4 Best Checking Accounts for Bad Credit in 2021

A checking account has become a necessity nowadays. But, if you have bad credit, many banks will deny your application. Fortunately, you can always turn to the best checking accounts for bad credit that cater to individuals struggling with poor FICO.

Bank accounts for low credit scores offer you a second chance to rebuild a solid credit history while getting all advantages of such accounts. We have reviewed and compared several checking accounts to help you find the one that will meet all your needs.

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Top 4 Checking Accounts for Bad Credit in 2021

1. Axos Bank

Axos Bank offers even five checking accounts with specific features that enable you to earn fair interest, cashback, and rewards on frequent purchases. Full Review

  • Monthly fee: $0
  • Minimum balance: $0
  • Overdraft fee: $0

Axos Bank offers even five checking accounts with specific features that enable you to earn fair interest, cashback, and rewards on frequent purchases. Full Review

2. Chime

Chime has some of the best checking accounts for bad credit with no annual or monthly fees. It also offers other unique perks that very few online banks provide. Full Review

  • Monthly fee: $0
  • Minimum balance: $0
  • Overdraft fee: $0

Chime has some of the best checking accounts for bad credit with no annual or monthly fees. It also offers other unique perks that very few online banks provide. Full Review

3. Varo

Varo is one of the best online banks for bad credit as it offers an unbeatable combo to its clients — the absence of fees and minimum balance requirements combined with an early paycheck. Full Review

  • Monthly fee: $0
  • Minimum balance: $0
  • Overdraft fee: $0

Varo is one of the best online banks for bad credit as it offers an unbeatable combo to its clients — the absence of fees and minimum balance requirements combined with an early paycheck. Full Review

4. BBVA

BBVA is one of the oldest financial institutions around and it is a perfect choice for people looking for a bad credit checking account with access to ATMs in various locations outside the USA. Full Review

  • Monthly fee: Varies by account
  • Minimum balance: $0
  • Overdraft fee: $38

BBVA is one of the oldest financial institutions around and it is a perfect choice for people looking for a bad credit checking account with access to ATMs in various locations outside the USA. Full Review

Best Checking Accounts for Bad Credit

Axos Bank: best for earning cashback and interest
Chime: best for combining spending and savings accounts
Varo: best for free mobile banking
BBVA: excellent for traditional banking

Detailed Reviews

Axos Bank
Axos Bank

BEST FOR

rewards and interest

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  • Monthly fee: $0
  • Minimum balance: $0
  • Overdraft fee: $0
  • Foreign transaction fee: 1%
  • FDIC insured: Yes
  • Mobile app: Yes
  • Support: 24/7 phone support

Founded two decades ago, Axos Bank is a veteran in online-only banking. Being one of the best banks for bad credit, it offers a wide range of different products, including checking, high-yield savings, and money market accounts, as well as CDs, personal loans, and mortgages.

Regarding savings accounts, Axos Bank is among the rare banks for poor credit scores that offer even five types of accounts. Such an array of accounts is supported by a vast network of fee-free ATMs. Note that Axos Bank is online-based, so the number of physical branches is rather limited.

Axos Bank Account Features & Requirements

Axos Bank offers the best free checking accounts for customers with bad credit and you have the opportunity to choose among five accounts according to your needs. Account requirements vary depending on the type of account you opt for.

As its name suggests, the Essential Checking account retains all the standard features typical for a checking account. It doesn’t offer any rewards or interest, but it also doesn’t require any minimum balance or deposits. The absence of fees makes it one of the best free checking accounts for poor credit.

Rewards Checking account allows you to earn an APY (Annual Percentage Yield) of up to 1.25%. It doesn’t require any fees, but you’ll have to deposit at least $50. However, to obtain the highest APY, you must meet three requirements. Firstly, you must have direct deposits of $1,000 or more per month. Next, you’ll have to use your debit card for 15 transactions of $3 minimum per month. You can have a slightly lower APY if you use the debit card only 10 times a month with the same minimum transaction limit.

