Prepaid cards are the best option for Canadians who can’t qualify for a traditional credit card: newcomers, teens, or anyone rebuilding credit after a rough financial period. You load money onto the card and spend only what you’ve loaded, which makes overspending impossible. The trade-off is lower rewards (0.5–2% vs 1–5% for traditional credit cards) and the fact that most prepaid cards don’t build credit. The exception is KOHO, which offers an optional credit-building feature that reports to Equifax, making it the only prepaid card in Canada that can improve your credit score. It’s one of our credit card roundups; for the Vanilla gift-style cards specifically, see the Vanilla prepaid card guide.
Best Prepaid Cards Compared
| Card | Fee | Rewards | Foreign transaction fee | Suits |
|---|---|---|---|---|
| KOHO Essential Mastercard | $0/mo | 1% groceries/eating & drinking/transportation, 0% other purchases, up to 6.5% extra at partner merchants | 1.5% | A low-cost everyday card |
| KOHO Extra Mastercard | $144/year ($12/mo) | 1.5% groceries/eating & drinking/transportation, 0.25% other purchases, up to 6.5% extra at partner merchants | 0% | Cash back plus interest on the balance |
| KOHO Everything Mastercard | $177/year ($14.75/mo) | 2% groceries/eating & drinking/transportation, 0.5% other purchases, up to 6.5% extra at partner merchants | 0% | The highest KOHO rates |
| Wealthsimple Chequing card | $0 | No rewards program (prepaid card); up to 2.25% interest on linked account balance instead | 0% | Wealthsimple clients |
| CIBC AC Conversion Prepaid | See CIBC | Aeroplan points | See CIBC | Travel points |
| Neo Money | See Neo | Partner cash back | See Neo | Neo users |
| Canada Post MyMoney | Monthly fee | None | See Canada Post | Reloading with cash, no bank account |
KOHO
KOHO is the clear leader in the Canadian prepaid space because it combines cashback, savings interest, and an optional credit-building add-on in one card. Unlike some fintech competitors, all three KOHO tiers run on Mastercard, not Visa. The Essential plan costs $0 a month and earns 1% cash back on groceries, eating & drinking, and transportation, plus up to 6.5% at partner merchants and 2% interest on your balance. Upgrading to Extra ($144/year) boosts the category rate to 1.5% and balance interest to 2.5%, and unlocks a discounted credit-building add-on ($7/month, not free). Everything ($177/year) pushes the category rate to 2% and balance interest to 3.5%, with an even cheaper credit-building add-on ($5/month). None of the three tiers shown above include credit building for free – on Essential, Extra, and Everything it’s always a paid add-on. KOHO’s separate no-fee Core plan (not shown in the table above, since it isn’t sold as a distinctly-branded card) is the one KOHO tier where Credit Building is included free.
Plan Comparison
| Feature | Essential ($48/yr) | Extra ($144/yr) | Everything ($177/yr) |
|---|---|---|---|
| Cashback (groceries/eating/transportation) | 1% | 1.5% | 2% |
| Cashback (other purchases) | 0% | 0.25% | 0.5% |
| Partner cashback | Up to 6.5% | Up to 6.5% | Up to 6.5% |
| Balance interest | 2% | 2.5% | 3.5% |
| Credit building | $10/mo standalone (free on the separate no-fee Core plan) | Discounted add-on ($7/mo) | Discounted add-on ($5/mo) |
| Foreign transaction fee | ~1.5% (lower than the ~2.5% standard) | 0% | 0% |
| Network | Mastercard | Mastercard | Mastercard |
Pros and Cons
| Pros | Cons |
|---|---|
| No credit check | Cannot be used for all pre-authorized payments |
| Automatic savings features | Lower cashback than traditional credit cards |
| Credit building option | ATM fees may apply (Cirrus network; Extra/Everything include one free international withdrawal/month) |
| Partner cashback up to 6.5% | Some merchants may not accept prepaid |
| CDIC-protected deposits (opt-in required via Earn Interest) |
Wealthsimple Chequing (formerly Wealthsimple Cash)
| Feature | Details |
|---|---|
| Cashback | None – no rewards program (value comes from account interest instead); the prior 1% cash back program ended October 1, 2025 |
| Monthly fee | $0 |
| Savings interest | 1.25% Core / 1.75% Premium / 2.25% Generation, tiered by total Wealthsimple assets (each +0.5% with a qualifying $2,000+ direct deposit) |
| Network | Mastercard, transitioning to a Visa Platinum Prepaid card in phases (rollout began September 10, 2026) |
| Foreign exchange fee | 0% (no FX fees, on either network) |
| Credit building | ❌ |
| Best for | People already in Wealthsimple ecosystem |
Prepaid vs Secured vs Regular Credit Card
If your goal is to build credit, a secured credit card is usually the better choice over a prepaid card because all secured cards report to the credit bureaus automatically. A prepaid card like KOHO can build credit too (with the paid add-on), but a secured card gives you a real credit limit and a traditional credit history that looks better on your report. If you just need a card for budgeting or online purchases and don’t care about credit building, prepaid is simpler and has no interest charges.
