In this article, I cover some of the best prepaid credit cards in Canada for earning cash back rewards and making payments online and in person.
Prepaid credit cards are an alternative to traditional credit cards without the ridiculous interest fees.
Like 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 budgeting tools and offer rewards.
If you want to curtail impulse spending and minimize your access to easy credit and debt, a prepaid card could be for you.
Best Reloadable Prepaid Credit Card in Canada
The best reloadable prepaid card in Canada is offered by KOHO.
KOHO Mastercard Prepaid Card
KOHO Prepaid Mastercard
Rewards: Earn 1% cash back on groceries and transportation; Up to 5% cashback at select partners; Earn interest on your balance*.
Welcome offer: Get a $20 bonus when you load and make your first purchase (use promo code CASHBACK during sign-up).
Interest rate fee: 0%
Annual fee: $0
KOHO offers a reloadable Mastercard prepaid card you can use to make payments online, in-store, and anywhere that Mastercard is accepted. It is easily the best prepaid card in Canada.
This card also has a smartphone app for budgeting, automating your savings, and making stress-free payments using Apple Pay or Google Pay.
One thing that sets a KOHO prepaid Mastercard apart from other prepaid cards is that you earn cash back on your purchases! Cardholders earn up to 5% cash back on purchases, depending on the retailer.
Here are some of the basic features of KOHO:
- $0 monthly account fee
- Up to 5% cash back at select merchants; 0.25% to 2% cash back on other purchases, depending on subscription tier
- Automatic savings using the roundup feature
- Real-time insight into your spending patterns
- Earn interest on your balance, up to 2%
- Access to KOHO Credit Builder
- Access to a virtual card
When you join KOHO using this exclusive link (referral code CASHBACK), you receive a $20 bonus after making the first purchase with your card.
Power users can benefit from a KOHO Extra Mastercard. It offers additional cash back on some purchases and pays a higher interest rate on your balance.
You also get access to price matching at several stores, access to free financial coaching, and no foreign currency transaction fees.
A KOHO Extra 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 our referral code CASHBACK for an extra $20 bonus when joining
- Best for: Earning cash back
- Learn more: KOHO Mastercard Card Review
Best Prepaid Mastercard 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 make point-of-sale transactions wherever Mastercard is accepted.
The best prepaid Mastercard reloadable card in Canada include KOHO, Neo Money Card, EQ Bank Card, and Wealthsimple Cash Card. We have earlier touched on the KOHO Card.
Neo Money Card
Neo Money card
Rewards: Earn up to 5% cash back at over 10,000 retail partners and a guaranteed minimum of 0.50% (up to $50 monthly); Earn 2.25% interest on your account balance.
Welcome offer: Get a $20 welcome bonus and up to 15% cash back on your first purchases at participating stores.
Interest rate fee: 0%
Annual fee: $0 (no monthly fees)
The Neo MoneyTM card functions like a prepaid card and converts your Neo MoneyTM account (savings account) into a hybrid that you can use to earn cashback on spending and high interest rates on savings.
This Mastercard pays up to 15% cash back on first-time purchases and an average of 5% cashback when you shop at over 10,000 Neo partners. It also offers a 2.25% interest rate on your savings account balance.
To get a free card, open a Neo MoneyTM account here ($5 bonus), fund it using Interac e-Transfer, direct deposit, or by linking another bank account. You can then request a physical card on your dashboard. A virtual card is also provided.
Other features include:
- Free everyday transactions and no monthly fees
- No credit check requirement
Withdraw cash from any ATM worldwide
- Your money is eligible for CDIC deposit insurance (limits apply)
- Reload method: Access to funds in your Neo Money account
- Best for: Earning interest on your savings and cash back on your spending
- Learn more: Neo Money card review.
If you prefer an easy-to-qualify-for credit card that helps build credit, you can also apply for the Neo Credit Card and earn the same cash back rewards on all purchases.
EQ Bank Card
EQ Bank Card
Earn 2.50%* interest on your balance
0.50% cash back on purchases
No monthly account or FX fees
Free ATM withdrawals
Following the KOHO Mastercard and Neo Money Card, another top prepaid Mastercard in Canada is the EQ Bank Card.
