The Best Prepaid Credit Cards in CanadaMay 18, 2023
While credit cards are a great idea when it comes to building your credit score, not everyone can get them or wants to have one. If this is the case, what do you do if you need a credit card? Well, in a case like that, you may want to consider a prepaid credit card.
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These cards are like a cross between a debit card and a credit card, sort of like a Visa/Mastercard debit. You can add money to these cards and use them like a credit card, whether that be online or in person.
Where to Purchase a Prepaid Credit Card
Surprisingly, prepaid credit cards are more readily available than you may think. Not only do banks offer them, but you can get them through many online institutions as well. There are plenty of different cards to choose from. Many of these offer rewards that are equivalent to traditional credit cards.
Prepaid Credit Card Options in Canada
As we mentioned, there are plenty of prepaid credit card options in Canada. Here are some of the most popular ones that offer the best benefits.
KOHO Prepaid Mastercard
The great thing about the KOHO prepaid cardis that you can put as much money on there as often as you want. If you attempt to use your card and there are no funds on it, there are no NSF fees like you would find on a debit card. You just receive a notification informing you that you have no funds in your account.
In order to put money into your account, it’s actually quite simple. You can set up automatic payments. They also offer incentives for using your card. You can earn cashback on all purchases. They also are partnered with some companies that will earn you more cashback than others.
This card is technically a debit card that doubles as a credit card. You earn on your purchases and can buy things online without paying any interest on your purchases.
Stack Prepaid Mastercard
The Stack Prepaid Mastercard comes with all the benefits of Mastercard without the interest rates. Unlike traditional credit cards where you earn points or cashback you can claim when you have reached a certain amount of points, With the Stack card you get instant cashback on everyday purchases. You can also get cashback on foreign exchange fees and can be used worldwide.
Another great perk that comes with this card is that you can get paid up to 2 days early if you get a direct deposit set up for your paycheck into your stack account. With their app, you can also track your spending. It even categorizes your weekly and monthing transactions.
Neo Money Card
The Neo Money Card is different from other prepaid credit cards. Not only can you earn cashback every time you use your card, you also can earn interest on your savings. On top of that, there are no annual fees. Some of the unique features of this card include:
- No cap on cashback
- ATM access anywhere Mastercard is accepted
- Free everyday transactions
- No monthly fees
- Instant access to your balance
- No card loading required
With the Neo app you will soon be able to track your spending and keep track of your cashback. You can also automate your savings and receive e-transfer auto deposits. You can even set up auto payments on your bills.
Even though Neo isn’t a traditional financial institution, your money is still protected here by the CDIC (Canada Deposit Insurance Corporation) insurance. This is because the Neo Money Account is provided by Concentra Bank which is a CDIC member institution.
EQ Bank Card
This is another prepaid card that is available to Candians in every province except for Quebec. The EQ Bank Card is similar to the Neo Money Card in the fact that it is a bank account as well as a credit card. The features included with this card are:
- Cashback (0.5%) with every purchase
- No foreign exchange fees
- No monthly or annual fees
- No hidden fees
- Free withdrawals from any Canadian ATM
- Earn 2.5% on money in your account (until you spend)
When it comes to any ATM fees that other banks charge, you will get reimbursed by EQ bank to your account. Unlike Neo, though, you do have to transfer money onto your card in order to be able to spend it. The great thing is though there are no minimum deposit amounts.
Your money is also protected by CDIC insurance with EQ bank since EQ bank is a trade name of Equitable Bank. Deposits made under either of these banks are eligible for CDIC protection up to $100,000. This is valid per insured category by person. Since the card is a Mastercard, even though there are no foreign exchange fees, you do have to pay the Mastercard Currency Conversion rate.
Canada Post Cash Passport Mastercard
This prepaid credit card can be loaded with a number of different currencies to make traveling easier. It’s also safer than carrying cash. The credit thing about this card is that it has smart technology that always knows the correct currency to use. Because of this you can loan one or more currencies at the same time. The current accepted currencies are:
- Canadian Dollars
- US Dollars
- British Pounds
- Japanese Yen
- Australian Dollars
- Mexican Pesos
The Canada Post Cash Passport Mastercard also has a feature that if you try to pay and don’t have enough of that currency, it will take from another currency. This will stop your transaction from being declined, but some foreign exchange fees will apply.
Because this prepaid card is also a Mastercard, it comes with some amazing features that will help keep your money protected. You can reload online or in a branch, if you lose your card on a trip you will be able to get a new card or money transferred to you, and you get 24/7 global assistance from Mastercard.
Wealthsimple Cash Mastercard
The Wealthsimple Cash Mastercard is another card that can be accepted online, in store or on an app. When you set up direct deposit to your account, you earn up to 3% interest on your entire Wealthsimple Cash balance. Your money is also held by a CDIC member institution, and up to $100,000 is protected.
This card is really easy to set up. You just download the app and set up your account. From there you can start spending right away. You also earn 1% cashback in stock, crypto or cash on almost everything that you purchase. There are also no fees.
