Credit Karma Money launches new features with aim to be the best online checking account for Americans living paycheck to paycheck 

Credit Karma Money launches overdraft coverage, giving members no-fee overdraft protection, and up to five-day early access to government benefits for those who qualify

By: Girish Balasubramanian  

With student loan payments resuming and the cost of living on the rise, many Americans are struggling to stay afloat. In the past, when consumers ran low on cash for the month, they had limited options including overdrafting their accounts or relying on other forms of debt, like payday or title loans. These options have become even more costly due to high interest rates, making it difficult for consumers to stay afloat. 

To solve this problem, fintechs and neo banks started offering benefits to help consumers smooth out their cash flow and avoid unnecessary fees, pushing traditional financial institutions to do the same. Now, fintechs, including Intuit Credit Karma, are in a race to provide online checking and savings solutions for consumers. For us, it’s all about providing features that enable our members to make financial progress. 

That’s why I’m excited to announce the two new features Credit Karma MoneyTM is beginning to roll out to help the millions of Americans living paycheck to paycheck: overdraft coverage and early access to government benefits. 

Overdraft coverage provides a safety net for members who find themselves with low balances before their next paycheck. Without overdraft, incoming withdrawals are typically declined due to insufficient funds. This can result in the member having to pay unnecessary late fees or retry fees charged by the biller. With overdraft, incoming withdrawals are honored, enabling the member to pay on time with no extra cost.1 This helps reduce the reliance on costly borrowing options to pay for everyday necessities before their next paycheck. Our members told us this feature was important to them and we listened and will begin rolling it out over the next few months to members who use Credit Karma Money as their primary bank account.

How it works:

Money members who wish to take advantage of overdraft will first need to set up direct deposits2  of $750 or more into their Credit Karma Money Spend checking account3 per month. Once enrolled in direct deposit, members will be able to spend with confidence knowing that, even if their available balance cannot cover an incoming withdrawal on their account, a purchase, depending on limits and prior overdraft history, may be approved up to a certain amount. As soon as a member’s paycheck or direct deposit hits their account, the overdrafted amount is paid off from their total balance. The result is a hassle-free feature that requires no credit checks, interest rates, penalties or fees. 

In addition to overdraft, we’ve launched early access to government benefits, a new feature designed to help those who rely on government benefits access to their funds up to five-days early.4 Providing early access to government benefits including Social Security, VA benefits, Supplemental Security Income (SSI), FEMA and more can mean the difference between putting food on the table sooner, or having to wait. This launch makes Credit Karma one of the first to offer up to five-day early access to government benefits, at scale. 

Leveraging data from Intuit TurboTax, Credit Karma is able to analyze the number of members who receive government benefits each year based on their prior year’s tax return, and proactively offer the feature to those who need it most. This is yet another example of how Intuit helps fuel innovation at Credit Karma and delivers greater impact to its members. At launch, millions of members across Credit Karma and Intuit will have the option to sign up for direct deposit through Credit Karma Money, which will allow them to benefit from its new government benefits feature. However, the feature has the potential to help a broader population, with one in every five Americans currently receiving social security benefits in the U.S. 

How it works: 

The government sends advance notice to financial institutions when it intends to make a payment to benefit recipients. Once Credit Karma Money receives notice from the federal government, it releases the funds into the member’s account, which can occur up to five days earlier than the actual payment date. This lessens the waiting time and could help smooth out cash flow for Americans who rely on government benefits to make ends meet. At launch, the feature will not include state benefits. 

How to Access:

People can open a Credit Karma Money account in minutes on our website, or by downloading the Credit Karma app through their mobile app store. Once logged in, members can open a Credit Karma Money Spend account2 and enroll in Direct Deposit through their payroll provider or federal government benefits provider. Once direct deposit is set up and the features are active5, members will automatically start benefiting from Overdraft coverage and early access to government benefits, as is applicable.  

1 You must receive direct deposits of at least $750 into your account per calendar month to be eligible for Overdraft Coverage. Overdraft Coverage is a discretionary service for qualified members which authorizes us to consider paying your ACH, debit card and ATM transactions that would have otherwise been declined due to insufficient funds. There is no fee to use this service and you can discontinue at any time. Qualified members may overdraw their Spend account up to a predetermined discretionary overdraft amount based upon risk-based factors or other set of rules. Your next deposit will automatically be applied to your negative balance. The calculated overdraft limit may change daily. We generally provide a grace period after a missed $750 direct deposit before terminating access. Use overdraft responsibly. 

2 Direct deposit(s) are electronic deposits of compensation for services (such as payroll, salary, or government benefits) made into your Credit Karma Money Spend account. Person to person transfers, transfers from one account to another or from other financial institutions and Instant Transfers (including Instant Transfers for Earned Wage Access) are not considered direct deposits.

3 Banking services provided by MVB Bank, Inc., Member FDIC. Maximum balance and transfer limits apply.

4 Early access to federal government benefits is compared to standard electronic deposit and is dependent on and subject to payor submitting benefit payment information to the bank before release date. Payor may not submit payment information early.

5 It could take between one and two payment cycles for direct deposit to automate.