Discover 5 Amazing Prepaid Credit Cards in Canada

Prepaid cards allow people who cannot get traditional credit cards to make purchases regardless of their credit score. Moreover, a prepaid credit card can serve as an alternative to debit cards or as a means to reduce the risk of fraud when shopping online. They also offer a range of attractive features that were not available a few years ago. These include cash back rewards, the ability to create and deactivate virtual cards, earning interest on the funds deposited, and several other benefits.

EQ Bank Card – A Great Debit Card Alternative

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, and unlimited free Interac e-Transfers. Indeed, if you are ever charged fees when taking out money with your card in Canada, EQ Bank will reimburse them to you within 10 business days.

On top of that, you can earn money with your EQ Bank card. You get 2.5% interest on your balance (or 4% if you direct deposit your pay in your account). Plus, you get 0.5% cash back on all other purchases. You can use your card everywhere Mastercard is accepted. To get one, all you have to do is open an EQ Bank current account and it will be mailed to you.

The EQ card is also great for travel, as it doesn’t charge transaction fees abroad. With the EQ card, you pay only the Mastercard exchange rate when traveling outside the country – you save the foreign transaction fees often charged by other providers, which can be as high as 3% of the purchase amount.

KOHO Prepaid Credit Card – Good for Building Credit

The KOHO Mastercard prepaid card has all the benefits of a typical credit card. You can use your prepaid card anywhere Mastercard is accepted and directly charge the card with the amount you want to use via the KOHO app.

KOHO offers a basic account for $4 a month, called the Essential plan. To get it for free, new users can either set up a recurring direct deposit from their paycheck or government benefits, or ensure that a total of at least $1,000 is deposited into their KOHO account each month. To clarify, if you deposit $1,000 a month, it’s free – you don’t need to maintain a $1,000 balance all the time.

The Essential plan offers 1% cash back on groceries, meals and beverages, and transportation, plus up to 50% additional cash back at select merchants. You also benefit from a 5% interest rate on your entire balance. Other packages offer even more benefits.

Although prepaid cards have no impact on your credit score, KOHO offers a tool for rebuilding your credit. For $10 a month with the Essential account, the Credit Building program reports your progress to the credit agencies. All you have to do is make sure you have funds in your KOHO account. The $10 fee will be deducted automatically each month, and you’ll be able to see the progress of your credit score directly in the application.

Neo Money Card – Ideal for Cash Back

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. This means no more loading up the card manually. 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 still get an average of 5% cash back at partners including restaurants and bars. The Neo Money card earns as much cash back as Neo’s traditional credit card. For instance, you’ll get 1% on groceries and gas with the free plan, plus 3% on food delivery, etc. Plus, every dollar in your Neo Money Account earns 1% annual interest.

Neo Secured Credit – Go from Prepaid Cards to Traditional Credit

The Neo secured credit card is a great way to build your credit up and, in our opinion, is the best secured credit card in Canada. There is no credit check required to get this card, and approval is guaranteed as long as you are a Canadian resident, the age of majority in your province is residence, and submit the security funds. The minimum security deposit is just $50 and there is no annual fee.

The main difference between the Neo Money and the Neo secured cards pertains to your credit score. Neo Financial is now reporting secured card transactions to TransUnion (credit bureau). This can help you build (or damage) your credit score.

The Neo secured credit card offers cash back, on average, of 1% on groceries and gas, 5% in restaurants, bars and cafés, 3% with car-sharing services, and more. If your average monthly cash back is less than 0.5% on all your purchases, Neo will balance it out.

The BMO Prepaid Mastercard – For Insurance Benefits

The BMO Prepaid Travel Mastercard is another good 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 safe payment method. It’s called the BMO Prepaid Travel Mastercard but it can be used at home too.

This card allows you to pay for purchases by making a minimum deposit of $100 in advance. At any time, it can hold up to $10,000. This card has an annual fee of $6.95 but has no interest on purchases and cash advances. Prepaid cards do not usually offer insurance, but with BMO, you enjoy extended warranty and purchase protection. You can also get a 20% discount on car rentals at one of their partner centers.

The Wealthsimple Cash Card – For Investors

Annual fees: $0

Cashback: 1%

Interest on balance: 4%

The Wealthsimple Cash card comes with the Wealthsimple Cash account. With no minimum balance, you get 4% interest. Moreover, the Cash card has no monthly fees and no foreign exchange fees. If you make a purchase abroad, only the currency conversion rate of the payment network applies.

You also earn 1% cash back every time you use your card. You can choose to have your rewards automatically reinvested for you in stock or crypto.

This feature is very practical for people who already have or want to open a Wealthsimple Trade or Invest account. Otherwise, you can get your rewards in cash.

Methodology: Selecting Prepaid Cards

In order to compile this list, we took many factors into account. First of all, it is essential to consider the annual or monthly fees charged by prepaid card issuers. Most cards that made this list are free, although some charge foreign transaction fees or other occasional fees.

Next, to reach the top of our list, a card must offer certain rewards, like cash back or interest on your balance. The best prepaid cards, in our opinion, also give you access to additional features and offer flexibility and innovation. This is why you find fintechs at the top of the list.

Finally, know that all the cards on this list are relatively easy to get and are accepted almost everywhere.