Best Prepaid Credit Cards in Canada

Photo of author

by Enoch Omololu

Published on

Advertiser Disclosure

Prepaid credit cards are an alternative to traditional credit cards, without the ridiculous interest fees.

Similar to your bank’s debit card, the best reloadable prepaid cards can be used to access cash at an ATM, pay bills, make online purchases, and send money to friends and family.

Even better, some prepaid credit cards have apps that work as a budgeting tool and they offer rewards. If you are looking to curtail impulse spending and minimize your access to easy credit and debt, a prepaid card could be for you.

Below are some of the best prepaid credit cards in Canada, as well as secured credit card alternatives.

What is a Prepaid Credit Card?

A prepaid credit card is similar to a gift card that has been preloaded with money and you can use it to make payments like you would with a credit card.

Prepaid credit cards are issued by banks, retailers, and other financial institutions using the Visa, Mastercard, or American Express payment networks.

After obtaining your card, you will need to transfer money to it. You can load the card using Interac e-Transfer, payroll, direct deposit, or via bill payment through your online banking.

Even if you do not have a bank account, you may be able to load money onto the card by visiting a designated location e.g. Canada Post.

A prepaid card only gives you access to the money you have loaded. When you make a payment, it is deducted from your balance until you have nothing left. Unlike regular credit cards, prepaid cards do not give you a line of credit to draw on.

This is why they are often also referred to as prepaid debit cards.

Your credit rating does not really matter when you apply for a prepaid card. So, whether you have poor or great credit, you can easily qualify.

Compare the Best Prepaid Credit Cards in Canada

CardKOHO Prepaid VisaSTACK Prepaid MastercardMOGO Prepaid Visa
Best forCash back; overall best prepaid cardTravelOffsetting carbon footprint
Annual fee$0 for regular KOHO; $84 for KOHO$0$0; ATM withdrawal fees
FX Fee1.5% for regular KOHO; 0% for KOHO premium0% (FX fees are waived)2.5%
Perks0.5-2% cash back on purchases; free budgeting app; Multiple in-app offers; free e-Transfers; early access to paychequeNo ATM fees by STACK, free replacement cards; free budgeting app; in-app cash back offers2% Bitcoin cash back, Mogo offsets 1 pound of carbon for every dollar spent, access to free credit scores and identity fraud protection
IssuerPeople’s TrustPeople’s TrustPeople’s Trust
Reload optionsInterac e-Transfers, direct deposit, online bill payment, Canada PostInterac e-Transfer, Direct deposit, Canada Post, online bill paymentInterac e-Transfer
Load Limits$20,000 maximum card balance, $3000 daily max transaction limit; $30,000 monthly  transaction limit$20,000 maximum card balance; $2,500 max per purchase; $5,000 maximum per day$10,000 maximum card balance, $3,000 maximum per purchase; $5,000 maximum purchases in 24-hr period
Available in QuebecYesYesNo
SecurityVisa Zero Liability; CDIC coverage via People’s TrustMastercard Zero Liability protection, CDIC coverage via People’s TrustVisa Zero Liability
Promotion$20 cash bonus when you use your card within 30 days$5 sign-up bonus after you activate your cardN/A
ApplyApply nowApply nowApply now

Prepaid Visa Cards in Canada

While there are a number of prepaid Visa cards issued by big banks including CIBC and Scotiabank, the best offers are from newer financial technology company’s i.e.

  • KOHO, and
  • MOGO

KOHO Prepaid Visa Card

KOHO offers a reloadable Visa card you can use to make payments online, in-store, and anywhere that Visa is accepted.

This card also has a smartphone app you can use for budgeting, automating your savings, and making stress-free payments using Apple Pay or Google Pay. 

One thing that sets a KOHO prepaid Visa apart from other prepaid cards is that you earn cash back on all purchases! Cardholders earn between 0.50% and 2.00% cash back on purchases depending on their account type.

