Best Prepaid Credit Cards in Canada

There’s more to prepaid credit cards than those Visa gift cards you find on display at your local Walmart. Our round-up of the Best Prepaid Credit Cards in Canada will explain how a prepaid card works and how it differs from a regular credit card. It’ll also show you our picks for the prepaid credit cards with the best perks, rewards, and features.

Prepaid credit cards are a handy and a debt-free stand-in for traditional credit cards. While there’s nothing wrong with a Visa gift card from a grandparent (thank you, Nana!), there’s a wider field of possibilities out there. The prepaid cards on this list are linked to accounts that you can load and reload, and that can actually earn you rewards.

TOP 5 CANADIAN PREPAID CREDIT CARDS COMPARED

Card

Best For

Fees

Rewards

Perks

Learn More

Neo Financial Logo

KOHO Premium

Best Prepaid Card

$9/month or $84/year

Up to 2% cashback

No foreign exchange fees, price protection and more

Tangerine Moneyback Mastercard

KOHO Prepaid Visa

Best no-fee prepaid card

$0

0.5% cashback plus bonus earnings

None

Scotia Momentum Visa Infinite

Stack Prepaid Mastercard

Best no-fee prepaid card with no foreign transaction fee

$0

Instant cashback at partner stores

No foreign transaction fees, no ATM withdrawal fees, and more

American Express Cobalt

CIBC Smart Prepaid Visa

Best prepaid card from one of the big banks

$0

None

None

TD Aeroplan Visa Infinite

CIBC Smart Prepaid Travel Visa

Best prepaid card for travelling

$0

None

Fixed exchange rate

What is a Prepaid Credit Card? (And Why Is That Name Actually Wrong?)

Fun fact: when we call these reloadable cards “prepaid credit cards,” it’s actually an inaccurate name. Prepaid credit cards aren’t credit cards at all. If anything, they’re more like debit cards, where you have a set balance in your account. You make purchases with your card and the balance in your account goes down.

By contrast, a typical credit card uses money (“credit”) that’s loaned by a bank or credit card company, and then you pay that loan back with interest.

It’s a common mistake and honestly, it’s understandable! Most prepaid cards are branded either as Visa or Mastercard, and you often use them the way you would use a credit card. So don’t worry too much about the name – people will know what you mean either way, and we’ve used both terms in this article.

Prepaid Credit Cards vs Secured Credit Cards

Prepaid cards are often considered a good option for people with low (or no) credit. And while it’s true that prepaid cards are often available when typical credit cards aren’t, they don’t help address the real problem: they don’t repair or build your credit.

Think of it this way: in order to build credit, you need to receive a loan and then make regular payments towards it. And as we’ve said, a prepaid credit card doesn’t involve a loan of any kind – it’s just another way to spend money you already have.

If your credit is poor and you want to repair it (or if you don’t have any credit and you want to build some), a prepaid card isn’t going to help you do it. However, you do have another option: a secured credit card.

You can read in detail about these cards and see a list of our favourites in our list of the Best Secured Credit Cards, but here’s how they compare to prepaid cards:

Prepaid CardsSecured Credit Cards
* Are available to people with poor or no credit
* Aren’t credit cards because there’s no loan involved
* You load a card and then spend the money you’ve loaded it with – more like a bank account than a credit card.
*Don’t affect your credit score
* Are available to people with poor or no credit
* Are credit cards because you’re given a loan (that you secure with a deposit)
* You pay monthly bills and fees
* The company reports your activity to the credit bureau
* Do affect your credit score. Regular bill payments mean your score improves

If you’re thinking of using a prepaid card because your credit isn’t great, a secured credit card could be worth considering instead. Your initial experience is the same: in both cases, you send a cheque to the card company for the amount of money you want to be able to access. But what the company does with that money is different, and that means the outcome for you is also different.

Prepaid Credit Card Pros and Cons

PROS:

  • Are available regardless of your credit score
  • Can help you make purchases online if you don’t have a regular credit card
  • Are reloadable
  • Often come with cashback rewards

CONS:

  • Don’t improve your credit score
  • Have limited perks, if any

Best Prepaid Card in Canada: KOHO Premium Prepaid Visa

Our editorial team agrees – the KOHO Premium Prepaid Visa is the best prepaid credit card on the market in Canada. With a monthly fee of $9 (or $84/year if you pay annually, which saves you $2/month), it’s the only prepaid card on our list that isn’t free. But here’s the thing: the fee translates to better rewards plus some useful perks.

The KOHO Premium Prepaid Visa card gives you 2% cashback on 3 spending categories, plus 0.5% cashback on all other purchases. It also offers price protection, financial coaching, and more. It’s designed to help you save your money – and based on the feedback we’ve seen, cardholders are finding it more than worth the investment.

Annual Fee: $9/month or $84/year

Earn rate:

  • 2% cashback on groceries, dining and takeout, and transportation
  • 0.5% cashback on everything else
  • More cashback (up to 5%) from KOHO Power Up Partners such as Indigo, Mary Brown’s Fried Chicken, and Well.ca

Perks:  

  • No foreign transaction fees
  • Price protection
  • On-demand financial coaching
  • One free international ATM withdrawal/month

KOHO isn’t a bank, it’s a Fintech company that’s dedicated to providing low cost, high reward financial services to their customers. If the idea of giving your money to a company that’s not a bank makes you nervous, it might help to know that they’ve partnered with a CDIC-insured bank to hold their customers’ accounts. That means you can be confident that your money’s not going anywhere you don’t want it to.

