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Best prepaid cards in Canada

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Updated: December 22, 2023

We adhere to strict standards of editorial integrity to help you make decisions with confidence. Please be aware that some (or all) products and services linked in this article are from our sponsors.

We Canadians love our credit cards, but they aren’t right for everyone. A prepaid card can be an excellent payment alternative if you’d like to limit your spending and minimize debt, or if you simply don’t have the credit score to qualify for a regular credit card. And a good prepaid card today can be more than just a means of making purchases; the cream of the crop might earn cash back or rewards, offer budgeting tips, and protect you from identity fraud.

Prepaid cards are often confused with secured credit cards, and though these two card types do have some overlap in functionality, they also differ in key ways. Here are some of Canada’s best prepaid cards right now.

KOHO Prepaid Mastercard®

1% cash back on groceries and transportation

3% interest earned on your account balance

$0 Annual Fee Option to add credit building (price available in app)

0.00% Purchase APR

0.00% Cash Advance APR

Poor Recommended Credit Score

$0 Required Annual Personal Income

$0 Required Annual Household Income

  • Overview of the KOHO Prepaid Mastercard®

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    Prepaid card for cash back lovers

    The KOHO Prepaid Mastercard® is the best prepaid option if you’re looking to stay on budget while still earning rewards. KOHO works almost like a debit card—the card is actually linked to your KOHO spending account and the amount you can spend on the card is determined by your account balance. But it acts like a cash back card in that you earn cash back (1% on Groceries + Transportation) on your purchases, or more cash back (2% Groceries, Transportation, Eating & Drinking 0.5% all other categories) with KOHO Extra. You can even earn up to 2.00% interest on your whole balance with no minimum deposit requirement.

    There are no account fees and no minimum balance required with a KOHO account. Also note that you can earn an additional cash back amount (up to 5% with Easy; up to 6% with Extra) when you use your KOHO card at participating partnered merchants.

    Key features:

    Perks: Cash back, earn even more cash back at select partnered merchants, no fees for most transactions, Roundup feature to seamlessly save extra money.

    Withdraw fees: KOHO itself does not charge any fees, but you could be charged depending on the out-of-network fee charged by the ATM.

    Spending limits: $3,000 daily limit.

    Interest: Earn up to 2.00% on account balance if you set up direct deposit.

    Annual fee: No annual fee for a KOHO Easy account; $84 (or $9/month) a year for KOHO Extra.

    Learn more by reading our complete KOHO review.

Neo Money Card

15% Up to 15% on first new purchases with Neo partners

5% With Neo Partners

1%-3% on gas and groceries

3%-4% Streaming, ridesharing, and food delivery services

2%-3% With retail partners

0.5% On everything else

$0 Annual Fee Option to pay $4.99/month for premium membership to unlock higher cash back rewards

19.99% - 26.99% Variable APR

24.99% - 28.99% Cash Advance APR Plus a $2.50 fee in Canada, $5 fee anywhere else

Poor Recommended Credit Score

$0 Required Annual Personal Income

$0 Required Annual Household Income

$50 Min Security Deposit

Welcome Offer

Up to 15% on first new purchases with Neo partners

Learn more
  • Overview of the Neo Money Card

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    Direct access to your money, plus high interest and instant cash back

    The Neo Money card is similar to prepaid cards, but without the hassle of reloading funds to spend online or in-store. Instead, this card allows you full access to the balance you already hold in your Neo Money account, one of the best high-interest savings accounts in Canada (earning a high 2.25%, interest earned daily).

    With the Neo Money card, there’s no limit to the instant cash back you can earn and it’s yours to spend however you like. First-time purchases at Neo partners get up to 15% cash back and following that you’ll earn an advertised 5% cash back on average (varies depending on partner and current offers) at 10,000+ partners.

    It’s the best of both worlds here: you’re earning high interest when you don’t spend (on your balance with your Neo Money account) and high cash back when you do spend (with your Neo Money card), allowing you to double your earning potential.

    Key features:

    Perks: Grow your savings with high interest earned daily on every dollar and earn instant unlimited cash back at 10,000+ partners.

    Withdraw fees: Withdraw from any ATM worldwide with no fees from Neo’s side.

    Loading & spending limits: The Neo Money card uses your existing Neo Money balance so there’s no manual reload to worry about when spending online or in-store.

    Fees: Free everyday transactions and no monthly fees.

Mogo Visa Platinum Prepaid Card

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  • Overview for the Mogo Visa Platinum Prepaid Card

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    Reloadable card with a green twist

    The Mogo Visa* Platinum Prepaid Card (also called MogoCard) is a free reloadable prepaid card full of unique perks. Every time you use your MogoCard you’ll plant a carbon-sucking tree—for free. Mogo claims that every purchase you make with the MogoCard plants a tree to remove carbon emissions equivalent to 500lbs CO2.

    The card also provides access to a handy app where you can track your transactions, get insights into your spending habits, and benefit from free monthly credit score monitoring and identity fraud protection. You can also set spending goals, instantly freeze your card if it’s lost or stolen, and more.

    Key Features:

    Perks: Plant trees with every purchase, free credit score monitoring, free identity fraud protection.

