Second chance bank accounts are a great choice over having to pay check cashing fees and lugging cash around with you all of the time, but when not used responsibly, they can put you in to as much trouble as a regular bank account – and maybe more! As with any alternatives to the standard banking and lending institutions, there are risks involved with second chance banking accounts.   In this post I want to offer some tips for staying safe with your second chance account, so that you never have to need a third chance!

The same basic banking rules apply to second chance accounts as they do to regular accounts.  Making sure that you have enough in the bank before you spend anything is the most obvious.  With these alternative accounts, you also have to make sure that there is enough in there to cover any of the small fees that they may charge you.  The fees will over draft your account in the case that you don’t have enough in there.

What makes second chance bank accounts riskier than other bank accounts is that they become much more expensive if you make a mistake.  The institution will become predatory in the case that you owe them money, similar to payday loan lenders.  Fees and penalties add up very quickly when you get into a sticky situation, and will quickly spiral out of control unless you take care of it immediately.

Another reason you don’t want to screw up a second chance account is because getting one with another bank is going to be nearly impossible.  After defaulting on a second chance, the likelihood of getting a third chance is extremely slim.

There are a ton of benefits to using second chance accounts, but with these benefits comes responsibility.  The last thing you want is to be back in the situation of not being able to get an account.  Don’t screw up this second chance!