The KOHO Essential Mastercard is one of the best prepaid cards in Canada.
Unlike traditional prepaid credit cards, the KOHO Essential Mastercard offers cash back rewards on your purchases and can be used to build your credit history.
Read on to see how it works and comparisons with the premium KOHO Extra Mastercard.
KOHO Essential Mastercard Overview
KOHO Essential Prepaid Mastercard
$20 sign-up bonus after first purchase (use CASHBACK bonus code)
Earn up to 5% cash back on purchases
Earn 5% interest on your balance
$0* monthly fee (waived when you meet requirement)
KOHO Essential Mastercard Benefits
The KOHO Essential Card can easily replace your debit card if you want to earn cash back on all purchases.
Since it is a prepaid card, you will need to load it with funds from a chequing or savings account at another financial institution. And you can set it up to receive your paycheque and earn on every dollar.
The main benefits of this KOHO Prepaid Mastercard include the following:
Earn Cashback
The KOHO Essential Mastercard pays 1% cash back on groceries, restaurants, gas and transportation purchases.
At participating retailers, cardholders earn higher cashback rates of up to 5%. Cashback partners offering rewards as of this writing included Chefs Plate, Indigo, Pizza Pizza, Baskin Robbins, Contiki, Frank and Oak, and Open Farm.
Earn Interest
You earn high savings interest rates on your card balance. So, the funds sitting on your card continue working for you.
This perk is not a regular feature of prepaid or debit cards. Other prepaid cards offering interest on your balance are the EQ Bank Card and Neo Money Card.
Credit Building
This optional add-on helps users build their credit scores.
When you subscribe to KOHO Credit Building for $10 monthly, your subscription payment is reported to a credit bureau. Timely payments improve your score over time.
Lower FX Fees
Standard credit cards charge a 2.5% to 3% foreign currency conversion fee when you make payments abroad. The KOHO Essential Mastercard charges a lower 1.50% rate, a saving of up to 1.50% each time you complete a foreign currency transaction.
Budgeting Features
You can use the KOHO app for insights into your spending. It also allows you to set automated savings goals using the RoundUps tool.
Other Perks
This card offers guaranteed approval, and you can qualify for it with any credit score (no credit check). Because it is not a credit card, you won’t be paying interest fees, as you are spending cash.
Funds in your KOHO account are held at a Canadian bank, where they enjoy deposit insurance provided by the Canadian Deposit Insurance Corporation (CDIC).
Downsides of the KOHO Essential Mastercard
The KOHO Essential Mastercard has a $4 monthly fee and will cost you $48 annually. Note that this fee is waived if you set up a recurring deposit, such as your payroll.
If you use this card only for cashback rewards, a no-fee credit card or Neo Money may offer higher rewards in some categories. You can also opt for the EQ Bank Card.
Secondly, it does not include insurance coverage for purchases, which is standard with most credit cards.
Lastly, credit building is not a free feature.
How To Apply For The KOHO Essential Mastercard
To apply for the KOHO Essential Prepaid Mastercard, you must be a resident of Canada and at least 18 years old (age of the majority).
Complete the online application, and your new physical card will be sent by mail within days. You will also receive a virtual KOHO card for easy online payments.
KOHO vs Neo Financial Prepaid Cards
The Neo Money card offers an average of 5% cash back on purchases at over 12,000 locations in Canada. It is one of the best prepaid cards in Canada.
Neo Money card
Rewards: Earn up to 3% cash back at Neo partners.
Welcome offer: n/a
Interest rate fee: 0%
Annual fee: $0 (no monthly fees)
KOHO Essential vs KOHO Premium Prepaid Cards
| Prepaid Cards | KOHO Essential Mastercard | KOHO Premium Mastercard |
| Monthly fee | $0* | $9 |
| Cashback rewards | 1% on groceries, restaurants, gas, and other transportation expenses | 1.5% on groceries, gas, transit, and restaurants; 0.50% elsewhere |
| Credit building fee | $10/month | $7/month |
| Savings interest | 5% | 5% |
| Physical and virtual cards | Yes | Yes |
| FX Fee | 1.50% | 0% |
KOHO Essential Mastercard Review FAQs
Yes, you earn cashback at Costco and Walmart when paying with the KOHO Prepaid Mastercard.
No, the KOHO Essential Mastercard is not a credit card. However, you can use it to build your credit score if you subscribe to the credit-building tool.
