Best Prepaid Credit Cards for Canadians
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![A headshot of Rachel Cribby who is a contributing author at WealthRocket]()
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While there’s a lot to say about the convenience of traditional credit cards, they’re not without pitfalls. If you’re looking for a more predictable way to manage your money while still having the ability to make credit card purchases, then a prepaid credit card might be right for you. They can also be a great tool for those with lower-than-average credit scores who may find regular credit cards to be out of reach.
So, who offers the best prepaid credit card in Canada? The good news for Canadian consumers is that you have a variety of options.
In this article, we round up the best prepaid credit cards in Canada and outline the different considerations you should make when deciding to get a prepaid credit card.
The best prepaid credit cards in Canada
Neo Money Card
- Welcome Offer None
- Annual Rewards $TBD Learn how we calculate this.
- Annual Fee $0
- Minimum Income Required None
Wealthsimple Cash Card
- Welcome Offer None
- Annual Rewards $240 Learn how we calculate this.
- Annual Fee $0
- Minimum Income Required None
KOHO Prepaid Mastercard
- Welcome Offer None
- Annual Rewards $100
- Annual Fee $0 (Easy); $48 (Essential); $108 (Extra); $228 (Everything)
- Minimum Income Required None
1. KOHO Prepaid Mastercard
KOHO Prepaid Mastercard
Rewards
- 1-2% Earn up to 2% cash back on groceries, transportation, and dining out, depending on the plan you choose.
- 0.25 - 0.5% Earn up to 0.5% cash back on all purchases, with three out of the four plans offered.
- 0.5-4% Collect up to 4% interest on your balance, paid monthly, depending on the plan you choose.
- Welcome Offer None
- Annual Rewards $100
- Annual Fee $0 (Easy); $48 (Essential); $108 (Extra); $228 (Everything)
- Minimum Income Required None
Pros
- Four plan tiers to choose from
- Credit-building add on for $5-$10/month, depending on plan tier
- Round up your purchases and set that amount aside in your KOHO app to be cashed out whenever you like
- Up to 6% extra cash back at select merchants with the highest plan tier
Cons
- Monthly fee for three of the four plan tiers
- Balance limit of $50,000 for all plan tiers
- Foreign transaction fees on some plan tiers
KOHO’s millennial-friendly social media advertising makes it likely that you’ve seen its name before. But if you’ve been unsure of what exactly this company does, here is some demystification.
KOHO is a fin-tech company (not a bank) that has been around since 2014. The company offers mobile app banking services as well as a prepaid Mastercard. Think of it as a credit card that has been pre-loaded with funds. Not only does this make it easy to stay within budget, but users also have the option of using RoundUps, which will round up purchases to the next dollar amount and deposit the spare change in a chequing account.
You have the option of four plan tiers: Koho Easy, Koho Essential, Koho Extra, and Koho Everything. Each has different cash back earn rates, annual fees, and interest rates for balances.
2. Neo Money card
Neo Money Card
Rewards
- 0.5% Earn a minimum of 0.5% cash back on all purchases.
- 2.25% Collect 2.25% interest on every dollar in your Neo account.
- Welcome Offer None
- Annual Rewards $TBD Learn how we calculate this.
- Annual Fee $0
- Minimum Income Required None
Pros
- Cash back earned is deposited instantly
- 2.25% interest earned on every dollar in your account
- Earn up to 15% cash back at select Neo retail partners
Cons
- Cash back can only be earned at Neo retail partners
- Won’t help you build credit
- Foreign transaction fee of 2.5%
The Neo Money card is a no-fee prepaid credit card that boasts some impressive perks, particularly in the cash back category.
Not only does it give you convenient access to the funds in your savings account; you can also enjoy the benefit of earning cash back at a network of more than 10,000 retail partners while earning 2.25% interest on every dollar in your account.
The Neo Money card guarantees a minimum cash back rate of 0.5% and the best part is that it’s deposited into your account instantly. However, it’s important to note that while the cash back benefits are substantial, obtaining them can be somewhat challenging if you don’t shop frequently at Neo retail partners. As well, not all partners offer high cash back rates.
