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 Secured Card from Refresh Financial. These are real credit cards, but which require a security deposit. Although prepaid credit cards can be useful for those who do not have access to a credit card, they do not allow you to rebuild your credit rating seeing as no amount is loaned to the user.
KOHO Mastercard® Prepaid Credit Card
Fees: No fees for the KOHO and KOHO Joint accounts, $9 per month or $84 per year for the KOHO Premium account
Cash back: 0.5% for KOHO and KOHO Joint, 2% on certain purchases for KOHO Premium
Spending limit: $4,000 of purchases per day
The KOHO Mastercard® Prepaid card (formerly KOHO prepaid Visa) is one of the best prepaid credit cards in today’s current market. It combines 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 three different prepaid credit card accounts: the “KOHO” account, the “KOHO Premium” account and the “KOHO Joint” account.
The “KOHO” account has no annual fees or charges linked to the account. It offers a 0.5% cash back on all of your purchases as well as additional cash back value at certain selected retailers.
The “KOHO Premium” account has fees of $9 per month, or $84 per year (a $24 savings) as well as a free 30-day trial period. It comes with a 2% cash back on your restaurant, grocery and transportation purchases. This is an excellent prepaid credit card for travelers because it has no currency exchange fees and allows one free withdrawal per month from an overseas automated teller machine (ATM). Another major benefit of the “KOHO Premium” account is the price match whereby KOHO will reimburse you for the difference between the product you purchased and the cheaper equivalent sold elsewhere. Finally, the ” KOHO Premium ” account gives you access to the support of a financial coach who provides you with more personalized financial advice.
Although prepaid cards have no impact on your credit rating, KOHO offers a tool for rebuilding your credit. For $7 per month, the “Credit Building” program reports your progress to the credit bureaus. You can increase your rating in 6 months – all you need to do is make sure you have funds in your KOHO account. These will be collected automatically each month and you can see your rating progress directly in the app.
The third account is the “KOHO Joint” with no annual fee. It’s the perfect account to simplify the management of finance and saving goals that you share with a family member or roommate. It offers a 0.5% cash back on all of your purchases as well as additional cash back value on purchases made from certain selected retailers. You immediately receive a notification the instant a purchase is made with your account.
The KOHO Prepaid Mastercard helps you make more money and save it by rounding up your purchases and automatically placing the difference into an automated savings account. It’s available in a virtual format, ideal for online shopping. Finally, the KOHO app acts as a budgeting tool allowing you to easily track your income, spending and balance updates all in one place.
The CIBC Air Canada Conversion Visa Prepaid Card
Fees: $25 Card Replacement Fee, 2.5% Foreign Conversion Fee, certain ATM fees
Cash back: 1% until October 31, 2021
Spending limit: $3,000 of purchases (or the equivalent) per day
Frequent travelers will also be interested in the CIBC Air Canada AC 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. 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 in Pearson Airport in Toronto. This card does not have any fees for activation or topping up. Plus, until October 31, 2021, you’ll earn 1% cash back on all your purchases. This is credited in the currency in which the purchase was made. This prepaid card can have a maximum balance of $20,000 (or the equivalent in another currency) and has a daily spending limit of $3,000 or the equivalent.
The Mogo Visa Platinum Prepaid Card
Fees: $1.99 Account Inactivity, 2.5% Foreign Exchange, certain ATM fees
Spending limit: $5,000 of purchases per day
The Mogo Visa Platinum Prepaid Card allows you to have better control over your spending. Plus, its unique features help you reduce your carbon footprint when you spend. Indeed, Mogo has just launched a new program: for each transaction made with the card, the company will plant a tree. Mogo estimates that each tree absorbs 550 pounds of CO². Like any other prepaid credit card, using your money instead of relying on credit will result in you spending only what you can afford. This card charges no monthly interest and no interest on purchase transactions or the initial purchase of the card. It charges $1.50 for ATM transactions in Canada and $3 for ATM transactions abroad.