Cashback Checking is yet another excellent checking account for bad credit that earns you 1% cashback on signature-based purchases. Other features include unlimited ATM fee reimbursement and check-writing privileges. To earn 1% cashback on purchases, you must maintain a daily balance of a minimum of $1,500. The maximum cashback you can earn this way is $2,000 per month.

Golden Checking is intended for individuals 55 and over who need to open a bank account with bad credit. It offers an APY of up to 0.20%, as well as an ATM fee reimbursement of $8 per month. The only requirement is an initial deposit of $50 upon opening an account.

If you want your children to learn how to manage their money responsibly, you can open a First Checking account for them. This joint account for teenagers aged 13-17 serves as an introduction to banking. It offers an APY of 0.25% and an ATM fee reimbursement of $12 per month. Daily transactions are limited to $100 for withdrawals and $500 for all other transactions.

Axos Bank Account Pricing & Fees

Axos Bank doesn’t charge any annual or monthly maintenance fees, which makes it the best bank to open an account with bad credit. Similarly, the bank doesn’t charge any overdraft and non-sufficient funds fees either. Hence, if you own any account other than Cashback Checking, you needn’t worry in case you overdraw your account. The bank won’t punish you by charging you extra.

Still, you need to keep in mind that specific accounts require minimum deposits. Thus, if you want to open Rewards Checking, Cashback Checking, Golden Checking, or First Checking account, you’ll need to deposit $50 upon opening.

What we liked & didn’t like

Axos Bank is undoubtedly among the best online banks for bad credit, primarily due to the absence of monthly maintenance and all other fees. The deposit of $50 required for opening some of the checking accounts is negligible, given that they offer significant cashback and rewards on every purchase you make.

The only drawback is a somewhat high amount of direct deposit required for Rewards Checking account, as well as the limited transaction and ATM withdrawal amounts for First Checking and Second Chance Checking accounts. Additionally, clients who are used to brick-and-mortar banks might find the absence of physical branches rather inconvenient.

Pros Cons
No monthly fees No physical branches
Great interest rates and rewards High direct deposit for Rewards Checking account
ATM fee reimbursement Limited number of ATM withdrawals
No minimum balance required
Chime
Chime

BEST FOR

joining spending and savings accounts

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  • Monthly fee: $0
  • Minimum balance: $0
  • Overdraft fee: $0
  • Foreign transaction fee: 0%
  • FDIC insured: Yes
  • Mobile app: Yes
  • Support: Phone and email support on business days, 24/7 through app

Chime was founded back in 2013 as an online alternative to brick-and-mortar banks that aren’t likely to accept banking accounts for bad credit. Unlike its competition, Chime keeps its offers simple and straightforward. It provides one spending account, one savings account, and one secured credit card. It is FDIC insured, so you needn’t worry about your money. However, as it is an online-only bank, it might be slightly inconvenient to make a deposit other than direct deposits from your employer.

What makes it unique and different from other financial institutions is not only the possibility to open a bank account online with no deposit and with bad credit but also the opportunity to join your spending with a savings account in case you decide to open it. Such a feature allows you to transfer your money from one account to another smoothly. All the money is directly deposited to your spendings account first, from where you can transfer it to your savings account.

Chime Account Features & Requirements

Chime is the best bank to open a checking account with bad credit as it accepts clients who have been previously denied by other banks due to their questionable banking history. What’s more, it’s completely free —  there are no hidden fees or requirements.

What helps Chime stand out from both online and physical banks is a program that speeds up your direct deposits. In other words, you may have your payments available two days before your payday, provided that your employer has deposited them.

Another perk that makes Chime the best bank for bad credit is that there are no overdraft fees. More precisely, you may overdraw your spending account by up to $100 on debit card purchases without paying a fee as long as you have a Chime’s SpotMe service activated. But, to be eligible for it, you must have regular monthly deposits of a minimum of $500. This service starts at $20, but can later be increased based on the user’s account history up to a maximum of $100.

