Second chance banking, as the name goes, is an alternative way to acquire banking services, especially where opening a traditional checking account is impossible due to one’s past actions. A couple of activities may get done by a holder to an ordinary checking account to get denied the chance to continue owning one or even open and manage an account for themselves. If you are looking to know the causes of ordinary checking accounts closed and opting for second chance banking, this is the article. Below are circumstances that may force one to opt for a second chance banking account.
Why opt For Second Chance Banking?
There are a couple of reasons why one would opt for second chance banking. Most of the reasons are as a result of the recklessness of the person in the subject. They include:
After an Involuntary Account Closure
Involuntary account closures occur to accounts with activities against the terms and conditions of a particular bank. The bank views these activities as fraudulent hence appropriate action such as suspending or even closing the account completely takes place. In most cases, these closures are irreversible, and no step by the client may convince the bank otherwise of their actions. However, suppose the client’s activities with the closed account got justifiable reasons for their actions. In that case, the bank may consider restoring the checking account for the client, preventing them from experiencing second chance banking Texas. Involuntary account closure may also occur when a bank realizes that a client has created several accounts with other banks simultaneously, a sign of fraudulent activities.
Negative Bank Balances
Negative bank balances may be brought about by unsettled bills such as debts and overdrafts offered by the bank to the client. If disbursed and not paid as per the agreed time, these debts, then the client is liable for account suspension by the bank. The rest of the account shall subsequently lead to the client’s registration in the Chex system, a software used by banks in alerting their fellow financial institutions on individuals with terrible credit scores. It is to means that those individuals are not to get trusted with matters about debt repayment.
A Chance to Rebuild One’s Banking History
For those with a bad credit score, second chance banking in Texas is their portion. Although second-chance banking is not available for all banks, one needs to inquire about the opportunity to get involved with the particular bank, especially if they had a previous terrible credit score. The second chance banking enables those with a bad banking history to rebuild their record for the better. It is done by the proper management of the second chance checking account, after which the bank in context shall decide whether or not the client is ready for an ordinary checking account in the same bank.
The Features of Second Chance Banking in Texas
Second chance banking Texas makes it possible for those with a bad credit score but with some changes in the conditions of the accounts. These conditions aim to make the owner of these accounts responsible and improve their credit scores.
Minimum Balance Requirement
Unlike most ordinary checking accounts, second chance checking accounts are usually equipped with a minimum balance requirement for the account owners. It is to prevent the owner from depleting the account balance, an action that will not enhance the credit score of the account holder.
The second chance checking accounts are usually full of charges which are not present in an ordinary account. These charges are meant to discourage the account holder from spending much on the account. However, it encourages them to retain as much money as possible into the accounts, assisting in the betterness of their credit score.
The abilities of those with a second chance checking account are chopped off to reduce the spending power of the account holder. Such skills include writing a cheque, making overdrafts, and even the ability to receive direct deposits. If one can write cheques, then the service shall be provided at a fee or limited in the number of cheques they can write.