    Withdraw fees: $1.50 domestic ATM withdrawal, $3.00 international ATM withdrawal; max $500 daily withdrawal.

    Spending limits: Can spend up to $3,000 per transaction, up to $5,000 a day.

    Loading limits: Max card balance of $10,000.

    Other fees: No annual fee but there is a 2.5% foreign exchange fee and a monthly inactivity fee of $1.99 if you haven’t used your card in 365 days.

  • Methodology: How we chose the best prepaid cards in Canada

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    Money.ca rates prepaid cards on a scale of 1 to 5 (with 5 being the best) and are based on the following criteria: annual fee, earn rate (if applicable), foreign transaction fee, penalty fees, rewards programs, sign-up bonuses, customer service, security, additional features, and acceptance. For more, read Money.ca’s complete review methodology.

    Money.ca’s business relationships have no effect on ratings.

How do prepaid cards work?

Like traditional debit and credit cards, prepaid cards can be used to make online and in-person purchases, or to withdraw cash from an ATM. They’re a great asset for budgeting, because you load a prepaid card with whatever amount of money you wish and can’t spend beyond that amount until you load the card again. For example, if a cardholder adds $500 to a prepaid card and spends $200 on a hotel reservation or night out, then they can spend a maximum of $300 more before the card becomes unusable and must be reloaded.

Some other key things to remember about prepaid cards include:

  • They’re not debit cards. Prepaid cards are sometimes mistakenly referred to as ‘prepaid debit cards.’ A prepaid card is not interchangeable with a debit card, however, as unlike a debit card a prepaid card is not connected to a checking account.
  • They’re not credit cards. The term ‘prepaid credit card‘ is also thrown around quite a bit, but prepaid cards do not work like credit cards, as their purchases are not subject to interest charges and their use is not reported to credit bureaus. Spending with a prepaid card therefore has no influence on your credit score, positive or negative.
  • There’s no free lunch. While a prepaid card might not charge an annual fee, it’s still intended to make a profit for its issuer and may charge fees to load money onto the card, make ATM withdrawals, etc. Be sure to read the fine print.

RelatedHow to create the perfect budget

Where to buy prepaid cards

A wide variety of Canadian financial institutions offer prepaid cards today, including some of the Big 5 banks, as well as a number of newer competitors. The easiest way to get a prepaid card is to apply for it online (check out our links above) and receive it by mail—this will likely be the only way to receive prepaid cards issued by smaller institutions. Bigger banks may issue their prepaid cards in person at a branch, and they may require you to have a bank account with them as a prerequisite to get their prepaid card.

Most (but not all) prepaid card issuers require cardholders to be at least the age of majority in their province. Requirements other than that are scant, which make prepaid cards a viable payment solution for those with a shaky credit history, or those with no credit history at all.

RelatedTips on building credit history for new immigrants

Prepaid credit card pros and cons

Pros

Pros

  • Facilitates easy cashless payments

  • No credit check for approval

  • No interest charged on purchases

  • Helps with sticking to a budget, because you can never spend more than what you’ve loaded onto the card.

Cons

Cons

  • Will not improve your credit score

  • Some charge fees for loading funds, ATM withdrawals, etc.

  • Typically earn less rewards/cash back and have fewer value-added features than top unsecured credit cards

Prepaid card vs secured credit card

Here’s a table to help summarize the differences between prepaid cards and secured credit cards:

Item Prepaid Card Secured Credit Card
Fees Likely no annual fee, but fees may be charged to reload the card or make ATM withdrawals May or may not have an annual fee + fees for cash advances, foreign transactions, etc.
Credit Limits You can only spend whatever amount you add to the card Your security deposit becomes the card’s credit limit
Credit Score Will not affect your credit score Will affect your credit score
Interest Rates Purchases are deducted immediately; you can’t carry a balance You can carry a balance and thus can be subject to interest rates

Should you get a prepaid card?

Even if you count yourself among those who prefer to be unbanked, these days it’s virtually impossible to make all your transactions in cash. Prepaid cards can be a fitting middle ground if you’ve sworn off credit and debit cards, but still want the convenience of cashless payments. A prepaid card can also be a useful tool for those who’ve had chronic problems repaying their credit card balances and are planning to set stricter limits on their spending.

That said, if you’re looking to set spending limitations and simultaneously improve your credit score, you might elect to go with a secured credit card.

Summary: Best prepaid cards in Canada

Credit Card Card Type Card Features Annual Fee
KOHO Prepaid 0.25%-2% cash back on purchases and easy savings $0 (Easy) or $84 (or $9/month) (Extra) / year
Neo Money card Functions as a Prepaid Earn an average of 5% instant, unlimited cash back and 2.25% interest on every dollar in your account $0
Mogo Visa Platinum Prepaid Card Prepaid Plant a tree with every purchase $0

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About our author

Sandra MacGregor
Sandra MacGregor, Freelance Contributor

Sandra MacGregor has been writing about finance and travel for nearly a decade. Her work has appeared in a variety of publications like the New York Times, the UK Telegraph, the Washington Post, Forbes.com and the Toronto Star. She spends her free time travelling, and has lived around the globe, including in Paris, South Korea and Cape Town.

Disclaimer

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