What is ChexSystems?
If you’ve never heard about it, you’ll want to keep it that way. But if you have been declined for a bank account or had one closed, you unfortunately are listed in ChexSystems.
ChexSystems is a negative database regarding checking accounts, which tracks NSF (non-sufficient funds), also known as bounced checks, as well as unpaid overdrafts. Over 80% of US banks and credit unions subscribe to this database, which they use to prevent fraud and losses to hot-check writers. What this means is that if you bounce too many checks or overdraft your account, you are at risk of having your bank account closed, and getting yourself listed in the database.
So what, you might ask. Well, your name will wind up on this database for five years, and will virtually doom your chances of opening a checking account during that period, as the banks using ChexSystems will consider you a fraud risk. Unless you have a friend or spouse who can cash your paychecks, you will wind up paying hefty fees at check-cashers, and have to live on cash, as you won’t have an ATM or debit card. It’s an expensive, inconvenient and insecure lifestyle.
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How can I get out of ChexSystems?
Unfortunately, there is no simple way out. If you find websites advertising “we can get you out of ChexSystems!”, don’t believe it. If you find yourself reported to ChexSystems:
- Do NOT close any checking or savings accounts, and keep your balances positive. If you close these, you may not be able to open them again.
- Pay all overdraft fees and NSF fees as soon as you can.
- Pay off any bounced checks.
Once you have paid all these fees, have your financial institution provide a short explanation to your ChexSystems file. You will have to speak to the bank manager personally to have this done and your record cleared, especially if there was an honest mistake. No one else can do it for you, no matter how much you pay them.
Your Second Chance Banking Options
If you are in ChexSystems, there are banks out there that may accept you. It will take some research, or you can plead your case to your local bank or credit union.
Another option you have are prepaid debit cards, essentially a check-less bank account. With direct deposit, you’ll save on the check cashing fees. Plus some of these cards also have online bill-payment, which functions quite well for most people’s checking needs.
Our recommendation is AccountNow, the #1 prepaid bank account for people in ChexSystems. They guarantee 100% approval with no credit or ChexSystems checks. With your account, you get:
- A Debit MasterCard
- Or a Prepaid Visa
- FREE paycheck direct deposit
- FREE online bill payment and online check writing
- Low cost money transfer services
- FDIC insured deposits
- AND a line of credit!
