ChexSystems and secured cards: Can you still qualify?

Written by
Curtis Arnold
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Having a checking account has historically been considered an important building block toward financial success. Unfortunately, an estimated 5.9 million U.S. consumers were “unbanked” in 2021 according to a survey by the Federal Deposit Insurance Corporation (FDIC).

In simple English, these consumers did not have a checking or savings account at a bank or credit union. As you might expect, many of them also have poor credit scores.

If you’re seeking to build or rebuild your credit, our editors have recommended secured credit cards for many years due to the fact that their rates and fees are typically attractive (in comparison to other unsecured options) and, when used responsibly, can help you quickly increase your score. The problem, though, is that most secured cards require you have a checking account to pay your security deposit and make monthly payments. So what happens to the people who can’t get a checking account either because of past financial mistakes or another reason?

If you fall into this category, I hope this article helps you understand viable options for getting approved for a secured card without a bank account.

What is ChexSystems?

ChexSystems is a consumer reporting agency focused on checking account-related responsibility. 

You’ve probably heard of the three major credit reporting agencies or bureaus: TransUnion, Equifax and Experian. But you’ll probably only hear about ChexSystems if you end up on their list of consumers who have had checking accounts closed due to multiple non-sufficient funds (NSF) transactions.

So, while some consumers choose not to have a banking relationship for various reasons, many other consumers that want a bank account can’t get one due to being listed on ChexSystems.

If your application for a checking account has been denied for this reason, it’s important to understand your rights. Moreover, while there are certainly ways to get approved for a secured card without a banking account (see below), it is still helpful to have a checking account to get approved for most secured cards.

If your bank or credit union adds your name to the ChexSystems database due to the mismanagement of your checking or savings account, it will unfortunately stay in their database for five years unless the source of the information requests its removal or ChexSystems becomes obligated to remove it under applicable law.


If the information is accurate, it’s most likely going to stay there for 5 years. But if the data is inaccurate, then contact ChexSystems to investigate it (and hopefully purge it).

Beverly Harzog, consumer finance analyst and author.

Unfortunately, while you’re listed most banks will reject you if you apply for a new checking account since roughly 4 in 5 financial institutions use ChexSystems as part of their background checks on new applicants.


Like the major credit bureaus, ChexSystems must offer you a free copy of your report at least once every year according to federal law. You can use that information to dispute your inclusion on their list if your account closure was the result of fraud or identity theft.

Can being listed on ChexSystems stop you from getting a secured credit card?

Fortunately, being listed on ChexSystems does not directly prevent you from being approved for a card as card issuers normally don’t utilize ChexSystems during the application process. 

“When you apply for a card, being (listed) in ChexSystems doesn’t impact your credit score,” Harzog explains. “So unless the issuer decides to look for your name there, it’s unlikely to impact your application.”

The other related plus is that you will likely get approved regardless of your credit score as long as you meet other requirements, typically involving your income and existing debt (requirements vary by issuer, so be sure to read the fine print before applying). One major issuer, for example, boasts an 87% average approval rate.

However, the important caveat to know is that even if you get approved for a secured card, you’ll usually still need a checking account to fund your card (aka the security deposit) and/or to make monthly payments; therefore, being in the ChexSystems database could indirectly affect your ability to qualify for a secured card.

Are there secured cards that don’t require a bank account?

If you’ve found yourself in a vicious cycle of not having a bank account and not being able to get a card, rest assured that you’re not alone. Thankfully, there are a handful of issuers that understand this cycle and offer creative solutions.

The CardNamediscontinued, for example, notes if you don’t have a checking account/debit card, that you can fund your deposit by either of these two options:

  1. Western Union
  2. Money order

“It is possible to get a secured card even if you don’t have a checking account,” Harzog adds. “You don’t have as many options, but there are issuers that don’t require a bank account. But do read the terms carefully.”

