If you’re like me and millions of other Americans whose finances were negatively impacted by the Coronavirus, your tax refund can’t get here fast enough.
Unfortunately, if you used Turbo Tax and opted for the Credit Karma cash advance option, it may be a while before you see it!
Although they are quick to issue you a cash advance against your refund (up to $4000), it can be a nightmare to access it.
Let me explain: When you opt-in for the cash advance through Credit Karma, you also agree to have your refund deposited into a Credit Karma spending account.
That’s where the problem lies.
Credit Karma’s banking and customer service are horrendous, leaving me and others unable to access available funds for hours or even days!
How It Works
This year Turbo Tax partnered with Credit Karma, allowing filers to access a portion of their refund early through a cash advance. The advance comes out of your refund and is deducted, along with any Turbo Tax fees, when your refund is issued.
All you have to do is sign up for a Credit Karma spending account. Turbo Tax will direct you to Credit Karma when you choose this option. Sign-up is quick and easy and you get your approval instantly in most cases.
If approved, your advance will be available within 48 hours and your refund will be deposited once released by the IRS,
When I filed I was approved immediately and my $3000 advance was available the next day. While I waited for my Credit Karma debit card, I was able to access my funds several ways. I could use my Google Pay (Credit Karma provides you with a virtual card to use on Google Pay, Apple pay, etc.), or I could transfer the funds to my PNC bank account.
Why It Doesn’t Work
For the advance I transferred half the money to my bank and left half to use with the virtual card. The transfer took 2 business days and was smooth. The Google Pay option was a bit rockier. Not all places take Google Pay, limiting where I could shop. This was especially true for online purchases.
Also, there were times the virtual card could not be read, like on the Express bus and in the supermarket. I eventually got it to work at the supermarket but not on the bus, which was quite frustrating.
I spoke to a few other consumers who opted for the Credit Karma option and many had the same issues.
One woman, Justine, a single mom of 2 from Pennsylvania, told me her card was declined several times at the supermarket and she had to abandon her groceries, leaving her humiliated and worried she would not be able to feed her kids.
Lucky for her she had a good friend who lent her the money until she was able to transfer her money over. Not everyone is that lucky!
As for me, as inconvenient as these hiccups were, they were nothing compared to what happened when I received my refund.
My refund was deposited on a Thursday morning. By then I had my Credit Karma debit card so I expected things to be easier, but boy, was I wrong!
I made a few small purchases online and used Venmo to send money to my sister in the morning. That afternoon, I went to withdraw money and could not.
I contacted Credit Karma and after 30 minutes on hold, an agent explained the company that issues their Visa debit card temporarily restricted usage to make sure the withdrawal wasn’t fraudulent. They removed the restriction and I attempted the withdrawal again, and again I was denied.
As I waited on hold, once again I did some research and realized there is a daily limit for withdrawals and what they call quasi-cash transactions (such as Venmo or Zelle). Too bad the representative, Shelly, was unable to confirm this information. She told me she did see there was a daily limit, but wasn’t sure if this was the issue or if Venmo is a quasi-cash transaction (I found out later it is).
I decided I might know more than them and would wait until the morning to conduct any transactions.
The next morning my nightmare continued. I woke up and went to pay my phone bill: transaction denied. Once again I called customer service and was told my card was restricted again! And of course, they didn’t know why. Rhivka informed me she would contact the card issuer again and get it lifted.
Surprise, she did not contact them.
One hour later I could not pay my bill or withdraw money. I called back and this time the representative, Frankel, put me on the line with the card issuer. They lifted the restriction and told me to wait 15 minutes to use the card.
I waited 45 minutes and giddily went to the bank to withdraw cash. Surely it would work now…
And I was denied again.
Beyond frustrated, I tried an online purchase- denied.
I tried to send money- denied.
I even tried to make an Amazon purchase using my Credit Karma bank account info instead of the debit card- denied.
I got back on the phone and things went from bad to worse. After another 45-minute wait I was told my card had no restrictions and that I needed to contact Venmo/Amazon/and anywhere else I was turned down by because the problem must be them.
I explained that each rejected purchase had an error message stating my bank (Credit Karma) denied the transaction. Clearly the issue was with them and needed to be investigated.
To my shock I was informed that they could not do that because they have “limited information and access” in regards to my account and my transactions.
Wait, the bank has limited information and access to my bank account?! I asked for a supervisor and was transferred to Abdul, who recited the same limited access spiel and said there was not much more they could do. He suggested I try to use my card as a credit for purchases and hung up.
At a loss for words, I went back to read up on my account again. That’s when I noticed the “daily limit” is actually a 24-hour limit.
So, I waited until 24-hours from my first transaction and tried to pay my bill- SUCCESS!
However, I still could not send money via Venmo or withdraw cash. It was not until another 24-hours passed, on Saturday, that I could withdraw cash or send it. In that time I spoke to 3 more representatives and no one had a clear answer.
And I’m not alone. Several consumers that I spoke with reported issues withdrawing money for an extended period or having transactions denied. Furthermore, they reported Credit Karma’s customer service was terrible. Representatives were not knowledgeable and worse, they were rude.
I contacted Credit Karma for a quote for this article, but they refused.
It’s ironic that a company known for fixing credit and managing money is so inept and out of control when it comes to banking. There are obvious glitches within the system, which is compounded by the horrendous customer service. The fact is, once you encounter an issue, there is little to no help to resolve it.
The idea that they can’t customers’ accounts would be laughable if it wasn’t so sad. They are doing a great disservice to those who use them, leaving already struggling Americans depending on their returns worse off than they were.
Save yourself the headache. If you haven’t filed your taxes, avoid using Credit Karma!