If you have ever written bad checks (either on purpose or by mistake), or have had other problems with a bank, there is a good chance that you are on a list maintained by a company called ChexSystems. This is not a good list to be on! If you are on the list, chances are, you are having a very difficult time getting a new bank account. If you are having a hard time finding a local bank that will allow you to open an account, you may want to try a debit card account instead.
ChexSystems is a Consumer Reporting Agency (like Experian or TransUnion) that provides a list of "high risk" customers to most of the banks in the United States. Not everyone on the list is truly "high risk" (for example, many people end up on the list through no fault of their own due to data errors, identity theft, or other mistakes). However, once you are on the list, it becomes very difficult to get a bank account, as most banks rely on data from ChexSystems to make decisions about who they will allow to open a new account. If you have been searching for a local non-ChexSystems bank, you may be frustrated and resigned to not being able to have a bank account. Don't despair! There is another option available to you – prepaid card accounts.
The primary difference between a debit card account and a checking account at your local bank is that with a debit card account you are not issued a set of paper checks. Instead, with a debit account, you will write your checks, and pay your bills, electronically using a bill payment service. The main reason that it is easier to open an account instead of a regular checking account is that with a debit card account, it is very difficult for you to bounce checks. Every time you pay a bill using a bill payment service (and try to cut an "electronic check" from your account), the bank verifies that you have enough funds in your account to cover the amount of the electronic check. This makes you less risky of a customer to the debit card bank, and allows them to open an account for you even though you are on the ChexSystems list.
This is a great advantage for you as well. Since it will harder for you to bounce checks, you will avoid having to pay expensive insufficient funds fees. It can also help you establish a better credit record and develop better bank account management skills.
If you are tired of carrying cash or writing checks all the time, you owe it to yourself to try a debit card account. You can use it to shop at bookstores, supermarkets, restaurants, gas stations, online – anywhere Visa or MasterCard debit cards are accepted – and to get cash from ATMs around the world.
With a debit card, the purchase amount is automatically deducted from your bank account. There's no credit involved and no interest charged. And transactions appear on your bank statement, so you can easily track your spending. You can also have your paycheck directly deposited into your account so that you don't have to cash your check at the local Check Cashing store.
Debit card accounts can also have savings accounts linked to them so you can earn interest on your money. Some debit cards also allow you to earn reward points (just like a rewards credit card). In general, a debit card account can give you all of the advantages of a normal checking account, and if you shop around, you may even be able to get even more benefits.
If you can't find a local bank that will let you open a checking account, consider an account – they can be a good alternative to a regular bank account.