Keep in mind, though, that clients who don’t sign in for this program or happen to exceed its limits will not have their transactions covered. Unlike other financial institutions, Chime doesn’t provide overdraft protection transfers.

Chime Account Pricing & Fees

In addition to being among the best banks with no credit check required to open an account, Chime is also among the cheapest. In addition to the absence of deposits, this online bank charges $0 annual or monthly maintenance fees. Furthermore, Chime doesn’t charge foreign transaction fees, so its debit card is suitable for use outside the USA.

Withdrawing money is also fee-free, as long as you use ATMs from a vast network of 38,000 fee-free MoneyPass and Visa Plus Alliance ATMs. However, in case you use an out-of-network ATM, you’ll be charged $2.50 per transaction. Similarly, as Chime functions like an online bank account for bad credit, it doesn’t have physical branches. Hence, depositing money might be a bit of a hassle.

Apart from having your cash deposited by your employer or payroll provider, you can make deposits via Chime’s cash deposit partners. They are available at more than 90,000 retail locations such as Walmart, Walgreens, and 7-Eleven. Note that they may charge a fee and have a limit of three deposits per day. The maximum daily amount is $1,000.

Note that Chime has limited daily and monthly transfers. Thus, if you want to transfer money online to Chime, you are restricted to $200 per day and $1,000 per month if you’re sending from an external bank.

What we liked & didn’t like

Given that its spending accounts are completely fee-free and without any deposit required, Chime offers the best bad credit checking account. Plus, it doesn’t perform a credit check, so it’s suitable for clients with limited credit history. There is no foreign transaction fee, so you can use it abroad without worrying about incurring extra costs. Chime possesses a vast network of 38,000 ATMs, so you’ll have access to a number of cash machines across the States. Probably the best feature that Chime online bank account for bad credit includes is the option to get money two days before your payday, in case your employer has deposited your salary earlier. Regarding depositing money, it could be a real nuisance, as Chime doesn’t have physical branches. Therefore, you’ll have to use other financial institutions, such as Green Dots, which will charge you a fee to deposit your money.

Pros Cons
No fees No physical branches
Overdraft protection No 24/7 support
Receive payment early Transfer limits
Wide ATM network

 

Varo
Varo

BEST FOR

mobile banking

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  • Monthly fee: $0
  • Minimum balance: $0
  • Overdraft fee: $0
  • Foreign transaction fee: 0%
  • FDIC insured: Yes
  • Mobile app: Yes
  • Support: Phone (Mon-Sun)

Varo was established in 2015 as a mobile-only bank. Its offer includes a top-rated bad credit bank account, savings account, debit card, and a range of lending products. Its fee-free accounts are excellent for young clients who are new to banking or those who are struggling with bad credit.

As a mobile bank, Varo is available for mobile platforms only, which makes it fantastic in the realm of digital banking. Yet, the lack of branches may be an obstacle when you need to deposit money into your account.

Varo Bank Account Features and Requirements

In addition to the legal requirements that all financial institutions demand, Varo requires the use of a mobile device. Without it, opening a bank account with bad credit would be impossible. Other than that, there are no requirements, such as a minimum balance or a necessary deposit.

One of the best features of Varo Bank accounts is early access to direct payments. Varo posts your deposits on the same day you receive them. This further means that you may receive your salary up to two days prior to your official payment date.

Occasionally, Varo Bank offers a referral program to its clients. Namely, whenever an individual signs up for Varo Bank accounts for bad credit via a referral link you provided, you may earn a bonus.  However, the person who you referred to has to make a direct deposit within a specified timeframe (usually 45 days).

