounts, which can include:

• Monthly Service Fee
• Non-Sufficient Funds fee (NSF)
• Overdraft Fee
• Transfer Fee
• and many others

2)  New Accounts – for students and immigrants

When you just start out in life, or have just moved to this country, it is a very intimidating proposition to approach a bank to give you a checking account.  You have no history, no references…nothing to prove yourself.  Sometimes it is better to start out with a second chance checking account, unless your parents or relatives are willing to co-sign for you.  In this way, you can develop a good history before trying to get approved by one of the major lenders.  Second Chance Checking can help you get started.

Make sure that once you have this new second chance checking account, you manage your money well so you don't have to find out that a payment you made was rejected for insufficient funds.  You need to keep this account clean and running smoothly, so eventually, you can get back to having a regular checking account once again at one the major banks.  For more information on how Kansas City Credit Services can assist you with this, click here.

Donna Perkins