Recently launched in 2023, this card offers several benefits and perks, including no monthly or annual fees and:
- Unlimited transactions online and in-store
- 0.50% unlimited cash back on all purchases
- No foreign currency transaction fee – a saving of up to 3%
- Free ATM withdrawals in Canada at any location
- 2.50% interest is earned on your entire balance
- Access to free Interac e-Transfers
To get a free EQ Bank Mastercard, simply open a free EQ Bank Savings Plus Account online, fund it with any amount, and order a card in a few clicks.
There is no minimum balance to maintain your EQ Bank Account, and cash back earned is paid out monthly.
Also, your deposits are protected by the Canada Deposit Insurance Corporation by up to $100,000 per insured category, per depositor.
- Monthly fee: $0
- Reload method: Transfer funds from your savings account
- Best for: Earning cash back and waiving FX fees
- Learn more: EQ Bank Card Review.
Best Prepaid Visa Cards in Canada
While big banks, including CIBC, issue prepaid Visa cards, some of the best offers are from newer financial technology companies.
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
- Promo: Earn 1% cash back on all purchases (load your card to activate)
Regular transaction fees apply if you need to make an ATM withdrawal outside Canada – the first ATM withdrawal is free each month.
Learn more about how this card works in our detailed CIBC AC Conversion Card review.
Other Canadian Prepaid Credit Cards
Wealthsimple Cash Mastercard
This free reloadable Mastercard pays 1% cash back on all purchases. It is available to users of the Wealthsimple Cash App, the free money transfer app that allows you to claim your unique Dollar $ign, like the Cash App in the U.S.
The Wealthsimple Cash Card and the app also offer these benefits:
- Send cash instantly to people on your contact list
- No monthly account fees
- No fees for deposits or withdrawals
- Add the Card to your preferred digital wallet (Apple and Google Pay)
- Easily request money from friends or split a bill with them
- Monthly fee: $0
- Reload methods: Direct bank transfer
- Best for: Cash back rewards
- Learn more: Wealthsimple Cash review
STACK Prepaid Mastercard
The Stack prepaid Mastercard is a prepaid Mastercard with features including:
- A $7.99 monthly fee applies if you don’t spend at least $350 each month
- No foreign currency conversion fees (spending limits apply)
- Bill payments
- Cash back 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: $7.99
- Reload method: Interac e-Transfer, Visa Debit, Direct payroll deposit, Canada Post
- Best for: Waiving FX fees
- Learn more: STACK prepaid Mastercard review
BMO Prepaid 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 Fee||Vanilla 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|
Vanilla prepaid cards cannot be used for recurring billing or cash withdrawal 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
American Express Prepaid Cards
American Express also had prepaid cards you can purchase in Canada. They are available in $25, $50, $100, $200, $500, and $1,000 denominations.
Amex Prepaid Cards have no monthly fees and can be used wherever Amex credit cards are accepted.
After purchasing the card online, it is mailed via Canada Post and may take up to 1 week before delivery.
Other reloadable 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. Learn more.
Vanilla Prepaid Mastercard: This is offered alongside Vanilla Mastercard prepaid cards. It is offered in various denominations, including $25, $75, $150, and $250, and charges activation fees. Learn more.
The CIBC Smart Prepaid Visa Card was discontinued end of January 2023.
Savvy New Canadians ranks the best prepaid credit cards based on the rewards they offer, ease of application, lack of annual fees, welcome bonuses, top features, and other perks. We carefully evaluate each prepaid card and place more weight on the value of the long-term rewards it offers. Visit the card issuer’s website using the links to confirm each product’s terms and conditions before applying.
Compare the Best Prepaid Credit Cards in Canada 2023
Below is a summary of the best prepaid credit cards.