Varo Bank Account Pricing & Fees

It’s not only great perks and the absence of minimum balance that make Varo one of the best bank accounts for bad credit. Varo is also completely free, as it doesn’t charge any annual, monthly, or maintenance fees. Likewise, it doesn’t charge foreign transaction fees, so you can use it abroad without thinking about extra costs.

Varo doesn’t charge overdraft fees, either. What’s more, it offers a No Fee Overdraft service that lets you overdraw your Varo bank account by up to $50 when making purchases with your debit card. But to activate this service on your best bank account for bad credit, you need to meet two requirements. Firstly, you have to make five debit card purchases a month. Secondly, you must have direct deposits of $1,000 minimum every month.

Also, prior to activating this service, you have to sign up for No Fee Overdraft in the app. In case you overdraw your bank account, you have a month to pay the sum you owe back. Otherwise, Varo will take it from your next deposit.

Varo Bank account for poor credit comes with a Varo Visa® debit card. With it, you can withdraw cash from over 55,000 Allpoint ATMs across the USA without a fee. However, in case you use an ATM that doesn’t belong to the Varo ATM network, you’ll be charged a fee of $2.50 per transaction.

What we liked & didn’t like

Varo Bank account is one of the best online checking accounts for bad credit for several reasons. Firstly, it’s fee-free — the clients aren’t charged any maintenance or annual fees whatsoever. Secondly, it allows you to get and withdraw your salary two days before the payday. Thirdly, it doesn’t charge an overdraft fee; what’s more, it offers a program that allows you to overdraw your account to up to $50. Lastly, it has a vast network of ATMs where you can withdraw your cash without any fees. The greatest downside of Varo bank accounts for people with bad credit is that it’s limited only to mobile phone platforms. The only way to use its services is the mobile app. Thus, it’s not quite the right choice for clients who are used to traditional banking.

Pros Cons
No fees No online platform
No-fee overdraft Difficult to deposit cash
Wide ATM network Transfer and transaction limits
$50 referral bonuses
BBVA
BBVA

BEST FOR

traditional banking

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  • Monthly fee: Varies by account
  • Minimum balance: $0
  • Overdraft fee: $38
  • Foreign transaction fee: 3%
  • FDIC insured: Yes
  • Mobile app: Yes
  • Support: Phone, live chat, and mobile apps

BBVA was founded back in 1964, only to offer its first online services in 1995. This financial institution offers top-rated bad credit checking accounts to both modern and traditional clients who prefer traditional banking and brick-and-mortar branches. Besides, BBVA has a network of 64,000 ATMs in various locations such as the USA, UK, Canada, Australia, Mexico, and Puerto Rico.

BBVA is one of the rare banks that offer online and free checking accounts, which may earn cashback and rewards on some debit card purchases via the bank’s Simple Cash Back program. However, you should note that BBVA has high overdraft fees. Also, some accounts have a rather limited number of transactions per month.

BBVA Checking Account Features and Requirements

BBVA offers its clients four types of bad credit bank accounts, each of which has different requirements and fees. However, your place of residence may limit your choice as not all accounts are available to all US citizens. In addition, BBVA may perform a soft credit check upon application, and your credit score may limit which checking accounts you’re eligible for. The vast network of BBVA ATMs allows you to withdraw money without any fees using a Visa debit card that BBVA provides you with.

Free Checking is a basic account that BBVA offers to its clients. To open it, you must pay an initial deposit of $25. Free Checking account offers access to the Simple Cash Back program, meaning that you may earn rewards on debit card purchases. Also, it offers some other perks and benefits that you have to pay to activate.

With Online Checking, you have an opportunity to open a bank account online with bad credit with a $25 initial deposit. Just like Free Checking, you may earn cashback on eligible purchases when you activate the Simple Cash Back program.

Premium Checking is the bank’s only interest-earning account that allows you to earn 0.05% APY. To open it, you need to deposit $25. Mind, though, that this account isn’t free as it charges a monthly fee.