Here are some of the basic features of KOHO:

  • $0 monthly account fee
  • 0.50% cash back on purchases
  • Automatic savings using the roundup feature
  • Real-time insight into your spending patterns
  • Access to KOHO Credit Builder
  • Access to KOHO Early Payroll (get $100 from your paycheque 3 days early)

When you join KOHO using this exclusive link, you receive a $20 bonus after making the first purchase with your card.

Power-users can benefit from a KOHO Premium Visa card. It offers an additional 1.5% on specific categories of spending for a total of 2% cash back.

You also get access to price matching at several stores, access to free financial coaching, and no foreign currency transaction fees.

A KOHO Premium Account has a $9 monthly or $84 annual fee.

  • Monthly fee: $0 or $9 for KOHO Premium
  • Reload Methods: Interac e-Transfer, direct deposit, online bill payment, Canada Post cash load
  • Promo: Use CASHBACK for an extra $20 bonus (code applies automatically)
  • Best for: Earning cash back
  • Learn more: KOHO Visa Card Review
Apply for a KOHO Prepaid Visa

Mogo Prepaid Visa Card

The Mogo Visa Platinum prepaid card is free (no monthly fee) and can be used to make purchases online and through POS.

It is paired up with a versatile app that provides insights into how your money is being spent.

The app also provides these benefits:

  • Automatic savings using auto-transfers. For example, you can choose to save $50 every week
  • Set spending goals and find ways to cut your expenses
  • Easy payments using Apple Pay, Google Pay, and Samsung Pay
  • Easily freeze your card via the app if you lose it

Purchases made with your card earn a 2% bitcoin cash back and Mogo also offsets part of your carbon footprint with each purchase.

To get the Mogo Visa Platinum prepaid card, you need to first become a member. Mogo membership is free and you can sign up here.

Perks of membership include access to free Equifax credit scores every month and Identity Fraud Protection.

  • Monthly fee: $0
  • Reload methods: Direct bank transfer, Interac e-Transfer, Canada Post
  • Best for: Free credit scores
  • Learn more: Mogo review
Get a MogoCard

CIBC AC Conversion Visa Prepaid Card

This card is unique in that it can hold more than one currency at a time, saving you the hassle of currency exchanges when you are travelling abroad.

The CIBC AC Conversion prepaid card can take up to 10 currencies including USD, EUR, GBP, JPY, and more. After locking in an exchange rate, you can simply make payments in the currency of your choice. You don’t need to be a CIBC-customer to apply and the bank does not run a credit check.

  • Monthly fee: $0
  • Reload method: Online banking
  • Best for: Holding multiple currencies

Regular transaction fees apply if you need to make an ATM withdrawal outside Canada – the first ATM withdrawal is free each month.

CIBC Smart Prepaid Visa Card

This prepaid Visa card can easily be purchased through online or mobile banking, or at a CIBC Banking Centre.

The CIBC Smart Prepaid Card is acceptable wherever Visa is accepted and you can load the card using funds from your CIBC chequing, line of credit, or saving account.

This prepaid card is free to order; however, customizing it to show your information comes at a cost of $5.95. Replacement cards also cost $14.95 each.

A standard 2.5% fee applies to foreign currency conversions.

Other reloadable Visa prepaid cards include:

Canada Post Prepaid Reloadable Visa Card: (costs $15 to purchase; $3 monthly service fee). It offers purchase protection and extended warranty insurance.

Scotiabank Prepaid Reloadable Visa Card: ($10 purchase fee; $10 annual fee). It offers 1 SCENE point for every $15 you spend using your prepaid card.

Prepaid Mastercards in Canada

A prepaid Mastercard works in a very similar way to your Mastercard credit card. You can use it to pay for online shopping, make bill payments, and point of sale transactions wherever Mastercard is accepted.

The best prepaid Mastercard reloadable card in Canada is the Stack Mastercard.

