A bad credit score can make it more challenging to manage your finances effectively.
Although you may think that a bad credit score only compromises your ability to secure attractive financing terms, it can also impact your checking account options. With a bad credit score, you may have trouble getting approved for many accounts.
With that, it is important to understand the best checking account options for bad credit.
Overview of the best checking accounts
Discover Cashback Debit
When you think of Discover, you may think of their prominent credit card options. But Discover also offers the Discover Cashback Debit account that might be exactly what you are looking for. You can enjoy the perks of cashback on your spending without a credit card.
The free checking account allows you to earn up to 1% cashback on your debit card purchases. You can take advantage of this cashback offer on up to $3,000 of purchases each month. That can equate to up to $360 in cashback each year.
Beyond this attractive perk, the account requires no credit check to open the account. This no-fee policy means that you won’t be surprised with unwelcome fees cutting into your account balance.
Chime Spending Account
Chime offers a unique online banking experience that is very open to anyone with bad credit. When you open an account, there are no fees or minimums to be wary of. Instead, you can move forward without fear of a fee. In fact, with Chime’s SpotMe feature, you shouldn’t have to worry about overdraft fees either.
I really like that this account offers many opportunities for automatic saving. First, you’ll have the chance to set up an automatic transfer of funds from your spending account to your savings account with each paycheck. You’ll be able to automatically transfer 10% of your paycheck if you are using direct deposit.
The other savings feature that can help you build a stash is an automatic transfer of your spare change. Every time you swipe your debit card, Chime will round up your transaction to the nearest dollar and transfer the difference.
Wealthfront Cash Account
The Wealthfront Cash Account is a great option if you plan to use Wealthfront’s investing features as well. Even if you are just starting your investment journey, it can be nice to have everything in one convenient platform. As a customer with bad credit, you shouldn’t have a problem opening this account if you are already working with Wealthfront.
The Cash Account offers many standard checking account features. You can receive direct deposits, get a debit card, pay bills online, and deposit checks through the mobile app. But you won’t be able to write physical checks right now.
My favorite feature of this cash account is that it comes with an APY on your deposits. Currently, the APY is somewhat low at 0.35% due to the current economic conditions. But it is still a relatively attractive rate for a checking account.
Radius Bank Essential Checking
Radius Bank offers the Essential Checking account to consumers that have struggled to find a checking account that will work with them. Although the monthly fee of $9 per month is somewhat steep, the account is completely designed to meet your needs. In fact, this account’s entire goal is to allow for a fresh start when it comes to your personal finances.
The Essential Checking account comes with some limitations. You will have a $500 daily limit on your debit card and you cannot deposit more than $1,000 with mobile check deposit.
But you will have access to a comprehensive financial dashboard that will help you take a better look at your budget, debts, and net worth. With everything in one spot, you can start to get a better handle on your finances.
HSBC Basic Checking
The HSBC Basic Checking account may not come with the bells and whistles of the HSBC Premier Checking Account, but it is a good option if you have a bad credit score that prevents you from signing up for a premium checking account.
The Basic Checking offers a no-frills approach. You can use a debit card and write checks, but you won’t find cash back or other outstanding perks. You will find a safe and secure bank account to reset your banking record. With steady responsible usage, you may be able to upgrade to the Premier option in the near future.
A $1 monthly fee is all that is required to use this account. You won’t have to maintain a minimum account balance, and you’ll have access to optional overdraft protection.
BBVA Easy Checking Account
BBVA offers access to hundreds of physical branches across the country. Not only will you have access to a physical branch, but also a streamlined online experience.
The Easy Checking Account offered by BBVA will not require a credit check to open. Instead, you can breeze through the process with your minimum deposit of $25 ready to go.
Once the account is open, you’ll have access to most standard checking account features such as unlimited check writing and mobile deposits. But you’ll also enjoy cashback rewards.
The major fee to be aware of is the monthly account maintenance fee of $13.95. Although that can add up quickly, the account features might be worth it if you have bad credit. Plus, you’ll be able to upgrade to BBVA’s Free Checking account quickly if you keep your account in good standing.
Peoples Bank Second Chance Checking Account
- Minimum opening deposit: $30.
- Monthly fees: $4.95.
Peoples Bank offers a second chance checking account that offers an opportunity for consumers with bad credit a fresh start. When you apply for this account, you’ll need to have a $30 deposit ready. But you won’t have to worry about a bad credit score standing in your way.
After you open the account, you’ll need to prepare for a $4.95 monthly maintenance fee. Besides the maintenance fee, you will not have to worry about any transaction or mobile banking fees. Plus, you’ll have the opportunity to access a MasterCard Debit Card to conduct your business.
If you live in Texas, you might have access to in-person service. But the services offered by Peoples Bank are available across the country. With a promise to serve those who have been denied a checking account due to past financial issues, this is a good opportunity.
How I came up with this list
Now that you’ve taken a look at the best checking accounts for bad credit, I’ll share how I created this list. As you know, there are many checking accounts out there, here’s why I chose these.
No bad credit limitations
First of all, I sifted through accounts to find options for people with bad credit. Although there are countless checking account options available, the pool shrinks when you have a bad credit score.
Do you like having extra fees associated with your checking account? Neither do I.
Many of the accounts designed for customers with bad credit have some fees associated with them. But I took care to avoid any accounts with totally outrageous fees. Just because you have bad credit doesn’t mean that you should pay an arm and a leg to conduct your banking business.
I sought to include a selection of banks with online and in-person options. You might prefer physical branches to an online platform, or visa versa. With that, I wanted to include options that would work best for you. So you’ll find some options for both.
What is a checking account for bad credit?
A checking account for bad credit is designed to look past your credit history. When you apply for a checking account, a bank will typically run a credit check and a Chexsystems report. The goal is to determine whether or not you’re a responsible banking customer. With that, customers with bad credit scores often get turned down.
When a checking account is designed for bad credit, the bank is willing to work with you. Although you may have limited features, it gives you the opportunity to build a strong record of responsible banking.
Why should (or shouldn’t) you use a checking account for bad credit
If you have bad credit or a negative banking record, then you should consider using a checking account for bad credit. Although you may have a rough financial past, use this new checking account as an opportunity to start fresh.
If you have a good credit score and a positive banking past, then you won’t need to use a checking account for bad credit. Instead, you can take advantage of checking accounts with more attractive features.
Most important features of a checking account
When you are considering your options, take these features into account.
If you are looking for a checking account that is willing to work with your bad credit, take a look at their eligibility requirements. Make sure that the account is willing to look past your credit history before applying.
Minimum opening deposit
Some checking accounts will require a hefty opening deposit. Others will not require one at all. Consider your unique situation. If you cannot make an opening deposit, you should shift your search to accommodate that.
As with all banking features, many checking accounts have fees throughout the experience. You might find a monthly fee or transactional fees. But they can all add up over time. Look for an account that minimizes your fee burden with the features you desire.