Over the past two years, prepaid credit cards have grown in popularity in Canada. This comes as no surprise as they do have many advantages. They provide a way of using the money you have, as if it were a loan. Among other things, this allows people who have a tarnished credit score and who cannot get traditional credit cards to make purchases regardless. They are therefore an alternative to traditional credit cards.
A prepaid credit card works like a debit card, but with the benefits of a credit card. Unlike a credit card, you can't spend more than your available funds, but you have the possibility of booking a night at a hotel, renting a car or shopping online.
The fact that it is not necessary to provide a credit report or credit history makes prepaid credit cards an accessible method of payment for those with bad credit history or those who simply do not have a credit history. It should be noted that prepaid credit cards are not to be confused with secured credit cards such as the Neo Secured Card. These are real credit cards, but which require a security deposit. Although prepaid credit cards can be considered credit cards for bad credit, they do not usually allow you to rebuild your credit rating, as no amount is loaned to the user.
- KOHO Mastercard® Prepaid Credit Card
- The CIBC AC ConversionTM Visa* Prepaid Card
- The EQ Bank Card
- Neo Money Card
- The BMO Prepaid Mastercard
- The Canada Post Cash Passport Mastercard
- The Vanilla Prepaid Visa and Mastercard
- The Titanium+ Prepaid Mastercard
- The American Express Prepaid Cards
- Frequently asked questions about prepaid credit cards
KOHO Mastercard® Prepaid Credit Card
- KOHO is a full-service app and reloadable prepaid credit card with no hidden fees.
- Get $20 when you sign up for a free KOHO account with code HARDBACON and make your first purchase*.
The KOHO Mastercard® prepaid card (formerly KOHO prepaid Visa) is one of the best prepaid credit cards in today’s current market. It has all the benefits of a typical credit card with the exception of interest charges. You can use your prepaid card anywhere Mastercard is accepted and directly credit the card with the amount you want by using the KOHO app or by electronic transfer. KOHO offers four different prepaid credit card accounts: the Easy plan, the Essential, the Extra and the Everything.
The Easy plan has no annual fees or charges linked to the account. It offers 1% cash back on groceries, recurring bills and service payments. You also earn 0.5% interest on your entire balance. There is no annual fee, but it does charge a 1.5% conversion fee for foreign currency transactions.
The Essential plan is available for $4 a month or $48 a year, but you get a free 30-day trial. With this one you get 1% cash back on groceries, bills and services, meals and beverages, and 0.25% on everything else. You get 1.5% interest on your entire balance.
The Extra is available for $9 per month, or $84 per year (a $24 savings). You also get a free 30-day trial here. With this account, you get 2% cash back on groceries, transportation, meals and beverages and 0.5% on everything else. You also get 2% interest on your balance. This package also entitles you to one free international withdrawal per month and comes with no exchange rate.
Finally, for $19 per month, you get Everything, which is great if you plan on saving because you get a 4% interest rate on your balance and all the other benefits of the Extra plan. Moreover, all plans include higher cash back (5 to 10%) at selected partners such as Kernels and Pizza Pizza.
The KOHO prepaid Mastercard® helps you earn more money and save it by rounding up your purchases and putting the difference directly into an automated savings account. The card is available in a virtual format, which is ideal for online shopping. Finally, the KOHO application acts as a budgeting tool allowing you to easily track your income, expenses and balance updates in one place.
You can use this feature to automatically contribute a fixed amount on a daily, weekly, or monthly basis to save for you next trip with KOHO. The KOHO prepaid Mastercard lets you earn 6% on Booking.com, as well as up to 2% cash back on dining and eating out abroad when you subscribe to the Extra or the Everything plan. While abroad, you are still protected by Mastercard’s Zero Liability Policy.
While prepaid cards have no impact on credit scores, KOHO offers a tool to rebuild credit. For $7 (Essential, Extra and Everything accounts) or $10 (Easy account) per month, the Credit Building program reports your progress to the main credit bureaus. In six months, you can increase your score: all you need to do is make sure you have funds in your KOHO account. These will be automatically reported each month, and you can see your score progress directly in the application.
