Where to Bank if You Owe a Bank Money and Can’t Open a New Account

If you’ve had bank account trouble before, you may owe money to a bank. This can make it difficult to open an account anywhere else. If you owe a bank money, it will show up on your ChexSystems or Early Warning Services report.

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This usually means that you won’t be able to open a new account until you clear it up.

However, bank accounts are essential for managing money and paying bills. So, let’s go over some of your options.

Can I open a bank account if I owe another bank money?

If you owe money to a bank, chances are you won’t be able to open an account at another bank that uses ChexSystems.

These banks see your ChexSystems report and your negative banking history. If they consider you to be high risk, they will typically turn down your application.

This can leave you with fewer options to open a bank account at another bank.

What Is ChexSystems?

Everyone with a bank account has a possibility of being reported to ChexSystems. However, only people with negative banking history show up in ChexSystems.

If you have a ChexSystems record, it means you either owe the bank money, bounced too many checks, or had bank accounts closed on you, among other issues.

ChexSystems helps other banks and credit unions know that you are high risk, so they don’t take a chance like the banks you had issues with did.

Here are a few reasons you may show up on ChexSystems:

  • Your bank closed your account involuntarily. This happens if you bounce too many checks or don’t obey the transfer/withdrawal limits.
  • Unpaid fees. If you owe the bank money, they’ll report it to ChexSystems, so others know you are high risk.
  • You abuse your ATM privileges. Whether you withdraw beyond the daily limits too often or you overdraft frequently, banks report it to ChexSystems.
  • Bounced checks. Writing checks and not being able to cover the amount costs you money and ruins your banking reputation.
  • You overdraft too frequently. If you withdraw more than you have in your account, it’s an overdraft (not a bounced check). Not only will you pay fees, but you’ll also get hit on the ChexSystems report.

But, when you’re in ChexSystems, you may wonder about where to bank if you owe a bank money and can’t open a new account?

You can start by finding ways to clear up ChexSystems.

3 Ways To Clear Up ChexSystems

ChexSystems, as we said, only reports ‘bad’ data. If you had hiccups in the past from banks and other financial institutions, they’d show up on this report. But, there are three ways to clear it up.

1. Pay Your Debts

If you owe money to a bank or credit union for a bounced check or unpaid fees, pay them. The quicker you pay them, the more leverage you’ll have to get the issue removed from ChexSystems, and boost your credit score.

When you pay the bank back, ask them to remove the issue from the system. If they won’t, get a paid receipt and submit it to ChexSystems to see if they’ll remove it from your profile.

2. Check Your Report For Errors

Everyone has access to one ChexSystems report annually. If you were turned down for an account by a bank, you get access again.

If you review your report and see any incorrect or out-of-date information, you can also submit a dispute on ChexSystems’ website as well as with your financial institution.

Read the report and find out what is preventing you from getting a new account. If it’s a clerical error or fraudulent information, prove it’s incorrect and have it fixed.

3. Wait For The Information To Fall Off

Although federal regulations allow ChexSystems to keep records for up to seven years, most information stays in ChexSystems for five years. While that may feel like an eternity, it’s not. At the end of five years, you may be able to get approved again for new bank accounts.

Until then, knowing where to bank if you owe a bank money and can’t open a new account is important.

Are there banks that don’t use ChexSystems?

Yes. While more than 80% of banks and credit unions use ChexSystems, there are plenty that don’t.

Best Banks That Don’t Use ChexSystems

U.S. Bank

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  • Up to $450 bonus
  • $25 minimum opening deposit
  • Monthly service fee can be waived
  • No ATM transaction fees at U.S. Bank ATMs and no surcharge fees at MoneyPass® Network ATMs

U.S. Bank is currently welcoming new applicants in 26 U.S. states with a special offering:

  • Earn up to $450 when you open a new U.S. Bank Smartly® Checking account and complete qualifying activities.
  • Subject to certain terms and limitations. Offer valid through September 26, 2024. Member FDIC.
  • Offer may not be available if you live outside of the U.S. Bank footprint or are not an existing client of U.S. Bank or State Farm.

The account includes a free debit card that can be locked or unlocked if ever misplaced or stolen. There are no ATM transaction fees at U.S. Bank ATMs and no surcharge fees at over 40,000 MoneyPass® Network ATMs.

The checking account requires a $25 opening deposit and a $6.95 monthly fee. This fee can be waived for those 24 and under, 65 and over, or military members (must self-disclose).

Additionally, the fee can be waived with monthly deposits of $1,000+, an average balance of $1,500+, or holding an eligible U.S. Bank credit card. Qualifying for any Smart Rewards® tier (Primary, Plus, Premium, or Pinnacle) also waives the fee.