Like a traditional credit card you can also use this card in other countries and there are no foreign exchange fees. However, there is a 1% currency conversion fee that is charged by Mastercard. If you do decide that you need cashback from your account, there are no ATM fees.
Mogo Prepaid Visa
The Mogo Visa Platinum Prepaid card is considered to be a green alternative to credit cards. With every transaction that you make, you earn 50 green satoshi rewards and one tree gets planted. There are no annual fees, but you also don’t earn any rewards either with this card.
Included is free credit checks and free credit monitoring. There are no credit checks required and no income requirements.
The Best Bank Prepaid Card
When it comes to the big 5 banks, not all of them offer prepaid cards. Some of them only offer Visa Debit. The thing to remember though, is that you don’t have to be a member of the bank in order to get the prepaid card. You only need an account to get a Visa Debit card. That said, the two banks that do offer prepaid cards are BMO and CIBC. Both of these cards have their own incentives, but, depending on what you need in a card, one might work for you better than the other.
At one point, Scotiabank did offer a prepaid Visa gift card. They were active up until 2019. Now, Scotiabank just offers their Visa Debit card. This is just your regular bank account, but you can use the card to make online credit card purchases. It not only works for Canadian purchases, but US ones as well. If you use your bank card in the US, then the card acts as a credit card. You don’t have to get a credit card just to shop in the US.
As of 2021, RBC stopped issuing prepaid visa cards. They only have Visa Debit cards. The card works just like the ones at the other banks. The only fees are your monthly bank fees. Your Visa Debit card acts as a credit card, and can be used internationally, not just domestically. It can also be used to set up pre authorized payments.
BMO Prepaid Mastercard
The BMO Prepaid Mastercard is a little different than the other prepaid cards that we have discussed. That said, it is essentially a reloadable card that comes with all the same benefits as a traditional Mastercard. It is easy to load as you can do it online or through the mobile banking app. You can use the card like a traditional credit card and it can be used anywhere a Mastercard is accepted.
Like other prepaid cards, this card has no interest on purchases and no interest on cash advances. There is an annual fee of $6.95 though. However, there is extended warranty and purchase protection on things you purchase with the card. There is also zero liability protection if your card was fraudulently used and alerts for every transaction so you can verify that all of the purchases were made by you.
CIBC Prepaid Visa
CIBC used to offer a variety of prepaid visa cards. As of January 31, 2023, these cards were no longer active. Now they offer the CIBC Air Canada AC Conversion Visa Prepaid Card which is much more versatile than the other cards that were offered. It can be used abroad or online, and you can load up to 10 currencies at a time.
The great thing about this card is that there are no fees (including foreign transaction fees) and you can earn up to 1% cashback on all of your purchases. All cards also have chip and pin technology, to keep your money more secure. Also, there is no minimum loan requirement. you don’t have to pass a credit check, and you don’t need to be a CIBC customer in order to get a card.
The 10 currencies that can be put on this card are:
- Canadian Dollars
- US Dollars
- British Pounds
- Australian Dollars
- Japanese Yen
- Hong Kong Dollars
- Turkish Lira
- Swiss Francs
- Mexican Pesos
TD Prepaid Visa
You may have heard of theTD Prepaid Visa but, as of October 15, 2021, it no longer exists. There is now the TD Visa Debit. How this works is pretty simple. Your standard bank card has a number, expiration date and CVV number that can be used as a credit card. There are no extra fees for this service. It comes standard with your bank account. The only fees are your standard bank account fees that go with your chequing or savings account.
The Best Card with No Fees
When it comes to prepaid cards with no fees, there are quite a few options to choose from. Most of the cards from the big five banks have no fees but there are account fees that you have to pay. The other cards are all great choices, but if you have to pick the best then it’s a toss up between the Neo Money Card and the EQ bank card.
Both of these cards not only have great rewards, they also have many perks that traditional credit cards have. Your money is even protected by the CDIC. Both of these cards allow you to track your spending and spend internationally without any foreign transaction fees.
The Best Reloadable Card
Reloadable prepaid credit cards are becoming quite popular. One of the best and most recommended is the KOHO card. Not only is it reloadable, but it’s simple to use and there are no NSF fees if you don’t have enough funds on your card. It’s simple to reload your card since you can set up automatic payments and there is no minimum requirement for you to upload.
The Best Visa Gift Card
If you are looking to use a credit card one time or want to give money in a different way, then a Visa Gift Card may be an option for you. That said, Visa gift cards are to be treated like cash and don’t have the same protections that a prepaid credit card would have. Depending on the gift card that you purchase, they can either be digital or you can purchase a hard copy.
Vanilla Prepaid Visa and Mastercard
Vanilla Prepaid Visas and Mastercards are more of a gift card than your traditional prepaid credit card. They can be purchased in predetermined amounts and are accepted everywhere that Visas and Mastercards are accepted. The funds on them never expire and there is no pin needed.
These cards can be purchased for yourself or as a gift, but they do have some limitations. They aren’t returnable or refundable, and you aren’t able to use them for cash advances. They also can’t be used for preauthorized payments. It also can’t be used to pay at the pump gas purchases. Basically, these cards are meant to be used for online or in person purchases.