STACK Prepaid Mastercard

The Stack prepaid Mastercard is not your regular prepaid credit card. This card ups the ante with multiple perks that rival some travel credit cards.

Its features include:

  • $0 features account fee
  • No foreign currency conversion fees (savings of 2.5%)
  • Bill payments
  • Free ATM withdrawals (STACK does not charge a fee)
  • Cashable offers at participating retailers
  • Free STACK-to-STACK money transfers

You get a user-friendly mobile app that tracks your spending. It also helps you save on autopilot by rounding up your purchases to the nearest $1, $2, $5, or $10 and adding it to your savings.

  • Monthly fee: $0
  • Reload method: Interac e-Transfer, Visa Debit, Direct payroll deposit, Canada Post
  • Promo: Sign up here for a $5 cash bonus (smartphone link)
  • Best for: Waiving FX fees
  • Learn more: STACK prepaid Mastercard review
Sign up for STACK

BMO Prepaid Travel Mastercard

The BMO Prepaid Mastercard is a secured credit card with a $6.95 annual fee. You can load the card with funds starting at $100 up to a maximum of $10,000.

To load your BMO prepaid Mastercard, transfer money from your BMO chequing or savings account. Non-BMO customers can load the card by adding it as a bill payment to their online banking.

Note that using your card for cash-like transactions incurs a $5 fee. Also, the standard 2.5% fee applies to foreign currency conversion.

Here is a list of the best BMO credit cards.

Vanilla Prepaid Mastercard

The Vanilla Prepaid Mastercard and its Visa alternative can be used to pay for purchases at millions of locations worldwide. These prepaid cards make the perfect gift for birthdays, graduations, and more.

The Vanilla Prepaid Mastercard and Vanilla Prepaid Visa are available in various denominations, and an activation fee is also required as follows:

Vanilla Prepaid Mastercard (denomination)Activation FeeVanilla Prepaid Visa (denomination)Activation Fee
$25 card$3.95$25 card$4.95
$60 (3 x $20)$8.95$75 card$5.50
$50 card$4.95$150 card$6.50
$100 card$5.95$250 card$7.50
$200 card$6.95  

Vanilla prepaid cards cannot be used for recurring billing or to withdraw cash at ATMs. When you make payments in foreign currencies, a 2.5% fee applies.

You can easily purchase a Vanilla prepaid card at Walmart, Petro-Canada, Giant Tiger, London Drugs, or Best Buy.

Related: KOHO vs STACK vs MOGO

The Best Prepaid Cards of 2021 – Summary

Benefits of a Prepaid Credit Card

The main advantages of prepaid cards relate to convenience and better money management.

Budgeting: Prepaid cards like KOHO and STACK work hand-in-hand with a phone app you can use to manage your spending, automate savings, and track your purchases. If you struggle with staying within your budget, a prepaid card can help since you can’t spend more money than you have loaded.

Convenience: If you don’t have a debit card, a prepaid card can be used to pay for purchases at millions of locations worldwide. It is safer than carrying cash.

Credit Rating: You don’t need a good credit score to apply for a prepaid card. You can get one even if you have a bad credit score and are unable to qualify for a regular credit card.

Fees and Interest: Since you can’t spend more than what you have, prepaid credit cards do not charge interest on your balance. You also won’t be paying a hefty annual fee. Note that you may incur ATM withdrawal and foreign currency fees when applicable.

Security: A prepaid Visa card may offer protection for unauthorized purchases via Visa’s Zero Liability policy. The same goes for a prepaid Mastercard via Mastercard’s Zero Labiality coverage.

Disadvantages of a Prepaid Credit Card

Even though the prepaid cards on this list replicate many of the features you would find in a credit card, they are not “credit” cards,

Credit Score: A prepaid card does not affect your credit card. If you are unable to qualify for a regular credit card, you cannot use a prepaid card to build your credit score.

If this is the case, you should take a look at these secured credit cards.