Convenience Checking is yet another account that charges a monthly fee of $9, which can be waived if your minimum balance remains at $1,500 or deposit $500 every month (the minimum opening deposit is $25). There is no APY, but with this account, you can pay bills for free throughout the entire US.

Easy Checking is the best checking account for bad credit that BBVA will offer to applicants who are turned down for all other accounts because of their damaged credit or banking history. Like all other BBVA bank accounts, it requires a $25 initial deposit. This account is basically a second chance checking account and you can request to have it upgraded to any other BBVA checking account after a year. But to do so, your Easy Checking has to be active and with a positive balance.

BBVA Checking Account Pricing & Fees

Excluding the initial deposit, three BBVA checking accounts are free, making BBVA one of the best banks for bad credit checking accounts. Thus, if you open a Free Online Checking account, you will pay a $0 monthly or annual fee.

Premium Checking account holders, however, will pay a monthly fee of $19. But this fee will be waived in case you receive $4,000 in qualifying direct deposits, or you keep an average daily balance of a minimum of $4,000. Easy checking account charges $13.95 per month.

Keep in mind that using ATMs that don’t belong to the BBVA network isn’t free. If you withdraw money from your checking accounts for bad credit using an out-of-network ATM, you’ll pay a $3 fee per transaction.

Similarly, be careful not to overdraw your account. If you opt-in for their Courtesy Overdraft Option, BBVA will charge you a rather high overdraft fee of $38 ($32 in California). Furthermore, the bank will charge an extended overdraft fee of $23 every seven subsequent days if your account stays negative.

BBVA also charges a foreign transaction fee of 3%, so it’s not quite a good fit to use abroad.

What we liked & didn’t like

What ranks BBVA as one of the best online banks for second chance and bad credit checking accounts is the lack of annual or monthly maintenance fees. Plus, it’s one of the rare financial institutions that offer cashback rewards on debit card purchases. Premium Checking account holders may even earn an APY. But they will also have to pay a monthly fee of $19 provided that they don’t have direct deposits of $4,000.

The greatest drawback of BBVA checking accounts for bad credit history is that not all accounts are available in all states. Namely, Premium, Free, and Online Checking accounts are available for clients located in Alabama, Arizona, California, Colorado, Florida, New Mexico, and Texas. Similarly, citizens of Hawaii and Alaska can’t apply for Premium and Online checking.

Pros Cons
Low minimum deposit High overdraft fees
Vast ATM network Limited number of branches
No monthly maintenance fees Few fee-free transactions per month
Physical branches

How to Get a Bank Account with Bad Credit

Credit history doesn’t really affect your odds of opening a regular bank account. However, there’s usually a reason people have a bad credit history, and you may have had some late payments or overdrafts, which translates into bad banking history. Now, having bad banking history doesn’t mean that you don’t have any chance to open a bank account. You can try out banks that offer online checking accounts for people with bad credit Additionally, there are some strategies you may take into consideration when applying for a checking account.

Look for banks that don’t screen banking or credit history.

A great number of banks will screen your banking history when you apply for a checking account. In case you have a history of overdrafts or negative balances, the banks may deny your application.

Fortunately, not all banks require good credit, nor will they perform a credit pull when you apply for an account. What’s more, they even offer specific checking accounts for people with bad credit (referred to as second chance checking accounts).

Therefore, when you’re looking for a bank to apply for an account, peruse its policies. The majority of financial institutions openly state what information they need, whether they perform a credit pull, and what credit score you need to qualify.

Fix your mistakes.

The financial mistakes you’ve made in the past may result in your being rejected by a bank. Fixing them may help you repair your financial history. Look for negative balances, loans that haven’t been repaid, or insufficient fund fees. In case you have some unresolved issues, you may contact the bank and ask if you can pay what you owe. When you do so, the bank will remove your negative reports.

If this isn’t possible, you can turn to banks that accept bad credit or have something different to offer.

