The Best Prepaid Credit Cards in Canada: Everything You Need To Know in ‘24

September 11, 2023
12 min read

Prepaid credit cards are similar to debit cards but offer many of the perks of a credit card without the downsides. They are backed by money you load onto them rather than credit extended to you by a financial organization. With a prepaid card, you don’t receive a monthly bill. Once you use the balance you’ve loaded onto the card, you must reload it to continue spending. You also don’t pay interest on purchases you make with a prepaid card.

A prepaid credit card is a great alternative to a traditional credit card for those who don’t have access to credit products due to a limited credit history or low credit score. You can secure a prepaid credit card without undergoing a credit check, and you can use it to make purchases anywhere credit cards are accepted. 

Benefits of Using a Prepaid Credit Card

Even though they function similarly to debit cards, prepaid cards offer a lot of benefits that debit cards do not. Many prepaid credit cards are connected to rewards programs similar to credit card rewards. These programs enable you to earn cashback on purchases or collection points that you can redeem for discounts down the road.

Some cards offer low or no foreign exchange fees, making them a good option for travel and international purchases. Some prepaid credit cards even pay interest when you maintain a balance on the card!

Additionally, prepaid cards may offer purchase protection and other benefits that often come with credit cards, including CDIC deposit insurance.  

Types of Prepaid Credit Cards Available in Canada 

There are all kinds of prepaid credit cards in Canada to choose from, including prepaid Visa cards, Mastercards, and American Express prepaid cards. Just like traditional credit cards, each prepaid card has unique perks and features, so it’s worth comparing several cards to find the right fit for your spending style. 

Best Prepaid Credit Cards 

1. KOHO Mastercard Prepaid Credit Card

The KOHO Mastercard Prepaid Credit Card offers four different membership tiers, so you can choose what best suits your spending. The “Easy” plan has no monthly membership fee and offers 1% cashback on groceries and transportation. You can also earn 0.5% interest on your account balance. Higher tiers charge monthly fees but offer higher rewards and the option to opt-in to a credit-building program. 

2. Neo Money Card

The Neo Money card enables you to earn high interest on cash you keep on the card and cashback on your purchases. This account has no monthly or transaction fees, and deposits are eligible for CDIC protection. You can subscribe to add-on perks programs to amplify your cashback and rewards in certain spending categories, including travel or food and drink. Neo’s user-friendly app makes it easy to manage your account. 

3. EQ Bank Card

The EQ Bank Card is a prepaid Mastercard that has no monthly account fees. It offers 0.5% cash back on purchases, interest on your card balance, and free cash withdrawals from any ATM in Canada (fees are reimbursed monthly). This card has no foreign exchange fees, no monthly fees, and no hidden fees.     

4. BMO Prepaid Mastercard

The BMO Prepaid Mastercard has an annual fee of $6.95 and can be used anywhere that Mastercards are accepted. Unlike many other prepaid credit cards on this list, it doesn’t offer perks like cash back or interest on your account balance, but it does offer protection in the event of fraudulent card use. You can manage your card using the BMO app. 

5. CIBC AC Conversion Visa Prepaid Card

Designed for travellers, the AC Conversion Visa enables you to load the card with up to 10 currencies at a time, including CAD, USD, MXN, EUR, and more. There is no annual fee and no fee to purchase or reload the card. You can earn 1% cash back on purchases, and there are no foreign transaction fees for purchases made in the 10 supported currencies. Other currencies incur a 2.5% transaction fee. This card offers protection through Visa against unauthorized use of the card or account information.

6. The STACK Prepaid Mastercard

The STACK card offers instant cashback at over 140 retailers, including Roots, Indigo, Addidas, and HelloFresh, enabling you to save money while shopping with your favourite brands. Cardholders also receive cashback on foreign exchange fees and ATM fees. The card can be used anywhere Mastercard is accepted. Cardholders can manage their account with STACK’s user-friendly app, which also incorporates handy features such as free transfers to friends and family and the ability to split your tab among friends.  

7. Wealthsimple Card

The Wealthsimple Card has no monthly or annual fee, a $0 minimum, and no overdraft fees. This card also offers 4% interest on your account balance and has no foreign transaction fees. It also enables you to send and receive e-transfers from your Wealthsimple card account. There are three account tiers, Core, Premium, and Generation, which are available depending on the value of the assets you hold with Wealthsimple. Higher tiers offer higher interest rates and lower wealth management fees, which may appeal to investors. 

8. Canada Post Cash Passport Mastercard

Canada Post’s Cash Passport is a prepaid credit card aimed at travellers. It can be used at ATMs and sales points around the world, wherever Mastercard is accepted. You can load your card with Canadian Dollars, US Dollars, Australian Dollars, Japanese Yen, Euros, British Pounds, or Mexican Pesos, and it uses smart technology to determine which currency to select each time you make a purchase. These cards cost $15 to purchase, and there is a $3 fee for each reload. You must visit a Canada Post location to purchase and reload the card. 

