If you don’t have strong credit needed to get approved for a traditional credit card, consider a prepaid card while you work on improving your credit score. The best prepaid credit card in Canada will offer similar flexibility as traditional credit cards, without the strict eligibility requirements. Prepaid cards can be used to shop online, book hotels, and even buy plane tickets.
In this article, we’ll look at some of the best prepaid credit cards available to Canadians to make your choice a little easier.
Key Points
- A prepaid credit card is a type of card that you load with your own money, allowing you to spend only what you’ve deposited without borrowing against credit.
- Prepaid cards are great for those with bad credit who can’t get approved for a traditional credit card but still want flexible spending perks.
- These cards are also great for controlling spending and avoiding debt by letting you use only the money you’ve loaded.
- Some of the best prepaid credit cards in Canada include the Neo Money™ card, KOHO Prepaid Mastercard, and the Wealthsimple Cash card.
The Best Prepaid Credit Card In Canada
| Monthly Fees | ||
| Neo Money™ card | $0 | Learn More |
| KOHO Prepaid Mastercard | Koho Essential: $4 or $0* (*conditions apply) | Learn More |
| Canada Post Prepaid Reloadable Visa® card | $3 (+$10 one-time purchase fee) | Learn More |
| Wealthsimple Cash | $0 | Learn More |
| EQ Bank Card | $0 | Learn More |
Neo Money™ Card
If you’re looking for a prepaid card but don’t like the idea of having to remember to load funds onto it, check out the Neo Money™ card. With this card, you don’t have to reload it because it’s connected to your everyday account. As long as your everyday account has money in it, your Money Card is automatically loaded.
The Neo Money™ card is a feature of the Neo Everyday account, which is a hybrid of a spending and savings account. When you open an account, you’ll get free access to the Neo Money™ card. This card offers high cashback on spending and high interest on your account balance
Already have a Neo Everyday account? You can get a Neo Money™ card by logging into your account and selecting “card” from the main menu.
Neo Money™ Card Features
Card Fees: No monthly or annual fee and free everyday transactions.
Rewards Rate:
- Up to 3% cashback on gas and grocery
- Up to 1% everywhere else¹ (keep a high balance in your Everyday account and earn more cashback).
Minimum Balance: $0
Extra Perks:
- Earn Interest: Earn interest on every dollar in your Neo Everyday account.
- ATM: Withdraw cash from any ATM worldwide
- No Minimum Balance: There are no minimum balances, meaning you can enjoy your account for free, without having to worry about how much money is in your account.
KOHO Prepaid Mastercard
When you open a spend and save Koho account, it comes with a prepaid Mastercard. Like Neo, the prepaid card is connected to your Koho account, meaning you don’t have to load your card with funds. So long as there’s money in your Koho account, you can use your KOHO Prepaid Mastercard to make purchases online or in store. You can load your funds onto your account via a direct paycheque deposit or through an Interac e-transfer, then start spending.
Moreover, you’ll earn cash back rewards on specific categories and extra cash back when you shop with KOHO partners.
Use code LOANSCANADA when you sign up for a KOHO account and get $40 FREE when you add funds to your account.
KOHO Prepaid Mastercard Features: Essential Account
Card fees: No fees if you set up a direct deposit or contribute $1,000 per month ($4/month otherwise)
Rewards Rate
- 1% cash back on groceries, transportation (gas, parking, rideshare apps, etc.), and eating and drinking
- Extra cash back with select merchants
Minimum Balance: $0
Extra Perks
- Earn Interest: Earn 2.5% savings interest on the entire balance in your KOHO account
- Free Transactions: Get free e-transfers and no NSF fees.
- Free Credit Score: Get your credit score for free in-app.
- Credit Building: As a Koho account holder, you’re eligible to enroll in Koho’s credit-building program for a fee.
- Upgrade Koho Plan: You can upgrade your Koho account to Koho Extra or the Koho Everything plan for higher cash back, and extra perks like no foreign transaction fees and a discount on their credit building program.
Canada Post Prepaid Reloadable Visa® Card
The Canada Post Prepaid Visa card allows consumers to take their money with them without having to carry cash. The card can be preloaded with funds and then spent wherever Visa is accepted. It can be used to make purchases both in-person and online, but doesn’t come with the typical sky-high fees of your average credit card.
Funds can be loaded onto the Canada Post Prepaid Visa card online or at any Canada Post location.
Canada Post Prepaid Reloadable Visa® Card Features
Card Fees: There is a purchase fee of $10 and a monthly fee of $3. You’ll also be charged a $3 loading fee and a $2 fee for ATM withdrawals.
Rewards Rate: N/A
Minimum Balance: While there is no minimum balance requirement, there is a minimum load amount of $25.
Extra Perks
- No Credit Checks: You can get this card with good or bad credit, as there are no credit checks required.
- No Bank Account: While having a bank account is often a requirement when getting a prepaid card, it’s not required for this card.
- International: You can use this card anywhere in the world, so long as they accept Visa. Do note, there’s a 2.5% foreign transaction fee.
- Visa Zero Liability Policy: With this, you’ll be protected from any unauthorized purchases.
- Mobile App: Manage your card via the Canada Post Prepaid Card app.
Wealthsimple Cash Prepaid Mastercard
Wealthsimple Cash is an everyday spending account which you can manage using the Wealthsimple app. It comes with a prepaid Mastercard that you can use to make purchases online or in-store. You can also use the card to pay bills like your hydro bill or credit card bill.
You can open a Cash account by downloading the Wealthsimple app and creating an account. You’ll need to be a resident of Canada and be at least the age of majority in your province of residence. A valid phone number is also required to open the account.