OpenSky® offers these further related instructions:

  1. On the credit line confirmation page of the application, simply flip the toggle switch to “No” for the “I’m ready to fund my card today” option.
  2. Then, after you’ve been approved, you will receive an email with instructions on how and where to send in your deposit via money order or Western Union

Merrick Bank, another well-known issuer, offers the ability for cardholders to make their security deposit using MoneyGram, Western Union or money order. You can also make ongoing monthly payments by money orders.

Merrick offers the following related helpful cash payment options from their FAQ section:

  1. Visit your nearby money services counter at retail locations (such as Walmart, Kroger or others) to see what cash payment options are available.
  2. Fees can range from $1-$20 so be sure to ask the cashier about available options and fee amounts.
  3. You may use MoneyGram, Western Union or other forms of electronic payments with cash to send us your payment same day or next day depending on availability.

Other options: Second chance banking and credit builder accounts

Want to limit the fees you pay or the hassle of paying by money order or using a cash payment option? One approach that can be helpful is to get a checking account from a financial institution that offers “second chance banking.” Such accounts don’t normally use ChexSytems.

Navy Federal Credit Union, for instance, is a member-driven lender associated with the military that does not use ChexSytems. Navy Fed also offers an attractive secured card offer that you can easily get approved for if you open a checking account with them.

The bottom line is that you may qualify for a wider range of secured cards after opening a checking account at an institution willing to look past your inclusion on the ChexSystems list.

Still another approach involves credit builder accounts, which have grown in popularity over the past few years. These accounts help you build credit (fees may apply) and a few offer an attractive secured card option without requiring an existing bank account.

Chime®, for instance, offers the CardNamediscontinued. This card features no annual fees or interest, no credit check to apply and no minimum security deposit. Instead, you open a checking account with Chime and set up direct deposit in order to apply for their card; however, Chime does not use Chexsystems. (The secured Chime Credit Builder Visa® Credit Card is issued by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC, pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa credit cards are accepted. Please see the back of your card for its issuing bank.) To apply for Credit Builder, you must have received a single qualifying direct deposit of $200 or more to your Chime Checking Account. The qualifying direct deposit must be from your employer, payroll provider, gig economy payer, or benefits payer by Automated Clearing House (ACH) deposit OR Original Credit Transaction (OCT). Bank ACH transfers, Pay Anyone transfers, verification or trial deposits from financial institutions, peer to peer transfers from services such as PayPal, Cash App, or Venmo, mobile check deposits, cash loads or deposits, one-time direct deposits, such as tax refunds and other similar transactions, and any deposit to which Chime deems to not be a qualifying direct deposit are not qualifying direct deposits.

“Chime can be a good way to get a checking and savings account,” Harzog xummarizes. “It’s FDIC-insured and there aren’t monthly fees. Moreover, you can use money from your checking account to fund your card.

“But there are downsides as well,” she cautions. “A cash deposit can be expensive. And you have to sign up for direct deposit to be able to use your mobile device for check deposits. Another downside is that they charge a fee for out-of-network ATMs.”

Final thoughts

Secured cards that don’t require traditional bank accounts give consumers that are struggling with their personal finances hope. I would personally like to commend the financial institutions that are seeking to offer low or no cost solutions to consumers who deserve a second chance.

It goes without saying that if you choose to apply for a secured card using one of these options, be sure to manage your account responsibly. Harzog wisely points out that you should, “Read the terms carefully and pay your balance in full by the due date. Doing so will help you stay out of debt since secured cards can have high interest rates (APRs).”

The reward for using your card responsibly is that it will boost your score and help you graduate to an unsecured (i.e. traditional) card sometimes within just six to 12 months!

I sincerely hope these insider tips are helpful to you and would love your feedback on your personal experiences with secured cards and/or Chexsystems. Who knows, I may include a tip from you in a future article. Best wishes in using these cards to your financial advantage!

Curtis Arnold
CardRatings Founder

Curtis founded in 1998 and, in so doing, helped pioneer the concept of rating credit cards. He has been a nationally recognized expert in consumer credit for well over 20 years. He is the author of “How You Can Profit from Credit Cards: Using...Read more

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