Ask the bank to reconsider.

If you have been denied a checking account, you may request from a bank to reconsider your application. There are cases when banks are ready to neglect negative credit records if your explanation is satisfactory enough.

For instance, you might have experienced an emergency that forced you to pay your bills late or skip several checks. Similarly, you might have lost your job and were forced to scramble until you find the new one. In such cases, the bank may reverse its decision.

Consider a second chance checking account.

The best second chance checking accounts will enable you to enjoy all the benefits of a standard bank account. Meanwhile, they will help you improve your credit history.

Although these accounts might be somewhat pricier than regular checking accounts, it’s still better than having no account whatsoever. Presuming that you’ll use your checking account wisely and responsibly, many banks that have second chance accounts will eventually upgrade you to a regular checking account.

Choose wisely.

To find the best checking accounts for bad credit, you should pay attention to several important factors. Firstly, check for maintenance fees. The great majority charges such fees, but you still can find some accounts that are fee-free. Most checking accounts listed in our article don’t charge annual or monthly maintenance fees.

Secondly, make sure that there are no minimum balance requirements. Namely, you may be punished each time your balance dips below the minimum amount. Therefore, look for banks that don’t have these requirements.

Thirdly, look for free services. Many best banks for checking accounts with bad credit offer various benefits and perks such as unlimited check writing, a debit card linked with the account, and free online bill payments.

Wrap Up

Even though you might be struggling with poor credit, this should prevent you from applying for a checking account. There are various banks and financial institutions that specialize in providing free bank accounts for bad credit. Besides, you may consider second chance checking accounts. Not only will such accounts provide you with typical services of standard bank accounts, but they will also help you improve your banking history. Eventually, when your banking records are satisfactory, you will be upgraded to a regular checking account.

FAQ

Can you open a checking account if you have bad credit?

Yes, bad credit isn’t usually an obstacle to opening a checking account. However, bad banking history might be, as a great number of banks will deny your application. Fortunately, there are banks and financial institutions that accept clients with poor banking history.

Another option is a second chance checking account. These accounts may be a bit pricier compared to regular accounts, but they have many benefits. Firstly, you get a chance to open an account, which is way better than not having any. Secondly, you have an opportunity to improve your banking history and be upgraded to a regular account.

What banks let you open a checking account with bad credit?

Pretty much all of them. Credit history generally doesn’t affect your odds of getting approved for a checking account. The factors that lead to your poor credit history may have also affected your banking history, however. In that case, you may consider applying for a second chance checking account that might not be free, but it’s highly beneficial for your banking history.

The online banks we have reviewed accept clients with poor credit.

Can a checking account affect your credit?

Your credit report gives an illustration of how well you can handle credit. Failing to pay your creditors, being late with your payments, or maxing out your credit card frequently will negatively impact your credit. Moreover, everything will be visible on your credit report.

Even though your checking account is a significant asset in your financial life, it has very little impact on your credit score. It is only in specific situations when it can affect or harm it. Hence, regular everyday transactions and regular use of your checking account won’t be visible on your report.

Some services, like Experian Boost, eCredable Lift, or LevelCredit, report your utility, rent, or other payments to credit bureaus and can improve your credit score. However, they are fairly limited and, in some cases, only report to their parent credit reporting companies.

What is the best bank for someone with bad credit?

If you want to apply for a checking account but you’re troubled with poor FICO, you don’t need to worry. Credit history should have no bearing on your odds of getting approved.

However, as different banks have different features, requirements, and fees, it’s vital to shop around before you definitely choose the one that seems right for you.

For example, BBVA performs a soft credit pull when you apply for a checking account but only limits which accounts are available to you; it doesn’t reject you outright. You certainly wouldn’t want to spend extra costs if you have an opportunity to bypass them.

Some of the best checking accounts for bad credit are those provided by:

  • Axos Bank
  • Chime
  • Varo
  • BBVA