Wealthsimple Cash Prepaid Mastercard Features
Card Fees: $0
Rewards Rate: Earn 1% back in cash, stock, or crypto on your spendings.
Minimum Balance: $0
Extra Perks
- Earn Interest: Earn up to 2.75% interest on your chequing account deposits.
- Free Transactions: There are no foreign transaction fees and no ATM fees when using your card in Canada.
- Make Purchases Abroad: Use your card wherever Mastercard is accepted.
- Free Cheque Book: Get a free cheque book when you set up direct deposit into your Wealthsimple Cash chequing account.
- Wealthsimple App: Track your earned cash back on the Wealthsimple app.
- Virtual Card + Physical Card: The Wealthsimple Cash Prepaid Mastercard comes with both a virtual card and a physical card, giving you flexibility and convenience.
EQ Bank Card
The EQ Bank Card is a prepaid Mastercard that allows users to earn 0.5% cash back on all purchases and 2.5% interest on account balances. It charges no monthly fees or foreign transaction fees and reimburses ATM fees within Canada, making it suitable for travellers. You can use it anywhere Mastercard is accepted, both online and in-store.
Like the Neo Money Card and KOHO Prepaid Mastercard, the EQ Bank card requires that you open an EQ personal bank account, which is connected to the bank card and serves as the funding source for the card.
This card is a smart choice for budget-conscious consumers looking to earn rewards without the need to qualify for a traditional credit card.
EQ Bank Card Features
Card Fees: $0
Rewards Rate: Earn 0.5% cash back on every purchase
Minimum Balance: $50
Extra Perks
- Earn Interest: Earn interest on your card balance, which is currently 1.25% (base rate).
- Free ATM Withdrawals: Enjoy free domestic bank machine withdrawals.
- No Foreign Transaction Fees: Save on foreign transaction fees when using your card abroad.
- Mobile Wallet: EQ Bank Card is compatible with major mobile wallets, allowing you to make contactless payments using your mobile device.
Other Honourable Mentions
Other prepaid cards are worth a look in addition to the above-mentioned cards, including the following:
The Perfect Gift
The Perfect Gift Visa is a non-reloadable prepaid card that can be used anywhere Visa is accepted, both in-store and online. It comes in denominations from $25 to $500 and offers up to 5% cash back at partner merchants, including Loblaws, Canadian Tire, and Shoppers Drug Mart.
Vanilla Prepaid Card
The Vanilla Prepaid Card is a non-reloadable Visa or Mastercard gift card, available in denominations from $20 to $500. You can activate the card at checkout and use it for secure purchases without having to connect your bank or credit account. A one-time activation fee of $3.95 to $7.95 applies, and foreign transactions incur a 2.5% fee.
Looking for the best credit card options?
How Do Prepaid Credit Cards Work?
As mentioned, prepaid credit cards can be used similar to how regular credit cards are used. Not only can you use your card to make in-store purchases, but you can also make purchases online or over the phone. Some cards may even offer you points or cash back rewards with every purchase you make.
Prepaid Vs. Regular Credit Cards
The biggest difference between prepaid credit cards and traditional credit cards is that with the former, no credit is extended. Instead of having a credit limit to spend within, a prepaid credit card requires that you deposit a certain amount of your own money, and then spend up to that limit. In this way, you’re spending your own money rather than borrowing it.
| Prepaid Cards | Regular Credit Cards | |
| Source Of Funds | Preloaded with your funds | Borrowed funds from the credit issuer |
| Spending Limit | Limited to loaded amount | Up to your credit limit |
| Credit Check? | Not required | Required |
| Builds Credit? | No | Yes |
| Best For | Consumers with bad credit or no credit history | Consumers who want flexible spending & need to build or improve their credit |
The Best Prepaid Credit Card In Canada: Pros And Cons
Before taking out a prepaid credit card in Canada, make sure you understand their perks and drawbacks.
The Best Prepaid Credit Card In Canada: Pros
Prepaid cards offer several benefits:
- Easy to get approved for. You don’t need a strong credit score or a high level of income to secure a prepaid credit card.
- Can be used like a traditional credit card. You can shop online like you would with a regular credit card.
- Helps avoid overspending. If you’re prone to credit card debt and spending way more than you should, you can use your prepaid card to place a very low limit that you won’t be able to exceed.
- Can be a great tool for kids. Prepaid credit cards are a safe way for children to learn how to manage their money.
The Best Prepaid Credit Card In Canada: Cons
Despite their advantages, prepaid credit cards also come with a few downsides as well:
- Cannot be used to build credit. Your payment history is not reported to the credit bureaus, so you can’t use these cards to build credit.
- May come with various fees. Certain prepaid cards have transaction fees or even monthly fees that need to be paid.
- Not widely accepted. Certain stores may not accept prepaid credit cards, whereas traditional credit cards are often accepted in most stores and restaurants.
Learn more: What Are The Pros And Cons Of Prepaid Credit Cards?
Final Thoughts
Prepaid credit cards make it convenient for low-credit consumers to get access to a credit card without having to meet stringent approval criteria. If you lack the credit strength and income needed to get approved for a regular credit card but still want the convenience of shopping with plastic, then a prepaid credit card may be right for you.
Prepaid Card FAQs
Can I build my credit with a prepaid card?
When is a prepaid credit card necessary?
What do I need to get an unsecured credit card?
¹Minimum balance in a Neo Everyday account required to earn the highest rate. Cashback earn subject to monthly maximum spend limits. Cashback may be limited and varies by perks, offer, and partner. There may be monthly limits for boosted cashback offers.