The maximum card balance is $10,000 with a maximum single purchase amount of $5,000. You can make up to ten money transfers in a 24-hour period. You can top up your Mogo card via the mobile app or at a Canada Post office. The mobile app will send you balance updates and notifications every time you spend money. An automatic transfer feature is available to help you set how much you want to spend and for how long. This card also offers a Visa Zero Liability feature to protect you against any fraudulent use. You can block your card at any time and order a new one directly through the mobile app. Another cool feature of Mogo is “MoneyClass” that provides tips and advice on the optimal moves to make with your money.
The BMO Prepaid Travel Mastercard
Fees: $6.95 per year
Spending limit: None but a maximum balance of $10,000
The BMO Prepaid Travel 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.
CIBC Smart Prepaid Visa Card
Fees : 2.5% Foreign Conversion Fee, $14.95 Card Replacement Fee, certain ATM fees
Spending limit: $3,000 of purchases per day
The CIBC Smart Prepaid Visa Card is a great solution for managing your spending, setting a budget, and easily topping up your card. You can deposit Canadian dollars on it from your CIBC chequing, savings or personal line of credit account, by proceeding online at any time or at a CIBC branch location. You can spend according to your priorities, using only the money you have. There is no minimum age requirement for this card, which can make it an interesting tool for introducing your children to the management of their finances.
You can withdraw cash anywhere in the world from ATMs displaying the VISA or Plus symbol. With access to Visa payWave contactless payment, you can easily make small purchases and your account details can be viewed online using the app or by directly signing into your account. This prepaid credit card allows you to shop securely thanks to the secure payment service verified by Visa which offers additional protection when shopping online. The maximum card balance for the CIBC Smart Visa card is $ 10,000 and you can spend up to $ 3,000 on purchases per day. Active fraud monitoring is also available in order to detect any unauthorized activity.
CIBC Smart Prepaid Travel Visa Card
Fees: $10.94 Card Replacement Fee, 2.5% Foreign Conversion Fee, certain ATM fees
Spending limit: US $2,100, €2,000, £1,500 or MXN $39,000 of purchases per day
The CIBC Smart Prepaid Travel Visa Card serves as a great payment method when you’re moving around– all you have to do is choose a currency and top up your card online through mobile banking or at any CIBC branch location. You will then benefit from a fixed exchange rate which will allow you to avoid unpleasant surprises related to exchange rates. The available currencies are US Dollars, Euros, Pounds Sterling and Mexican Pesos. Only these four currencies are available: Canadian dollars are not accepted by this card.
The minimum card amount and maximum balance vary from one currency to another. We invite you to visit the CIBC bank website to find out what these amounts are depending on your chosen currency. You will be able to access your account details online at any time and this prepaid credit card allows you to travel with peace of mind thanks to its chip card technology recognized around the world as a security standard. Active fraud monitoring is also available to detect any unauthorized activity.
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 traveling or for everyday online or 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.
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, $100, $200 and $20 to $500 and Visa offers its version in amounts of $25, $50, $75, $100, $150, $200, $250 and $20 to $500. 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 Premium Plan and $ 0.50 per purchase
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 cards. The card offers two plans: the Standard Plan, for $6.50 per month, and the Premium 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 and 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 up to $500. 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.
The STACK Prepaid Mastercard
Fees : 2.5 % Foreign Exchange Fee that Stack gives back up to $25 each month (see conditions)
Spending limit: $5,000 of purchases per day
The STACK Prepaid Mastercard provides instant rewards and tools to help you manage your money without fees or debts. It lets you spend your money anywhere in the world and get instant cash back rewards at over 140 retailers. You will benefit from exclusive offers and promotions on your daily purchases. No matter where you travel, you’ll get the best rates in over 150 currencies with no exchange fees or ATM withdrawal fees. With the STACK Finance mobile app, you can track your weekly spending and have a clear overview of the state of your finances. It notifies you as soon as you spend, send, save or receive money with STACK. There is a cool feature that allows you to save more money so you can reach your saving goals faster. Zero Liability fraud protection is offered with this prepaid credit card and allows you to block your account at any time
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. KOHO, CIBC AC Conversion Visa and MOGO 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.