A person with bad or no credit can open an account by visiting many credit unions and by asking commercial banks if they offer second-chance checking accounts, says NerdWallet. After a year or two of good account maintenance, most institutions allow consumers to upgrade second-chance accounts to regular accounts.
Second-chance checking accounts are relatively high-risk for a bank or credit union, and consequently, they are more likely to come with monthly fees and minimum balances, explains NerdWallet. However, they are nearly always better than prepaid debit cards and check cashing.
Second-chance accounts may also require financial counseling, and they may not allow access to a debit card, says Bankrate. Because scams on this issue abound, consumers should ensure their bank or credit union is insured by the Federal Deposit Insurance Corporation or the National Credit Union Administration.