The CIBC AC ConversionTM Visa* Prepaid Card
No fees to load the card
No fees to get the card
No foreign transaction fees on purchases
Load 10 foreign currencies
Use anywhere Visa is accepted
Frequent travelers will also be interested in the CIBC Air Canada Conversion Visa prepaid card. The biggest advantage of this card is that you can load up to 10 currencies on it, available in 45 countries. In addition to the Canadian dollar, you have access to US, Australian and Hong Kong dollars, the euro, the British pound, the yen, the Turkish lira, the Swiss franc and the Mexican peso. Not only will you have no additional conversion fee, but you can also lock in an exchange rate every time you top up your card.
There’s no fee to order the card, no fee to load it and no conversion fees when you make a purchase. You can top up your card through the AC conversion app or on the website and transfer funds between currencies. The app also allows you to track your spending.
You can get your card online or at a CIBC branch at Pearson Airport in Toronto. There is no activation or loading fee. For a limited time, you can earn 1% cash back on all purchases. This card is credited in the currency in which the purchase was made. This prepaid card can hold a maximum balance of $20,000 (or the equivalent in another currency), and the daily limit for adding funds is $3,000 or the equivalent.
Please note that CIBC now only offers this prepaid card. CIBC Smart Visa cards are no longer available or functional.
The EQ Bank Card
- No fees
- Earn 2.5% interest on all your money
- Get 0.5% cash back on all your purchases
Open a Savings Plus Account to get your free EQ Bank Card.
The EQ Bank Card can be your new best friend. First of all, it is completely free. That means no monthly fees, no additional foreign currency fees and free withdrawals from any ATM in Canada. Indeed, if you are ever charged with fees when taking out money with your card, EQ Bank will reimburse you those within 10 business days.
On top of that, you can earn money with your EQ Bank card. You earn 2.5% interest on your balance, right up until you spend it. Plus, you get 0.5% cash back on all your purchases. You can use your card everywhere Mastercard is accepted. In order to get one, all you have to do is set up a Savings Plus Account from EQ Bank and then charge your card with funds.
Neo Money Card
Awarded the best savings account by the Financial Post, Neo Money is the high interest saving account for you!
- Unlimited free transactions
- No "minimum" required
- Automate your payments
- Easy Funding.
If you're tired of measly cash back rates, or worse – no cash back at all, the Neo Money Card is a great choice for both new and current Neo Money account holders. It's super easy to use since the funds come straight from your Neo Money account, no more loading up the card manually. And because you're spending money from your Neo Money account, there's no need for a credit check. Plus, there are no monthly or annual fees to worry about.
When you make your first purchase at any of the Neo partner stores, you can get up to 15% cash back! After that, you'll still get an average of 5% cash back at selected partners like Herschel, Contiki and Pet Planet. This includes 6% cash back at restaurants and 2% on gas and groceries. If you apply now, you can get a $25 welcome bonus. Plus, every dollar in your Neo Money Account earns 2.25% annual interest and you get unlimited free daily transactions.
The BMO Prepaid Mastercard
Fees: $6.95 per year
Spending limit: None but a maximum balance of $10,000
The BMO Prepaid Mastercard is a secure payment card prepaid with your own money. You can top it up and use it anywhere Mastercard cards are accepted, all while being protected against fraudulent use. This makes it a safer payment method than cash during a trip. The BMO Prepaid Travel Mastercard comes with Zero Liability protection in case of any unauthorized use. It allows you to pay for purchases for amounts ranging from $100 to $10,000 Canadian. This card has an annual fee of $6.95 but has no interest on purchases and cash advances.
The Canada Post Cash Passport Mastercard
Fees: $15 to buy the card, $3 for top ups and 1.5% on each transaction
Spending limit: $4,000 of purchases per day
The Canada Post Prepaid Rechargeable Mastercard is ideal for use while travelling or for everyday online and in-store purchases. You can acquire it from any Canada Post office and it is accessible without having to provide credit history or banking information. This card keeps your money safe with chip protection and a PIN that is independent from your bank account. You can load funds to the card and use them immediately. This Mastercard is perfect for shopping on US and international websites in local currencies seeing as it lets you choose between seven different currencies: Canadian dollars, US dollars, euros, British pounds, Japanese yen, Australian dollars, and Mexican peso.
Mastercard charges $15 for the acquisition of the card and $3 for any top-ups. The card has an inactivity fee of $2.80 per month if it is not used after 12 months. Regarding transaction fees, Mastercard charges 1.5% for domestic plan spending only. To acquire a Canada Post prepaid credit card, simply go to your post office with a valid photo ID. Clients can load Canadian dollars onto their card and lock in their exchange rate. This card can be reloaded at any Canada Post office near you, in cash or with a debit card.
