I Can't Open a Checking Account: What Are My Options?

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If you are unable to open a checking account due to unpaid bank fees or a history of overdrafts, you may be at a loss as to what you are going to do to pay your bills or simply survive financially.

Many people take for granted the benefits and advantages that a checking account affords them. It is easy to write checks and pay your bills online with automatic bill payment. It's easy to go out to dinner or buy groceries with a debit card.

If you find that you are unable to open a checking account, you do have a few options available to you.

Open an Account at Another Bank

First, you should look at other banks and credit unions in your area. You may not qualify for the best account at the bank, but many banks may work with you, though you may have to pay higher fees.

Also explore credit unions, which are another option other than your traditional bank. If you can't qualify for a checking account right away, try starting off with a savings account. This will help you to build a relationship with the bank, which will hopefully open the door to opening a checking account in a few years.

Clear Up Your ChexSystems Report

ChexSystems is a nationwide consumer reporting agency that compiles information on closed checking and savings accounts.  If you have been reported to ChexSystems, then you will need to clear up the report before you can open an account. You can call ChexSystems at 800-428-9623 or visit their website to request your report. If you have been reported to ChexSystems, it means you owe a bank money for an account that you have overdrawn.

If you do find that you owe a bank money after looking at your ChexSystems report, it's important to work with your creditors or those banks you owe money to come up with a plan to pay off that debt.

The bank may allow you to come up with a plan to pay off your debt, or they may want you to make a lump payment. This is an important step, as most banks will not even let you open a savings account until you have cleared up your ChexSystems report.

Use Alternative Methods

If you find that you cannot find a bank or credit union that will work with you, you will need to address the way that you pay your bills and mortgage. You may need to switch to money orders for some of your major bills since you should never send cash via mail.

You can purchase money orders through your bank, the post office or many other locations. You should shop around and find the price that is right for you. When you pay this way, be sure to include your account number on each money order. You should also keep a ledger at home that states the money order number and place that it was purchased and what bill it went towards in case it gets lost in the mail.

You can also use a prepaid credit card to pay bills online. This type of card can make it easier to keep functioning without a checking account.

Try Switching to Cash

This is an excellent time to switch to the envelope budgeting system. By switching to a cash-only budget, you can begin to discipline yourself for when you are able to open an account again.

This type of budget is great for those who have trouble controlling their spending since once it's gone, it's gone.

Consider a Prepaid Credit Card

Additionally, you may consider getting a prepaid credit card to make online purchases or to rent a car. These cards will not allow you to spend over the amount that you deposit on the card.

Keep in mind that you will pay a fee every time that you deposit money into a prepaid credit card account, but the convenience may outweigh the cost when you are in this financial situation.

Commit to Changing

Finding yourself unable to get a checking account should be a wake-up call to change the way you deal with money.

Make a commitment to start living on a budget and get your finances under control so that you are never in this situation again. Pay off your debts, and commit to staying out of debt in the future. Work on rebuilding your credit history, and keep a close eye on your spending and saving habits. This can help you to turn this headache into a learning experience.

Updated by Rachel Morgan Cautero.

Article Sources

  1. MyCreditUnion.Gov. "Why Choose a Credit Union?" Accessed Nov. 25, 2019.

  2. ChexSystems. "About ChexSystems." Accessed Nov. 25, 2019.

  3. Consumer Action. "Checking and Savings Accounts." Accessed Nov. 25, 2019.

  4. United States Post Office. "Domestic Money Orders." Accessed Nov. 25, 2019.