| Feature | Prepaid Card | Secured Credit Card | Regular Credit Card |
|---|---|---|---|
| Credit check | ❌ None | Sometimes minimal | ✅ Full check |
| Builds credit | Usually no (KOHO optional) | ✅ Yes | ✅ Yes |
| Spending limit | Based on loaded funds | Based on deposit | Based on creditworthiness |
| Annual fee | Usually $0 | $0-$75 | $0-$170+ |
| Interest charges | None (prepaid) | 19-22% | 19-22% |
| Rewards | Limited | Minimal | 1-5% cashback/points |
| Best for | No credit history, budgeting | Building/rebuilding credit | Established credit |
Prepaid Card or a No-Fee Chequing Account?
For someone who can open a bank account, a no-fee chequing account does more than a prepaid card: it can write cheques, pay bills straight from the account and use the bank’s own ATMs. A prepaid card can’t be overdrawn and needs no credit check, and KOHO adds cashback and an optional credit-building feature. If getting an account is the obstacle, the guide to opening a bank account explains the ID banks accept.
Who Should Use a Prepaid Card?
| Situation | Why Prepaid Works |
|---|---|
| No credit history (newcomer) | No credit check required |
| Rebuilding credit | Can pair with KOHO credit building |
| Teenagers (13+) | Parental controls, budgeting |
| Budgeting discipline | Can only spend what you load |
| Online purchases (security) | Limited exposure if compromised |
| International travel | Some prepaid cards charge little or no FX fee |
| No bank account yet | A prepaid card can receive direct deposits (KOHO, Wealthsimple) or be reloaded with cash (Canada Post MyMoney), so it works for people without a bank account |
For under-18s who want a full bank account rather than a prepaid card, teen bank accounts are the alternative.
How to Choose
| Priority | Best Card |
|---|---|
| Best cashback (free) | KOHO Essential |
| Best cashback (paid plan) | KOHO Everything |
| Build credit with prepaid | KOHO Extra or Everything |
| Lowest FX fee | KOHO Extra or Everything, or Wealthsimple |
| Interest on the balance | Wealthsimple |
| Best for teens | KOHO (age 13+) |
| Investing and banking in one place | Wealthsimple |
The Bottom Line
KOHO Essential is a low-cost prepaid card with cash back, and KOHO Extra is a strong option if you want to build credit without a traditional credit card. Once your credit is established, graduate to a real credit card for higher rewards and better purchase protection.
Related Resources
Sources
The figures and rules on this page come from these sources. How we check facts.
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- americanexpress.com: Cash Back Credit Cards | Amex Canada
- americanexpress.com: American Express® No Annual Fee Credit Cards | Amex CA
- americanexpress.com: American Express® Business Gold Rewards Card | Amex CA
- americanexpress.com: Business Platinum Card® From American Express | Amex CA
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