|Card||KOHO Prepaid Mastercard||EQ Bank Card||Neo Money Card||CIBC AC Conversion Card||Wealthsimple Cash Card|
|Best for||Cash back; overall best prepaid card||Cash back, ATM withdrawals, and no FX fees||Cash back and earning high interest rates||Holding multiple currencies||Cash back rewards|
|Annual fee||$0 for regular KOHO; $84 for KOHO||$0||$0||$0||$0|
|FX Fee||1.5% for regular KOHO; 0% for KOHO premium||0%||N/A||Regular fees apply||$0 (Mastercard fees apply)|
|Perks||Up to 5% cash back on purchases; free budgeting app; free e-Transfers, earn up to 2% interest||0.50% cash back on purchases||Extra cash back on first purchases; earn 2.25% interest on balance||Earn 1% cash back on all purchases, load up to 10 currencies||Earn 1% cash back on purchases|
|Issuer||People’s Trust||Equitable Bank||Equitable Bank||CIBC||People’s Trust|
|Reload options||Interac e-Transfers, direct deposit, online bill payment, Canada Post||Electronic transfer from your savings||Interac e-Transfer, Direct deposit, electronic funds transfer||Online banking||Direct bank transfer|
|Load Limits||$20,000 maximum card balance, $3000 daily max transaction limit; $30,000 monthly transaction limit||$10,000 maximum card balance; $5,000 daily transaction limit||n/a; maximum balance for Neo Money account is $200,000||$20,000 maximum card balance; $2,999.99 maximum purchases per day; $2,999.99 maximum load amount||$3,000 maximum spending limit per transaction; $5,000 maximum spending limit per day|
|Available in Quebec||Yes||No||No||Yes||Yes|
|Security||Mastercard Zero Liability; CDIC coverage via People’s Trust||Mastercard Zero Liability; CDIC coverage via Equitable Bank||Mastercard Zero Liability protection, CDIC coverage via Concentra Bank||Visa Zero Liability||Visa Zero Liability, CDIC coverage via People’s Trust|
|Promotion||$20 cash bonus when you use our referral code CASHBACK and fund your card within 30 days||None; perks come standard||$5 sign-up bonus when you open a Neo Money account||Earn 1% cash back on purchases after loading your card||n/a|
|Apply||Apply now||Apply now||Apply now||–||–|
Summary of the Best Prepaid Cards of 2023
- Best prepaid card for cash back rewards (and best overall): KOHO Prepaid Mastercard
- Best prepaid card for specific retailers (Neo partners): Neo Money card
- Best prepaid Mastercard for no FX fees, ATM use and savings: EQ Bank Card
- Best prepaid card for multiple currencies: CIBC AC Conversion Visa Prepaid
- Best prepaid card for P2P money transfer: Wealthsimple Cash Card
- Best prepaid card for offsetting carbon footprint: Mogo Platinum Visa prepaid
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. Technically, it is not a credit card but is often referred to as such.
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 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 matter when you apply for a prepaid card. So, whether you have poor or great credit, you can easily qualify.
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 Wealthsimple Cash Card 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 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 cannot 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 cannot qualify for a regular credit card, you cannot use a prepaid card to build your credit score.
If this is the case, you should look at these secured credit cards.
Limited or no Rewards: Most prepaid credit cards do not offer loyalty rewards or cash back. This means you aren’t getting anything back for every dollar spent. The KOHO Prepaid Mastercard, EQ Bank Card, and Neo Money Card 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 need to visit Canada Post or a retail store to load funds on your card. Look out for those that accept direct deposit, Interac e-Transfer, or Bill payment through your bank’s online banking portal.
How Do Prepaid Credit Cards Work?
Prepaid cards all work slightly differently, but the basic principle is the same. With these cards, you deposit funds into your account, and you can then spend those funds wherever your card is accepted.
As such, you are spending your own money, like with a debit card, rather than borrowing money like a traditional credit card. Depending on the card, you may earn points or cash back for your purchases.
Some cards come preloaded with funds to spend, but most are reloadable.
Gift cards or store prepaid cards may be closed-loop cards. With these, you can only use the card at selected merchants or retail networks.
On the other hand, open-loop prepaid cards can be used anywhere as long as your card network is accepted.
Most allow you to reload funds when needed, but load options differ. For example, most allow you to load using a bank transfer, but you may be able to load in person at a retailer or via a credit card.
You may even be able to set up a direct deposit, so you can get your pay cheque sent straight to your prepaid card.
Many prepaid cards come with apps and bank accounts. Fintech companies usually provide these apps with additional features like spending insights.
They may have additional tools to boost your credit score for a monthly fee or round-up features, where your purchases are rounded up to the dollar, and the extra money is automatically saved.