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  • Up to $300 sign-up bonus with direct deposit
  • No minimum opening deposit
  • Earn up to 4.60% APY
  • Over 55,000 fee-free ATMs
  • Early pay with direct deposit

The SoFi Checking and Savings account ensures a hassle-free experience with no overdraft fees, minimum balance fees, or monthly fees.

For a limited period, SoFi is offering a rewarding bonus of up to $300 to customers who make qualifying direct deposits. Plus, enjoy access to over 55,000 Allpoint® Network ATMs courtesy of SoFi.

You can also enjoy the convenience of receiving your paycheck up to 2 days in advance with SoFi’s early direct deposit feature.

One of the defining features of SoFi is its impressive annual percentage yield (APY) – a hefty 4.60% on savings and 0.50% on checking balances, all tied to direct deposits. There’s no need for a minimum direct deposit amount to enjoy these rates.


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  • Build credit and earn points with every swipe
  • No minimum opening deposit or maintenance fees
  • Get paid up to 2 days faster
  • No credit check or ChexSystems

Current is one of the fastest-growing online banking solutions in the U.S., with over one million members. However, Current is a fintech company, not a bank. Most importantly, Current does not use ChexSystems or pull your credit report.

With Current, you can build your credit just by using your debit card for day-to-day transactions. No borrowing required, and no credit check involved.

The Current mobile banking account offers fee-free overdraft protection of up to $100, 40,000 fee-free Allpoint ATMs, and no minimum balance or hidden fees.

With early direct deposit, you can get paid up to two days ahead of schedule. You can also earn up to 15x points, and get cashback with your debit card.

Current banking services are provided by Choice Financial Group and Metropolitan Commercial Bank, Members FDIC.

Other Alternatives To Banks

If you’re having trouble opening a bank account due to unpaid bank fees or a history of overdrafts, you can try several alternatives, which include the following.

Second Chance Checking Account

Second chance checking accounts are offered at both, online and brick-and-mortar banks. As the name suggests, they are checking accounts that give you a second chance. They may check your ChexSystems but still give you an account. To make up for the added risk, they may have higher minimum balance requirements or charge higher fees.


  • You get a second chance at owning a checking account.
  • Many local banks offer this option.
  • You have access to a debit card and paper checks.


  • Most second-chance checking accounts have much higher fees.
  • You may need a higher balance to keep the account.

Prepaid Debit Card

Prepaid debit cards act much more like a bank account than most people realize. Some prepaid cards allow direct deposit of your paycheck, online bill pay, and tax refund receipts.

Tired of the traditional banking experience? You could opt for a prepaid debit card instead.


  • It’s a safe place to store your money and spend it how you want.
  • You can pay your bills using a prepaid card without checks.
  • You can set up direct deposits to avoid fees when depositing cash.


  • Most prepaid cards have high fees.
  • You won’t have access to paper checks.

A list of the top prepaid debit cards can be found here.

Use Cash

It’s not ideal, but switching to a cash lifestyle may be necessary for now. When you live a cash lifestyle, you have to get creative with paying bills. But, combining a cash lifestyle with a prepaid card or secured credit card can be the perfect combination.


  • You can’t spend more than you have.
  • It’s easy to use the envelope cash system so you can track where you spend your money.
  • There aren’t any fees.


  • If you don’t track where you spend your cash, you can easily overspend.
  • It’s challenging to pay your bills.

Secured Credit Card

If you need a way to pay bills and can’t qualify for a checking account or any other alternatives, a secured credit card may be the answer you need.

With a secured credit card, your credit line is equal to your deposit. You can then use the credit card as a standard card, making minimum payments or paying the balance off in full. If you miss any payments, though, the credit card company will keep your deposit.


  • You can securely pay bills online or over the phone.
  • Most secured cards don’t have high fees.
  • It’s easy to budget when you’re working with a specific credit line.


  • It’s easy to get in over your head in credit card debt.
  • You don’t have a bank account to keep your money.

Final Thoughts

Knowing where to open a bank account if you owe a bank money and can’t open a new account is essential. Everyone needs a way to manage their money and pay bills. If you are in ChexSystems and can’t get a bank account, there are alternatives.

Meanwhile, it’s essential to clear up your ChexSystems report so you can open a traditional bank account. With good banking habits, you can work your way up to opening checking or savings accounts with benefits rather than the basic accounts available to those starting over.

Samantha Hawrylack
Meet the author

Samantha Hawrylack is a personal finance expert with a passion for writing and SEO who has been featured in publications like Grow, MSN, CNBC, Clever Girl Finance, Credit Donkey, and more. She writes about various personal finance topics including credit, loans, real estate, investing, and more.