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The accounts often come with a different set of service fees attached; fees that you don’t normally see on ordinary accounts.
Do you know someone who’s tried to open up a checking account and has been refused? It happens more often than you think. That’s because there’s a blacklist that banks refer to when they’re deciding on a potential customer’s application. Simply stated, if you’re on that list the bank will probably deny your application.
You see, as a matter of course, banks report all sorts of incidents to certain consumer reporting agencies. These incidents can be acts of fraud or account abuses; for instance, too many overdrafts in one month or unpaid bank fees. They can also be account closures or for that matter, anything a particular bank considers significant. These incident reports go into a database and other banks and lending institutions can use that data when they’re making credit or account decisions.
The bottom line is that if you’ve been reported on, especially more than once, you’re in that database for a fair amount of time – sometimes years. And you’ll find it very difficult to open up a checking account because you’ve been blacklisted.
But all is not lost. There are specialized accounts called second chance bank accounts that are available from a number of banks. Not every bank offers them but they’re definitely available. And they’re designed specifically for people who’ve been blacklisted.
Now banks that offer these types of accounts aren’t doing it out of the kindness of their corporate hearts. They’re doing it because they can turn a profit on them. To begin with, the accounts often come with a different set of service fees attached; fees that you don’t normally see on ordinary accounts. For instance there will usually be a higher monthly maintenance fee plus there might be a fee for making deposits as well as withdrawals. The banks that offer these accounts deem these fees necessary to offset their risks, but they’re money makers too.
The good news is that even with these extra fees, a second chance bank account is a better deal financially than the alternative of having no account. That’s because with the account you won’t be forced to use alternative methods of moving your money around – methods like money orders or wire transfers, or expensive check cashing services. That should be enough to offset the fees and save you money to boot.
After you’ve had a second chance bank account for a number of months and you’ve demonstrated yourself to be a good banking citizen, you can apply for a normal account. Your odds of getting an approval are much better when you’ve proven yourself with a genuine track record than without one.
So if you think you’ve been blacklisted, you should look into second chance bank accounts. You might have to do a little searching on the Internet or in your local phone book to find a bank that offers second chance banking, but they’re out there so don’t give up. They can help you put your finances back in order and save you some money too.
