Five Prepaid Card Pro-Tips to Manage Your Finances According to Your Money Personality

prepaid card

Sponsored By KOHO

Better financial solutions exist, you just have to build them first. That’s why the road to wealth is paved with good inventions, like prepaid cards that are also alternate chequing and savings accounts. Canadians from coast to coast now have access to no-fee cash accounts, competitive interest rates on deposits, and easy cash back rewards. Prepaid cards are helping all financial personalities spend less and save more. Managing your money has never been easier.  

What is your money personality? 

We all have our quirks. How we spend our dollar bills is no exception. My husband plays it fast and loose with a debit card. I need to meditate for 72 hours before I spend anything over $50. How you handle your bacon says a lot about you. Does spending spark joy, or do you white-knuckle those dollar bills? 

While we all deviate from our tendencies once in a while, most of us embody one of 5 common money personalities: newbie, spenders, savers, investors, and debtors. Whether you pinch those pennies or make it rain, a prepaid card like KOHO helps you hack your habits. Let’s take a look. 

For the Newbie: build your credit score 

If you’re new to Canada, new to credit, or you have a damaged credit score, you cannot get a fancy credit card. You feel shut out. KOHO can help with that too. They never pull hard credit checks on their clients, so your credit score won’t be negatively affected when you open an account. 

Pro-tip for the Newbie: KOHO allows you to access the necessary features of a credit card, like convenience and cash back rewards, without risking your financial security.  What’s more, KOHO can even help repair your credit when you subscribe to their Credit Builder Program. For $5 to $10 a month, they’ll report that payment to the credit bureaus. You can boost your score while avoiding predatory subprime lenders. The best part? You don’t need to submit to a credit check to use the Credit Builder Program either. 

Prepaid pro-tip for the Spender: reload, round up, and save every time you spend

Budgeting is every spender’s kryptonite. That is why they avoid it. Rules and limits are for other people. How can a prepaid card help?

Pro tip: Because a KOHO Mastercard® Prepaid card (formerly KOHO prepaid Visa) is a reloadable card, you give yourself money to spend, but not to overspend. You can also set your account to round to the nearest dollar every time you make a purchase. You can shop guilt-free knowing that every transaction is a deposit to your savings account. 

Changing your spending style isn’t necessary. You are going to spend better with a prepaid card. Plus, you earn up to 2% cash back on some purchases. If you shop with one of KOHO’s affiliate retailers, you’ll get up to an extra 6% cash back. 

Prepaid pro-tip for the Saver: save on fees and earn higher interest rates than traditional banks

We pinch our pennies. It physically hurts when those bank fees clear our account. We don’t want to spend but we also don’t save in the bank because of all the fees. 

Pro-tip: Some prepaid cards are free to use and still act like a financial account. For example, KOHO prepaid cards offer full-service spending and savings accounts that are completely free to use. They don’t charge fees, not even for non-sufficient funds (NSF).

The free savings account that you get with the Easy plan also pays a competitive 0.5% annual interest rate, well above the industry standard of traditional banks. Paid plans can even get you up to 4.5% of interest. By switching to KOHO you’ll probably save hundreds of dollars in your first year. That is one smart spending account: your nest egg will grow even faster just by making the switch.

For the Investor: automate investing and saving 

Much like the Saver, the investor is focused on growing their money. Unlike the basic saver, though, the investor is specifically interested in maximizing returns for long-term wealth creation. Leaving money in a savings account isn’t going to cut it, it doesn’t matter how sexy that interest rate is. With a prepaid card like the one from KOHO, you can both automate and accelerate your investment contributions with a few taps of a button. 

Pro-tip: First, you reap the financial benefits of free banking services. Then, you increase your savings rate with cash back rewards, savings goals, and round-up features. Finally, you take all those accumulated savings and invest them. Simply link any of your investment accounts to KOHO and transfer funds seamlessly. Voila! Now you can set up scheduled contributions to your investment portfolio. 

For the Debtor: avoid high-interest credit card debt

Financial institutions bombard you with new credit card offers. And they try to flatter you into increasing your limit at every opportunity. Don’t fall for it. They don’t actually want you to pay off your credit card balance each month. Credit card balances mixed with high-interest rates can be a one-way ticket to Debt City. 

Pro-tip for the Debtor: A prepaid card like KOHO can help you get out of debt. Most credit cards charge an industry-standard interest rate of 19.99%. That costs the average Canadian debtor about $750 a year in interest charges. The beauty of the KOHO Prepaid Mastercard® is that you get all the perks of a credit card, without going into debt or hurting your credit score. 

In the app, you can set specific spending limits, and lock the rest away into The Vault. Money in The Vault is not attached to your KOHO Prepaid Mastercard®, keeping it safe when you’re a little too swipe-happy. And if things get out of hand, KOHO offers early access to your direct deposit paycheck, up to $100. 

Prepaid cards that act like alternate chequing and savings accounts don’t want to change your money personality. Cards like KOHO just want to make it easier for you to be yourself and save money every time you spend. Open a KOHO account today, it’s a no-brainer.

Heidi Unrau is a senior finance journalist at Hardbacon. She studied Economics at the University of Winnipeg, where she fell in love with all-things-finance. At 25, she kicked-off her financial career in retail banking as a teller. She quickly progressed to become a Credit Analyst and then Private Lender. This hands-on industry experience uniquely positions her to provide expert insight on loans, credit scores, credit cards, debt, and banking services. She has been featured in publications such as WealthRocket, Scary Mommy, Credello, and Plooto. When she's not chasing after her two little boys, you'll find her hiding in the car listening to the Freakonomics podcast, or binge-watching financial crime documentaries with a bowl of ice cream. Fun Fact: Heidi has lived in five different provinces across Canada and her blood type is coffee.