Most likely you have never come across this situation, you are standing in line to pay for something and your card gets declined for insufficient funds. Thankfully it has only happened to me a few times, fortunately I was paid within a day or 2 of the insufficient funds. But for some this is a reality that they have to deal with day in and day out. Having bad credit can make it very difficult to get access to a checking account. There are solutions today that will help you get back on the right track. Have you ever been refused a current account?
Often times when you have bad credit or not stellar credit, the banks or credit unions will often charge you a premium to use services like this as you are seen as more risky. There is likely an actuary somewhere who is calculating the riskiness of extending a checking account to you. So why would you want a checking account if you have less than stellar credit?
Compared to check cashing services and payday loans these are often much cheaper for you. They are the same as a checking account just with fees attached. The accounts likely have minimum balances and monthly fees. Additionally having a bank account is much safer than carrying cash around on your person.
These services help you get on you feet and then usually after a grace period the bank or credit union will let you upgrade to a normal checking account once you have proven yourself that you are not seen as a risk. This can vary from a year to a few years depending on the institution.
What do you need to open up this type of account?
- Your Passport
- Driver’s License
- HMRC Tax or Assessment Letter
These are just a few of the sample documents that you may need to open up an account. Just keep in mind that all the institutions for second chance credit are not necessarily banking institutions. Some in fact are money holding companies set up with guarantees who also allow you to perform MasterCard transactions.
Speaking of MasterCard, there are many prepaid credit cards available in the market today as well that let you have the flexibility of a credit card but not have to worry about going into debt as they are prefunded.
Where can you find these type accounts?
Do you have experience with these types of accounts? Ever use a prepaid credit card?