3 Alternatives to Owning a Checking Account

Millions of Americans are currently without a bank. Often, it’s because they cannot qualify to open an account. If you have bad credit or have been listed in Chexsystems or Telecheck within the past 5-7 years, for instance, you may have a hard time to obtaining a checking account. This problem is becoming more common since the recession made it difficult for some very responsible individuals to avoid overdrawing their accounts or bouncing checks.

Being in need of checking options but not having them is tough. So let’s look at some checking account alternatives to consider if a standard account doesn’t seem to be an option.

1. Checking-Cashing Stores

For decades, people without bank accounts have relied on check-cashing stores to gain access to their money. This has not changed significantly as there are still many locations throughout the United States that are happy to cash your check for you. However, doing so comes at a cost.

If you visit a standalone check-cashing location, it is usually requires you hand over anywhere from 3-6 percent of your check. However, if you visit chain grocery stores or even Wal-Mart (both of which usually require that you sign up for a check-cashing membership), you may be able to take advantage of check-cashing fees as low as $3 per check.

2. Prepaid Credit/Debit Cards (Check Cards)

One option that many people have already started using is the prepaid credit card or prepaid debit card, which is also often known as a check card. Depending on the type of card you acquire, there may be an option to have your paycheck deposited directly onto one of these cards.

In addition, there may be debit card features such as free ATM withdrawals or the ability to make debit purchases. Or there could be credit card features like cash advancements. Also, you may have banking account options like free online bill pay. Do note, though, that these cards sometimes come with high fees, so choose carefully.

3. Second-Chance Checking Accounts

Second-chance checking accounts are among new checking account types available to individuals with bad Telecheck or Chexsystems reports. Banks understand that we all make mistakes and to help, some acknowledge the errors made, hold customers accountable but don’t prohibit them from acquiring a bank account.

Usually, a second-chance checking account requires an account holder to pay off the balance or clear up the issue found on their report in order to qualify. Next, the person may need to complete a class that teaches financial responsibility.

Afterward, some banks allow customers to obtain a checking account with limited features over a probationary period until they prove they can manage their account responsibly. Other banks open customers up to all of their different types of checking accounts after fulfilling preliminary criteria.

Many people don’t know that in addition to traditional check-cashing options, they may be able to acquire a check card or possibly even open a bank account with their bad banking history. Find out for yourself what’s available to gain access to the easiest and cheapest option for cashing your checks.