Karačić turned professional in 1981 and spent the following six years with NK Osijek, where he appeared in a total of 300 matches for the club. He then moved to Croatian powerhouse Hajduk Split for whom he played between 1987 and 1989, after which he moved abroad and played for Cercle Brugge (1989–1993), Gent (1994–1995) and Saint-Gilloise (1996–1997) in Belgium and FC Linz (1995–1996) in Austria.
During his playing career, Karačić was feared for his passing and free kick abilities and was known as an excellent playmaker. After retiring from active football he first held the post of director of football at NK Osijek (1997–1998) and then, after gaining his coaching diploma, went on to coach a number of Prva HNL teams. His first coaching job was assisting Ivo Šušak at NK Zagreb (1999–2000) before taking over himself in the 2000–01 season. He then went on to coach Marsonia (2002–03), Osijek (2003–04 and 2010–11), Slaven Belupo (2004–05), Cibalia (2005–06), Slavonac CO (2007–09), Šibenik (2009–10) and Široki Brijeg (2011–12).