Should you use a prepaid debit card instead?
One solution that is often offered for those who are on the ChexSystems report is to acquire a prepaid debit card. In many cases, you can get one of these, even if you have been unable to get out of ChexSystems. There is an upside and a downside to this strategy.
The downsides are these: First of all, it's not a bank account, it's a debit card, and what you can do with it is limited. You can't write checks, and many of them do not have online bill pay facilities. Also, depositing money into your debit card account may be problematic, since most of the non ChexSystems bank debit cards are run by national companies that are not likely to be near your home. They don't have branch offices. Deposits often must be made by expensive wire transfer. And since one of the main purposes of getting one is to avoid having to pay check cashing fees, this defeats the entire purpose of getting the card. And lastly, many of these debit cards take advantage of people looking for a non ChexSystems checking account by charging high sign-up fees and high usage fees.
There is an upside. If you shop around for a good debit card, you can find one with lower fees and more services. You still won't be able to write checks, but if you get a debit card that has online bill pay services, you may not need to. Some debit card companies have arrangements with local outlets to take deposits over the counter.
Chances are, the local ChexSystems bank that denied you an account isn't going to give you a debit card; the best way to find one is online. There are banks not using ChexSystems that specialize in offering these cards. But like any other product, there are good ones and bad ones, so be sure to read the fine print and find out what all the fees are going to be. Some of them charge monthly fees of up to $20, in addition to a sign-up fee that can be as high as $100. Most of them also charge usage fees. Although the monthly fee can't be avoided, you can find one with a lower and more reasonable fee. And although all providers do charge for withdrawing cash out of an ATM, you shouldn't have to pay more than $2 for the privilege. And don't ever settle for a card that charges you whenever you use it to make a purchase.
A debit card may be just the thing for you if you have a hard time finding banks that do not use ChexSystems. Many of the free non ChexSystems bank lists actually aren't listing full-featured checking accounts for people on ChexSystems, rather, a list of places that offer debit cards. Keep the debit card option open. ChexSystems removal is nearly impossible, and more banks are becoming ChexSystems banks every day--making the quest to find which banks do not use ChexSystems an increasingly difficult one.