The Vanilla Prepaid Visa and Mastercard
Fees: From $3.95 to $8.95 for activation, depending on the amount of the card
Spending limit: The amount of the card
The Vanilla Visa and Mastercard prepaid cards work like gift cards. No PIN is required and the funds deposited to your card have no expiration date. The prepaid amount can vary between Mastercard and Visa: Mastercard offers its version of the prepaid card in amounts of $25, $50, $60, $100 and $200 and Visa offers its version in amounts of $25, $50, $75, $150 and $250. Both are also available in $20 to $500 denominations (variable load). Activation fees vary depending on the amount and card provider. Vanilla prepaid cards can be acquired at many retailers across Canada, including Walmart, Jean-Coutu, Best Buy, and Petro Canada, Shell and Ultramar gas stations. They are activated upon purchase, as soon as you checkout at the cash register.
The Titanium+ Prepaid Mastercard
Fees: $9.99 + tax for the purchase, $6.50 per month for the Standard Plan and $12.99 for the Bundle Plan
Spending limit: $7,500 of purchases per day
The Titanium + Prepaid Mastercard is available at all Money Mart and Insta Chèques locations across the country. Once you purchase it for a fee of $9.99 plus tax, you can use the Titanium + card at any location that accepts Mastercard. The card offers two plans: the Standard Plan, for $6.50 per month, and the Bundle Plan, for $12.99 per month. The latter plan allows you to avoid fees on several transactions, including in-store purchases. With the Standard Plan, a fee of $0.50 is charged for each purchase. It’s possible to have a balance of up to $15,000 on this card and you can make purchases of up to $7,500 per day.
One of the most interesting things about the Titanium + prepaid card is the possibility to transfer funds from your payroll or other social benefits to your card with the DirectLoad Program. All you need to do is provide a form to your employer or service provider to set up a direct deposit. Otherwise, you can reload your card at all Insta Chèques/MoneyMart locations, as well as at several stores participating in the Vanilla Reload Program, such as Familiprix and Couche-Tard.
The American Express Prepaid Cards
Fees: None for the Reward Card, from $3.95 to $7.95 for the activation of the Retail Card
Spending limit: The amount of the card
The American Express prepaid cards are especially interesting for small, everyday purchases. The American Express Retail Prepaid Card is available with several pre-configured amounts. After activation (the fees of which vary depending on the amount of the card), you pay no monthly fees and can use the card anywhere American Express is accepted. Plus, your funds never expire and if your card is lost or stolen you can receive a replacement card with the same remaining balance. The American Express prepaid card for the Rewards Program allows you to redeem your points in exchange for an amount which is loaded onto the card. This amount ranges from $25 to $1,000, which is 3,125 to 125,000 points. It includes the same benefits as the regular prepaid card and can be ordered directly through the American Express Rewards Points Program portal.
Frequently asked questions about prepaid credit cards
They are usually purchased in advance and are not linked to any bank account. These cards can be purchased at stores, gas stations, convenience stores, grocery stores or online. For example, KOHO and CIBC AC Conversion Visa cards are available online.
A prepaid credit card works like a debit card, but with the benefits of a credit card. Unlike a credit card, you can't spend more than your available funds, but you have the possibility of booking a night at a hotel, renting a car or shopping online. A prepaid card does not help build your credit history. Unlike a debit card, it a prepaid card is not linked to your bank account.
You can use most prepaid cards online. Certain store-bought prepaid cards are not valid online, so you have to read the terms and conditions on the card before you buy it. Certain online merchants may not accept a prepaid card, but that is a case-by-case basis.
The activation process varies depending on the prepaid card you choose. Some cards can be purchased online and activated with the first purchase, while others can be purchased and activated at the same time. When you purchase your prepaid card, check the activation terms and conditions that come with it.
Depending on your card, you can check your balance online or on the linked app (for KOHO, for example), or when you make a purchase, the cashier can tell you how much is left on it, or the balance can be displayed on your bill. You can find out how you can check your balance when you get your card.
Find the best credit card for your needs by answering a few questions.
About The Author: Sophie Albo
Sophie is the content specialist at Hardbacon. She is currently in her 3rd year of a bachelor's degree in marketing at Concordia University. Her passion for Fintech and was revealed during the 2016 Cooperathon where she received special award.
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