Intuit, owner of TurboTax, Mint, and Quickbook, announced Monday that it will acquire Credit Karma for $7.1 billion in cash and stock. Credit Karma, being a company that offers free credit score checks, will be a fitting addition to Intuit’s collection of personal finance services.
Intuit’s other products cover budgeting, tax, and small-business needs. The addition of Credit Karma will allow Intuit to create a more complete picture of a person’s financial health and recommend appropriate products for each customer – the right type of bank account or credit card. At least that’s the expressed goal of the merger, according to Intuit representatives.
There are some concerns about whether this acquisition might actually harm consumers. In 2019, Intuit, and more specifically TurboTax, was criticized over intentionally hiding free tax filing options. The Internal Revenue Service (IRS) had made a deal with the company to provide a free option for filing taxes, but TurboTax purposely hid the feature within its site, trying to force more people to buy their paid products. Credit Karma, which has always been free, might, under Intuit, start adding fees to the service.
The Inuit deal could ultimately limit competition. Credit Karma provides some of the same services as TurboTax, for free. Though Credit Karma will remain a relatively separate entity, it’s likely that over time those free services will fade away.
As an added benefit, the acquisition will give Intuit a larger promotional platform. Since half of all U.S. millennials use Credit Karma, Intuit will now have access to a younger audience than use its current products.
Intuit plans to have closed the deal by the second half of 2020. Credit Karma will remain an independent program, run by its current CEO Kenneth Lin.