If you want a prepaid Visa card that gives you the perks of a regular credit card without charging you 19.99% annual interest, the KOHO Premium Prepaid Visa is a fantastic choice. While we’re fans of free, sometimes a premium fee is worth it. The KOHO Premium card also made our list of best credit cards in Canada – so you can go there and see how it stacks up against other types of credit cards.

Best No-fee Prepaid Card in Canada: KOHO Prepaid Visa

If the KOHO Premium Prepaid Visa is too pricey for your taste, consider the no-fee version. The KOHO Prepaid Visa offers 0.5% cashback on all purchases, plus bonus earnings (up to 5%) when you purchase from KOHO Power Up Partners.

The KOHO Prepaid Visa doesn’t offer any major perks besides cash back, but our editorial team agrees that it’s a solid deal for a no-fee card. The Power Up Partner offers can add up, and the base rate of 0.5% is equivalent to no-fee credit card offers (but you don’t have to pay any interest).

Annual Fee: $0

Earn rate:

  • 0.5% cashback on all purchases
  • Additional bonus earnings on KOHO Power Up Partners including Reebok, Pizza Pizza, and Contiki.

Perks:  None

KOHO cards can be used wherever Visa is accepted, are compatible with ApplePay, and are connected to an app that helps you manage your money better. And, just for fun, when you sign up for the no-fee KOHO Prepaid Visa, you get to pick your own card design from a selection of colour combinations (we’re fans of “Sunkissed Skinny Dip”).

KOHO also has an offer that allows you to earn 1.2% interest on the money in your account if you set up direct deposit. Considering that anything over 1% is considered “high interest,” that’s pretty darn impressive.

Best No-fee Prepaid Card with No Foreign Transaction Fees: Stack Prepaid Mastercard

Stack is another Canadian company out to transform the way we spend our money. The Stack Prepaid Mastercard is a no-fee prepaid card that offers instant cashback at over 140 partner retailers.

Stack Prepaid Mastercards can be used around the world, wherever Mastercards are accepted. They don’t charge foreign transaction fees or ATM withdrawal fees (although be warned: ATM providers often do). They also offer free “stack to stack” transfers between cardholders and a split the bill feature so that you can go out as a group and not worry about how people will pay their share.

Annual Fee: $0

Earn rate: Instant cashback at Stack partner stores (140+ stores)

Perks:  

  • No foreign transaction fees
  • No ATM withdrawal fees (unless charged by the ATM provider)
  • Free stack to stack transfers
  • A split the bill feature

We like the perks that the Stack Prepaid Mastercard offers, as well as the fact that they don’t charge foreign transaction fees. However, the downside of this card is that they don’t have a base cashback rate, just store-specific instant cashback offers. That’s not terrible… but we like KOHO’s offer better for everyday spending.

Different cards work better for different people, though. If you make the occasional US dollar purchase, or if you want to be able to use your prepaid card at Costco, the Stack Prepaid Mastercard might be the better choice for you. You can also check out other credit cards with no FX fees here, and see how the Stack Mastercard compares to those.

Best Big Bank Prepaid Card: CIBC Smart Prepaid Visa

Not every big bank in Canada offers a prepaid card, but CIBC does. It’s a no-frills card that doesn’t offer rewards or perks, but if you want the reliability of the CIBC name, this card is worth considering.

Annual Fee: $0

Earn rate: No rewards

Perks:  None

Both KOHO and Stack are CDIC insured for up to $100,000, but we get it—they’re newer companies and some people might prefer a name they already know and trust. If that’s you, consider the CIBC Smart Prepaid Visa. It gets the job done.

Best Prepaid Card for Travelling: CIBC Smart Prepaid Travel Visa

If you want a card specifically for travelling, consider the CIBC Smart Prepaid Travel Visa. When you open your account, you choose the currency you want, load the card, and take off. Because you load it in the currency you need, you pay a single, fixed exchange rate. You’ll know how much you have in your account whenever you spend, without needing to estimate anything.

Annual Fee: $4.95 customization fee

Earn rate: No rewards

Perks:  Fixed exchange rate

The CIBC Smart Prepaid Travel Visa is available in US dollars, British pounds, Euros, and Mexican pesos, so if you’re looking to travel somewhere like Australia or Asia, this won’t help you. However, if you’re going to be spending some time in Europe or other parts of North America, this no-fee prepaid Visa could save you some exchange rate-induced headaches.

The CIBC Smart Prepaid Travel Visa does charge $2.50 per transaction when you use ATMs outside of Canada, and if you use it for transactions in a currency other than the one on your card, they’ll charge a 2.5% conversion fee. But it’s still a unique idea for a card and is good to keep in mind if foreign exchange rates stress you out.

You can also read our article on the best travel credit cards for Canadians, and see why those are much better than CIBC’s Smart Prepaid Visa.

Canadian Prepaid Credit Cards: FAQ

Final Thoughts on Canadian Prepaid Credit Cards

If you’re in the market for a debt-free card that will allow you to make purchases both in store and online, a prepaid Visa or Mastercard could be a smart choice. While prepaid credit cards won’t help you improve your credit score, they can earn you cashback rewards and help you manage your spending.

Our favourite prepaid credit cards are the KOHO Prepaid Visas. The premium version comes with enhanced cashback rewards plus financial management tools. The no-fee version also comes with cashback rewards on every purchase, unlike the other cards on our list. Whichever of these cards you choose, your cash will be in good hands.

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Meg

Meg Goodmanson is a writer, editor, virtual assistant, credit card expert, and lifelong learner-of-things. A self-proclaimed nerd, Meg’s favourite thing is collecting information and presenting it in an interesting and helpful way—especially if it helps her travel for free!
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