Credit Karma Review: Simple Reasons To Consider It

In order to open a new bank account, you’ll have to provide a variety of details about yourself, including your name, Social Security number, date of birth, and several other pieces of personal information. This can be pretty stressful if you’re worried about identity theft (check my article on Facebook Marketplace Scams for a brief idea on this), but Credit Karma has created an excellent solution that makes the process much easier and more secure than it used to be. Let’s take a look at how their innovative approach to opening bank accounts helps customers and if you decide to give them a try or not.

What is Credit Karma?

The financial industry spends billions of dollars each year on marketing, and it’s no different with Credit Karma. But unlike many other financial services companies, who are often just looking to sell you another product or service, Credit Karma is completely free and aims to use only customer-generated data.

When you sign up for a free account on Credit Karma, you essentially become part of a giant research experiment where you provide your own data for analysis and credit score improvement. The idea is that all their customers can act as one big control group that can then give them insights into what actually works when it comes to improving your credit score.

Who Owns Credit Karma?

In 2011, Credit Karma raised $3 million in a funding round led by Google Ventures. The company was valued at about $300 million back then, though investors have placed its current value at more than $1 billion. If a startup becomes a unicorn—meaning it’s worth over $1 billion—this is usually an indication that it will either sell or go public.

That said, Credit Karma has no plans to go public anytime soon. Why? Because Credit Karma CEO Kenneth Lin told Business Insider: We don’t see any reason to be in front of shareholders every three months. As long as it stays private, Credit Karma can focus on maximizing profits without worrying about quarterly performance for shareholders or Wall Street analysts.

Fees

You can get most checking accounts for free, but fees are a different story. There’s nothing wrong with paying fees if you’re getting good value in return, but some banks charge a lot of fees that people might not realize or need. One example is overdraft coverage. It comes at a price and if you don’t think you’ll ever overdraw your account, maybe it isn’t worth it to pay just to be covered. ATM surcharges are another biggie.

Sure, free ATMs can be few and far between and we should always try to avoid ATM fees—but having an account with high-quality no-fee options available can be worth it for some people. The key here is to make sure you know what each bank charges so you can decide whether it’s worthwhile for you. The best way to do that? Read customer reviews on Credit Karma!

Perks

If you have a limited credit history or are trying to boost a low score, opening a new bank account can be tricky. With so many options out there, it’s hard to know what’s best for your credit score. Luckily, Credit Karma is here to help! Check out their new bank account review for detailed information on what makes each bank great for building and repairing credit. Plus, they also outline everything you need to know about checking accounts before opening one, and how you can make them work for your financial goals. You can find more info on how banking with each provider impacts your credit score in their Checking Accounts Explained guide!

Mobile App

The Credit Karma app is a useful tool to have at your fingertips. It gives you instant access to all of your credit reports and score, as well as tips and tricks for managing your finances. The app is available for both Android and iOS, so you can check in on your finances whenever you like no matter where you are. Whether or not to open a bank account will depend largely on what type of bank account it is, who it’s tied to, and how easy (or difficult) it would be to transfer money from that bank account into another one if needed.

The best way to assess whether or not opening a particular bank account would be beneficial for you is by researching different types of accounts online. You should also consider which banks offer rewards programs and other perks that might be valuable to you. If you do decide to sign up for a new bank account, make sure you choose an institution with low fees and convenient hours.

That way, you won’t find yourself getting hit with any unpleasant surprises down the road. Before moving forward with anything, though, remember to read through any paperwork carefully before signing anything! You don’t want to end up signing away rights without realizing it!

Pros

Even with a history of credit problems, you might be able to get an account with Credit Karma. The company offers both a bank account and a debit card—both free with no overdraft fees. The bank account can help rebuild your score by helping you create positive banking habits, such as making regular deposits and paying bills on time.

Plus, if you are trying to build your credit history or repair it after recent issues, Credit Karma will report all activity to major credit reporting bureaus. If that’s not enough, their reviews are user-friendly too. You can read (and leave) reviews for any bank using their service and filter by a category, like interest rates or customer service quality.

Cons

Credit Karma has no physical branches, which means customers can’t access their funds if they ever need cash immediately. In addition, Credit Karma doesn’t have any of its own ATMs, meaning users can’t get cash at their own convenience. Its lack of traditional banking services means it isn’t a good option for people who are worried about sudden expenses or unexpected costs that might pop up in life. It also lacks customer service options, so consumers will be out of luck if they ever need help from a human being to fix something with their account (like a billing error).

Is Banking With Credit Karma Safe?

If you’re going to use a credit card, bank account, student loan, or any financial product that involves money leaving your hands, it’s probably a good idea to know what you’re getting into. This is especially true if you’re thinking about using Credit Karma as your primary bank account.

Can I Transfer Money From Credit Karma to Bank Account?

Yes, you can move money from Credit Karma to your bank account. Unfortunately, there is a 3% fee for doing so, which is similar to Paypal but higher than what other banks offer. It should be noted that your transfer limit is $25,000 per month. If you plan on sending in large amounts of money, it would be wise to check with your bank’s requirements as well as any fees that may be attached before beginning transactions. Credit Karma works with over 50 different financial institutions including Chase, CitiBank, Wells Fargo, and dozens more!

The Verdict

Credit Karma is a free online bank account review service for anyone who has ever had trouble with their credit history. Credit Karma does not offer actual bank accounts but rather a way to check your own credit score and report from multiple banks in order to get you on track towards opening your own new bank account.

Credit Karma will only work if you have a pretty dismal credit history, so most people won’t qualify for an account. If you are one of those few who do qualify though, then there are certainly worse options out there! I recommend that you look elsewhere if you have a decent or even good credit history because then, it would be better to shop around at actual banks and deal with employees directly.

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