3. PC Money
PC Money
- Welcome Offer Up to 200,000 points
- Annual Fee $0
- Interest Rates N/A
- Recommended Credit 300-559
- 10 points per $1 spent
- 25 points per at Shoppers Drug Mart
- No account fees
- Free ATM withdrawals
- Overdraft protection
- No min balance required
- Free unlimited transactions
PC Financial is a popular option among Canadians looking to take a frugal and functional approach to money, so it’s no surprise that they offer an attractive prepaid credit card.
PC Money functions as a standard prepaid credit card and comes complete with a basic but functional bank account.
Like other PC Financial products, the PC Money card comes with the opportunity to earn PC Optimum points. There’s also a sign-up offer of 50,000 bonus PC Optimum points. This card comes without a monthly fee, too.
Because the PC Money card can also work like a bank account, you can set up a bill payment schedule with PC Money. It’s not the only card that functions like a bank account, but it’s easily the best no-frills option.
4. Wealthsimple Cash Card
Wealthsimple Cash Card
Rewards
- 1% Earn 1% cash back on every purchase.
- 4% Earn 4% interest on accounts with any balance.
- 4.5% Earn 4.5% interest on accounts with a balance of $100,000 or more.
- 5% Earn 5% interest on accounts with a balance of $500,000 or more.
- Welcome Offer None
- Annual Rewards $240 Learn how we calculate this.
- Annual Fee $0
- Minimum Income Required None
Pros
- High-interest earnings
- No account fees
- Automated investing
- No foreign exchange fees
- Increased CDIC protection of $300,000
Cons
- Won’t help you build credit
- Premium features only available with significant asset holdings
The Wealthsimple Cash Card offers a unique financial opportunity for those who want to actively invest in stocks or cryptocurrencies while enjoying a 1% cash back benefit on their purchases. This prepaid card can also be a valuable tool for individuals seeking to manage their spending more effectively, as it restricts expenditures to the loaded amount. It does not, however, help you build credit.
If you’re new to Wealthsimple, you’re late to the party — but we’re happy to welcome you anyway! Wealthsimple is a Canadian online investment management service that has blossomed in popularity in recent years.
While the app focuses on registered savings accounts and its staple robo-advisor product, it also offers a prepaid Mastercard: the Wealthsimple Cash Card.
With the Wealthsimple cash card, users can make transactions directly from their Wealthsimple Cash account. There are no annual fees and you can earn 1% cash back on all purchases, and up to 4% cash back depending on the value of your deposits each month.
What is a prepaid credit card?
Not quite a debit card and not quite a regular credit card, a prepaid credit card has the same functionality as a regular credit card. The exception is that it draws from a bank of existing funds instead of relying on credit. Think of it like a gift card accepted anywhere that major credit cards are.
One of the biggest advantages of using a prepaid card is that it gives you the ability to make purchases wherever credit cards are accepted without dealing with a credit card’s hassles.
You can generally use a prepaid credit card anywhere you would use a regular credit card, such as making online purchases and renting cars or hotel rooms. However, there may be some cases where a prepaid card is not accepted. It’s always a good idea to check in advance.
A prepaid credit card works by drawing from a card balance that the account holder has pre-loaded. It’s similar to a secured credit card, which functions like a regular credit card without a predetermined balance. This makes prepaid cards an excellent choice for students, anyone who has a limited income, or anyone who is new to money managing and feels intimidated by using a credit card with a high balance.
Do prepaid credit cards help you build credit?
On the whole, no credit bureau receives your prepaid card activity (though there are some exceptions to this). So while prepaid credit cards have their advantages — you don’t need to worry about late payments affecting your credit score — they will generally not help you build up credit history or improve your credit score.
If building or improving your credit is one of your goals, you may want to look into another option, such as an unsecured credit card with a low limit, or a secured credit card, both of which report to the credit bureaus.
Our final thoughts
Whether you’re trying to limit your reliance on traditional credit cards or be more mindful of your spending limits, a prepaid credit card is worth considering. A prepaid card doesn’t cancel out the usefulness of a regular credit card, and vice versa.
Making educated use of both card types is a wonderful way to build a comprehensive budget friendly financial strategy for yourself.