The activation fees for each card will depend if the card is a Visa or Mastercard, as well as the denomination.
|$60 (3 x $20)||$8.95|
|$20-$500 (variable load card)||$7.95|
|$20-$500 (variable load card)||$7.95|
American Express Prepaid Credit Cards
Just like the Vanilla prepaid cards, you can purchase American Express prepaid cards. Unlike the Vanilla cards though, you can’t purchase them in a store, you need to purchase them online. Once they have been purchased, they should only take a few days to arrive. They are also available in predetermined denominations.
These cards have no monthly fees or activation fees. THey can be used anywhere that American Express cards are accepted.
Siimpli Financial Visa Gift Card
Siimpli Financial is another financial institution that offers a form of a prepaid Visa. The difference between Siimpli Financial’s prepaid card and the rest of them is that it’s a Visa Gift Card instead of a prepaid credit card. Theri card is also digital, so it;s a great way to purchase a prepaid card online.
This card can be used online or in person using a digital wallet. Even though this Visa Card is very convenient and easy to use, it isn’t reloadable. The key features of this card are:
- Values from $25 to $250
- Can be sent through email
- No purchase fees
- No activation fees
- Works with Apple Pay, Google Pay, and Samsung Pay
- Are able to personalize it with a note
- Can purchase merchant-branded cards
- The funds don’t expire
In order to purchase a Siimpli Financial Visa Gift Card, you first need to have a Siimpli FInancial account. That said, the person that you send it to doesn’t need to have one. There is even a gift card catalogue where you can choose a theme for the gift card.
If you do decide to purchase a gift card, it’s important to remember that this Visa gift card doesn’t have the same security as a Prepaid credit card. Your funds aren’t insured by the CDIC.
Difference Between a Secured Credit Card and a Prepaid Credit Card
The differences between secured credit card and prepaid credit cards are pretty significant but the main difference is that secured credit cards affect your credit score and prepaid credit cards don’t.
Depending on the type of secured credit card that you choose, there is usually a deposit that you have to put down. Depending on your approval, you also have different maximum credit limits. The idea behind this version of a credit card is to help you increase your credit score. The way to do this is to make your credit card payments on time and keep your overall balance below 35%.
Prepaid credit cards don’t affect your credit score at all. The only way you can use them is by loading them with funds. Depending on which prepaid limit you use, you may have to pay some activation fees as well. They are a great way to spend your money in places where a credit card is required and you need your money protected.
Prepaid Credit Cards Versus Visa/Mastercard Debit
While prepaid credit cards and visa debit cards are very similar, there are a few differences between the two.
Access to Funds: In order to use a prepaid credit card, you need to upload the funds. These reloadable prepaid cards can be loaded whenever. Most have no minimum requirements either. Credit/debit cards use the money that’s directly in your bank account.
Fees: Most prepaid credit cards have extra purchase protection included and have no fees. Credit/debit cards have the monthly bank account fees that need to be paid.
Foreign Exchange Fees; Prepaid credit cards often don’t charge foreign exchange fees and many can be used with multiple different currencies. Credit/debit cards often will work in the US as well as Canada, but not always in other countries. There may also be some conversion fees involved.
There really are reasons to have both types of cards though. The prepaid credit cards are best for traveling and making exchanging currencies easier. Credit/debit cards are great for making convenient online purchases with money that is already in your bank account.
Prepaid Credit Cards Versus Visa Gift Cards
First, it’s important to note that neither card will affect your credit score or impact your credit history. It’s secured credit cards that report your payments to the credit bureaus. Prepaid gift cards are essentially just a way for you to give cash, but not in the physical form. Prepaid credit cards are a great way to get extra insurance on your purchase, put your money in a safe place and get the benefits of a credit card without having to pay any of the interest fees.
Reasons to Get a Prepaid Credit Card
Many people choose to get prepaid credit cards for many reasons. They can be a handy tool for those who don’t want to spend the extra money on fees and interest. Here are a few of the other reasons:
- Budgeting purposes
- Avoid overdraft fees
- Limit spending
- No bank history checks
- Earn Rewards
All of these reasons can make it difficult for people to hold regular bank accounts. Many banks will check your previous banking history and will issue an overdraft just for opening your account. A prepaid credit card won’t allow you to go over the amount that has been added to your card.
They are also great for traveling since many of them will take different currencies and they have limited fees. It also avoids the fact that you have to travel with cash. This can make traveling easier and more efficient.
Downside to Prepaid Credit Cards
The biggest downside to a prepaid credit card is that it doesn’t affect your credit score. Regular credit cards report directly to the credit bureaus, allowing you to slowly bring up your credit rating and get better financing rates in the future. As much as you pay your prepaid credit card, it won’t be even close to having the same effect.
Overall, it’s pretty easy to get a prepaid credit card. You don’t even have to apply. As long as you keep loading your card up, the money will never expire and you don’t need to worry about going over your limit. There are no extra fees or penalties to worry about either. That said, because you are now using a credit card instead of a debit card, you no longer have to worry about losing your cash.