Limited or no Rewards: Most prepaid credit cards do not offer loyalty rewards or cash back. What this means is you aren’t getting anything back for every dollar spent. The KOHO Prepaid Visa, STACK Mastercard, and MogoCard excel in this regard.

Transaction Limitations You may have to pay a fee to withdraw cash from an ATM or the card may not even offer that functionality (e.g. Vanilla Prepaid Cards). They also do not offer recurring bill payments.

Acceptability: Some vendors do not accept prepaid cards.

Funding Your Card: Some prepaid cards are just a hassle to load. You may have to visit Canada Post or attend a retail store to load funds on your card. Look out for those ones that accept direct deposit, Interac e-Transfer, or Bill payment through your bank’s online banking portal.

What About Secured Credit Cards?

A secured credit card is similar to a prepaid card, however, you can use it to improve your credit score.

You are required to put down a security deposit as part of the application process for a secured credit card. Your security deposit is returned to you when you close your account or your credit improves and you qualify for a secured credit card.

Two of the best secured credit card options in Canada are the:

  • Home Trust Secured No-Fee Visa
  • Plastk Secured Visa Credit Card

Home Trust Secured No–Fee Visa

This secured credit card has no annual fee and you determine your credit limit based on your security deposit.

Some of its main features include:

  • $19.99% interest rate on purchases
  • $500 – $10,000 security deposit (credit limit)
  • $0 annual card fee
  • Free purchase protection insurance

Learn more about the card in this Home Trust Secured No-Fee Visa review.

Plastk Secured Visa Credit Card

This secured card offers a lower purchase interest rate and bonus rewards, however, you pay a $48 annual fee plus a $6 monthly maintenance fee.

Its key features include:

  • $17.99% interest rate on purchases
  • $300 to $10,000 security deposit (credit limit)
  • 0% APR for 3 months
  • 25 days interest free grace period on purchases and 3 days grace period on cash advances
  • Free monthly credit score
  • 5,000 bonus points ($20 value)

Get more details in this Plastk Secured Credit Card review.

Secured credit card issues report your payments to the credit bureau. If you stay on top of your payments, you can use these cards to improve your credit rating.

Best Credit Offers this month

One of the best no-fee credit cards in Canada.

Get 2% unlimited cash back on up to 3 purchase categories.

Get 0.5% unlimited cash back on all other purchases.

Get 15% bonus cash back in first 2 months ($150 value).

1.95% balance transfer offer for 6 months.

Free prepaid reloadable Visa card.

Access to a portion of your paycheque 3 days early.

Free budgeting app with automatic savings features.

Credit building available with a subscription.

1.20% savings interest on every dollar balance.*

Get the best rates from multiple lenders.

Borrow up to $50,000 regardless of your credit score.

Pre-approvals available in as fast as 5 minutes.

Low interest rates starting at 9.9% (or 1.90% for auto loans).

Retirement 101 eBook - 3D

Author

Photo of author
Enoch Omololu

Enoch Omololu is a personal finance expert and a veterinarian. He has a master’s degree in Finance and Investment Management from the University of Aberdeen Business School (Scotland) and has completed several courses and certificates in finance, including the Canadian Securities Course. He also has an MSc. in Agricultural Economics from the University of Manitoba and a Doctor of Veterinary Medicine degree from the University of Ibadan. Enoch has a passion for helping others win with their personal finances and has been writing about money matters for over a decade. His writing has been featured or quoted in The Globe and Mail, Winnipeg Free Press, Wealthsimple, Financial Post, Toronto Star, Credit Canada, MSN Money, National Post, CIBC, and many other personal finance publications.

His top investment tools include Wealthsimple and Questrade. He earns cash back on purchases using KOHO, monitors his credit score for free using Borrowell, and earns interest on savings through EQ Bank.

Leave a comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.

3 Shares
Share
Pin
Tweet
WhatsApp
Reddit