9. The Titanium+ Prepaid Mastercard

The Titanium+ Prepaid Mastercard is available for purchase through MoneyMart for $9.99. Cardholders can opt into one of two plans: The Standard Plan ($6.50/month) or the Bundle Plan ($12.99/month). Depending on your plan, you can access benefits and avoid fees on certain actions, such as card reloading and in-store withdrawal fees.

The Titanium+ Prepaid Mastercard lets you load all or part of your paycheque or benefits payments directly onto the card using MoneyMart’s DirectLoad service rather than having them deposited into a bank account. DirectLoad claims that money will be transferred automatically on payday, so you have instant access to funds for spending. The Titanium+ card uses chip and PIN technology to secure cardholder funds and facilitate contactless payments. 

10. The Vanilla Visa and Mastercard

Vanilla Prepaid Visa and Mastercards function more like gift cards than other prepaid credit cards on this list. They are available for purchase from many major retailers throughout Canada, including Shell, Walmart, London Drugs, and more. The cards are available in pre-set denominations ranging from $50 to $500, and there is an activation fee due at purchase. Cardholders can check their balance online or by calling the number on the back of their card. These cards do not require a PIN; rather, sales are finalized with a signature.

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Fees Associated with Prepaid Credit Cards 

Prepaid credit cards don’t charge interest rates on purchases, but some of them do have fees. Some cards have purchase fees or activation fees. Some may charge transaction fees for certain types of purchases– usually international ones.

Prepaid credit cards may also charge reloading fees to incentivize cardholders to carry larger balances on their cards. Like any card, prepaid credit cards may also be subject to ATM fees. Some prepaid credit cards also incur inactivity fees if they aren’t used regularly. 

Read your cardholder agreement closely to understand the fees associated with your card so you can offset them whenever possible. 

Tips for Using Prepaid Credit Cards in Canada

Track Your Spending 

Loading a consistent balance onto your prepaid credit card each month makes it easy to track your spending. If your card offers rewards, such as cashback on groceries or gas, capitalizing on those perks makes a prepaid card a great budgeting tool. 

Avoid Using Prepaid Credit Cards for Online Purchases 

Using prepaid credit cards for online purchases isn’t ideal because these cards don’t always offer the same fraud protection as a traditional credit card. If your card data is compromised, it may be harder to recoup funds. According to Canada’s Financial Consumer Agency, prepaid cards are not protected unless they have been registered with the issuer.

Before making online purchases with a prepaid card, review your cardholder agreement carefully to ensure you understand what type of fraud protection your account offers. 

Make Sure to Reload Your Card Regularly 

Reloading your card regularly is key to offsetting inactivity fees and ensuring you always have money available on your card. Depending on how your prepaid card factors into your spending, setting up automatic transfers to reload it every week or every month ensures you don’t risk the dreaded insufficient funds notification the next time you make a purchase. 

Common Questions about Prepaid Credit Cards 

What is a prepaid credit card? 

A prepaid credit card is a type of card that is pre-loaded with funds. You can only spend up to the amount that's been pre-loaded onto the card. 

How does a prepaid credit card work? 

You load money onto the card, and as you use it, the money is deducted from the balance. Once the balance reaches zero, you must reload the card to use it again. 

Where can I purchase a prepaid credit card? 

Prepaid credit cards are often available at financial institutions, online, or at retail locations like supermarkets or drug stores. 

Can I use a prepaid credit card anywhere? 

Prepaid cards are typically accepted anywhere that regular credit cards are. However, some businesses might not accept them, and there could be restrictions on international use. 

Does using a prepaid credit card build credit history? 

No, prepaid credit cards are not linked to a line of credit and don't report activity to the credit bureaus, so they do not help build credit history. 

Are prepaid credit cards safe? 

Yes, they are generally safe, but they do not have all the protections of traditional credit cards. Also, if lost or stolen, someone else could use the funds on the card. 

What are the fees associated with prepaid credit cards? 

Fees can vary widely depending on the card. Common fees include monthly fees, ATM withdrawal fees, reload fees, and transaction fees. Always read the cardholder agreement before purchasing a prepaid card. 

Can a prepaid credit card be reloaded? 

Yes, most prepaid cards allow you to reload funds. The methods to reload can vary from card to card and may include direct deposit, cash reload at participating locations, bank transfers, or mobile check deposits. 

Do prepaid credit cards have expiration dates? 

Yes, they usually do. The expiration date is typically printed on the front of the card. However, the funds may still be available after the card expires. Check the cardholder agreement for specifics. 

Can I get a refund on a prepaid credit card? 

It depends on the card issuer's policies. Some may allow refunds for the remaining balance, while others may not. It's best to check the card's terms and conditions.

September 11, 2023
12 min read