Money at 30: Credit Karma Money Spend Account Review
Over the past few years, the free credit score site Credit Karma has expanded into other aspects of finance. This includes offering an unclaimed funds finder as well as a free tax filing platform— which it recently announced would be sold off to Square when Intuit’s purchase of Credit Karma is completed. Now, Credit Karma is rolling out a free checking account in the form of Credit Karma Money Spend (briefly known as Credit Karma Checking before a recent rename).
As a Credit Karma customer who also has one of their Credit Karma Money Save accounts, I was invited to open a Spend account a couple of months ago. With that in mind, how does the checking account stack up against other options? Let’s take a look at what you should know about the Credit Karma Money Spend account and whether or not I think it’s a good pick.
What is Credit Karma Money Spend and How Does it Work?
Opening your account
First things first: in order to open a Credit Karma Money Spend account, you’ll need to have a Credit Karma account. However, you can easily set up your Credit Karma account and only endure a couple of extra steps in order to get started with Spend. That said, the Spend account is apparently still in the process of rolling out and may still only be available to select users. In the meantime, you can open a Credit Karma Money Save account, which currently offers 0.30% APY.
Like Credit Karma itself, Credit Karma Money Spend is free to join and use, with no minimum balance requirements or overdraft fees. Additionally, the account is FDIC insured through MVB Bank. You will need to provide some additional information when you sign-up, though. This includes confirming your name, Social Security number, and address. Once this process is completed, you’ll be able to link external accounts while you wait for your debit card.
Deposits and transfers
Once your account is created, you can then arrange to transfer funds from an existing account. This is done via Plaid, which is a secure API that allows you to log into your account. Per usual, transfers can take a few business days to clear. However, if you have a Credit Karma Money Save account as well, you can make instant transfers between the two, which is helpful.
Something that annoys me about Credit Karma Money Spend is that you can currently only link one external account at a time. Therefore, if you want to make a transfer from a different account, you’ll need to unlink your main one and add it. Then, when you want to go back, you’ll have to repeat the process. This is actually an issue that Spend shares with Credit Karma Money Save — but is also something they’re apparently looking to fix if messages on the site are to be believed. Here’s hoping that’s true as it’s a random and frustrating flaw.
Credit Karma Money Spend also allows you to set-up direct deposit. To do this, you’ll want to write down the routing number and account info to provide to your employer’s payroll department. Like with a growing number of other banking services, Spend also allows you to receive your paychecks up to two days early when they’re directly deposited — however, the availability of this feature will depend on how your company does its payroll.
In terms of other deposits, at this time, Credit Karma doesn’t offer mobile check deposit. Similarly, there’ isn’t a way to deposit cash. Hopefully at least the former will be a feature that comes to the account sometime down the road.
With Credit Karma Money Spend being a checking account (although one that doesn’t currently offer paper checks), you’ll also receive a free debit card when you open your account. What’s nice is that these cards are equipped with the latest technology, allowing you to pay via swipe, chip, or tap. It also bears a simple but fairly unique design, with the back taking on a slight minty green color and purplish mag strip. The orientation of the card is also vertical, with the number displayed in four cascading sections at the top followed by the expiration date and security code. This means that your name is printed in rather small letters near the bottom of the card — or left side if you’re holding it in the traditional way. While it’s not my favorite debit card design, it’s also nowhere near the bottom of the list either.
The debit card is a Visa, so it will be accepted at most places that take cards. Plus, according to Credit Karma’s FAQ, the card can also be used overseas (although a 1.0% foreign transaction fee charged by Visa may apply). Also, be aware that the card does have a $5,000 per day spending limit.
At the time that I’m writing this, visiting my Credit Karma Money Spend account settings shows a section under Transaction Limits that says “We’re working to provide surcharge-free ATM usage with a surcharge-free network. Once this launches, you’ll see a map to locate thousands of free, in-network ATMs.” Despite this, the Spend account is actually part of the Allpoint network, which provides more than 55,000+ fee-free ATMs. In fact, you can locate such ATMs by visiting the “Find an ATM” tab in the app. I’d suspect that this conflicting information is a symptom of the account still being in beta. Regardless, as I can say from experience, the Allpoint network is pretty vast, so you should be okay finding a fee-free machine in your area.
As John Lennon once sang, “Instant karma’s gonna get you.” Well, now that motto shines on in a new way with Credit Karma Money Spend. When you use your debit card, there’s a chance (emphasis on chance) that you might get your purchase comped thanks to Instant Karma. Transactions over $1 are apparently eligible for this perk, although the reimbursement benefit is capped at $5,000. Incidentally, this is somewhat similar to the main gimmick of Bella Loves Me, which is another digital banking account I recently reviewed.
Although I made a couple of purchases with my card, I was sadly unable to trigger an Instant Karma payment. Looking at the list of winners, that’s not terribly surprising as they seem to be fairly rare. Also important to note is that, looking at the fine print, it doesn’t look like residents of Florida or New York are eligible for Instant Karma — at least that’s my reading of the terms. So, while this is a fun element that could pay off if you won, I wouldn’t count on it being a main benefit of the account.
Final Thoughts on Credit Karma Money Spend
Following the debut of Credit Karma Savings (now Credit Karma Money Save) last year, it only makes sense that the company would create a checking counterpart. That’s exactly what Credit Karma Money Spend is, although that’s not always a good thing. Like Save, Spend is a very basic account that lacks some key features such as mobile check deposit or even the ability to link more than one account at a time. In fact, perhaps the biggest perk of the account is simply the ability to quickly transfer funds out of your Save account and access them via ATM or your debit card.
As for other potential benefits, I do like the idea (and fitting name) of Instant Karma, but it’s hard to imagine that most customers would see much value from this overall. Of course, it’s also hard to say what percentage of transactions are being rewarded. Meanwhile, if you’re a resident of Florida or New York, your exclusion from this program makes it even less worthwhile.
At the end of the day, there’s really not much I find objectionable with Credit Karma Money Spend — it’s just that I think there are better options. Personally, even though the account isn’t as attractive for new members as it was back in the day, I still think SoFi Money is a better overall pick. Also, if you enjoy the idea of Instant Karma, the very new Bella Loves Me may also be worth a shot. But, if you’re a Credit Karma fan and/or already have a Save account, then perhaps opening a Spend account will make sense for you.