Depending on the card, you may be able to save on foreign transaction fees, but these often come at a cost, and a monthly subscription may be required.
Types of Prepaid Cards in Canada
There are several types of prepaid cards available in Canada. Here we take a look at the main ones.
Prepaid Visa Cards
Prepaid Visa cards are prepaid cards that work on the Visa network. They can be used anywhere Visa is accepted, and banks, stores and fintech companies issue them.
Prepaid Mastercards are the same as Visa cards but can only be used where Mastercard is accepted. Some major stores like Costco only accept Mastercard.
Prepaid American Express Cards
These cards work the same way as Visa and Mastercard prepaid cards, but they can only be used where American Express cards are accepted.
Prepaid Rewards Cards
Many prepaid cards come with the option to earn rewards, including reward points and cash back.
Prepaid Travel Cards
These are reloadable cards that usually come with the option to hold several currencies, so you can use them to make purchases more easily when you travel.
Prepaid Gift Cards
Specific merchants or retail networks provide these cards. They may or may not be reloadable.
Alternatives to Prepaid Cards in Canada
There are several alternatives to prepaid cards in Canada that you may want to consider using.
A debit card is the closest alternative to a prepaid card. With this, you are spending your own money rather than borrowing it.
However, the money comes straight out of your bank account, so you don’t need to load your card with money. In addition, these may or may not come with the option to earn rewards and cash back.
Secured Credit Cards
A secured credit card is a card where you deposit your money as a security deposit. For example, you deposit $500 and can then spend up to that limit. You are restricted to borrowing up to the amount of your deposit.
The difference is that you are not spending your own money. You are borrowing money just like a normal credit card and must make regular monthly payments. Secured credit cards are a good option to rebuild your credit score.
Unsecured Credit Cards
These are standard credit cards where you do not need to make a security deposit. With these, you borrow the money and pay it back at the end of the month. You pay interest on your balance if you don’t pay it back after the grace period.
Unsecured cards are a good option if you have a good credit score. They may have better rewards and premium perks than prepaid cards, but this depends on the card.
Prepaid Card vs Secured Credit Card
A secured credit card is similar to a prepaid card; however, you can use it to improve your credit score.
You must 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.
Three of the best secured credit card options in Canada is the Neo Secured Credit Card. Other are Plastk Secured Visa Credit Card and Home Trust Secured No-Fee Visa.
Neo Secured Mastercard
The Neo Secured Mastercard is the best secured credit card in Canada. It has no annual fees and offers:
- $25 welcome bonus
- Up to 5% cash back at 10,000+ partner stores
- Minimum 0.50% cash back on all purchases (up to $50 cash back monthly)
- Guaranteed approval
- 15% welcome cash back at several stores
- $50 minimum security deposit
- Your credit limit is equal to the security funds you provide
- 19.99%-26.99% purchase interest rate
Learn more in this Neo Secured Mastercard 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.
Related: Secured vs Prepaid Credit Cards.
Where to Buy Prepaid Cards
You can buy prepaid cards from various places. Here are the most common places to buy them:
Websites and Apps
You can often order a prepaid card online via the card issuer’s website. For example, fintech companies usually operate entirely online, and you apply via the website, and they deliver the card upon approval.
However, you may have to download the mobile app and apply via this instead of the website.
If a bank or store offers prepaid cards, you may also be able to apply for these online. The card may or may not be free, but you might have to preload it. For example, if it is a gift card, you will normally need to buy it and pay the amount preloaded onto it.
If a store offers a prepaid card, you may be able to apply for it online. For example, you could buy a prepaid gift card or apply for a free prepaid store card. You may or may not have to go through an application process.
Credit enquiries are not normally made because you are not applying for a credit card.
Where banks issue prepaid cards, you may be able to apply at the bank branch in person. For prepaid card issuers like KOHO, you can order a card online.
Should You Get a Prepaid Card?
Getting a prepaid card can be a good option if you cannot get a credit card because of your credit score or because you don’t have a long credit history.
You may also want a prepaid card if you:
- Want to keep track of exactly how much you are spending.
- Want to earn reward points or cash back that your debit card does not provide.
- Don’t have a bank account, but you still want to enjoy the convenience of making purchases with a card.
- Want to provide someone with a gift.