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Published June 9, 2022

7 Best Prepaid Credit Cards in Canada for 2022

The best prepaid cards are reloadable, earn rewards, have minimal fees, and allow you to make in-store purchases, pay bills online, send e-transfers, and more.

Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own.

A prepaid card, sometimes incorrectly referred to as a “prepaid credit card”, can serve as a budgeting tool, interest-earning bank account, or an easy way to make convenient online or in-store purchases. Some prepaid cards even earn rewards, so it’s no surprise that this widely-accepted payment method has grown 34.2% from 2015 to 2020[1].

Whether you’re new to prepaid cards or one of the more than 50% of Canadians[1] who have used at least one prepaid card (virtual and physical) in the last month, make the most of this growing payment method by using one of Canada’s best prepaid cards.

Best prepaid cards in Canada

Best overall prepaid card

KOHO Premium Reloadable Prepaid Mastercard

  • Annual Fee
    $84
  • Rewards Rate
    0.5%-8%
  • Minimum Deposit
    $0
  • Maximum Deposit
    $200,000
  • Intro Offer
    Free 30-day trial
  • Our Take
    Why we like it

    KOHO offers two tiers of prepaid cards: a standard card and a premium card. Both combine the benefits of a debit card and a credit card with cash back rewards, limited fees and the ability to build credit. Plus, KOHO doesn’t charge interest — instead, they let you earn interest on every dollar you save in your KOHO account.

    Pros
    • An app that tracks your spending, helps with budgeting, offers free financial coaching, and the ability to earn 1.2% interest on your entire account.
    • Access to a credit building service that reports your payments for only $7 per month — a rare feature for a prepaid card.


    Cons
    • KOHO is a tech-focused company, so if you’re uncomfortable with digital banking, it may not be the right choice.
    • KOHO isn’t a credit card, which means you can’t borrow any money. You can only access the funds already in your account.
  • Product Details
    • Up to 8% cash back at select KOHO partners.
    • 2% cash back on transportation, groceries and restaurants.
    • 0.5% cash back on everything else.
    • Cash back is instantly added to your KOHO Savings account.
    • $9 monthly fee/$84 annual fee, + a 30-day free trial.
    • No foreign exchange fees.
    • 1 free international ATM withdrawal per month.
    • Subscribe to Credit Building for $7/month in-app.
    • Earn 1.2% interest on every dollar you save in your KOHO account.
    • A new look. Get an optional snappy new vertical Premium card! Accepted everywhere Mastercard is.
    • Price match. We offer in-app price protection to get the absolute lowest possible price on your Purchases
    • Priority customer support. Premium users always skip the line
    • Personalized financial coaching on demand. Ask our in house certified financial coach any money question you have.
    • To be eligible, you must be a Canadian resident of the age of majority in the province or territory where you live.

Best no-fee prepaid card

KOHO Standard Prepaid Mastercard

  • Annual Fee
    $0
  • Rewards Rate
    0.5%-6%
  • Minimum Deposit
    $0
  • Maximum Deposit
    $200,000
  • Intro Offer
    N/A
  • Our Take
    Why we like it

    KOHO offers two tiers of prepaid cards: a standard card and a premium card. Both combine the benefits of a debit card and a credit card with cash back rewards, limited fees and the ability to build credit. Plus, KOHO doesn’t charge interest — instead, they let you earn interest on every dollar you save in your KOHO account.

    Pros
    • An app that tracks your spending, helps with budgeting, offers free financial coaching, and the ability to earn 1.2% interest on your entire account.
    • Access to a credit building service that reports your payments for only $7 per month — a rare feature for a prepaid card.


    Cons
    • KOHO is a tech-focused company, so if you’re uncomfortable with digital banking, it may not be the right choice.
    • KOHO isn’t a credit card, which means you can’t borrow any money. You can only access the funds already in your account.
  • Product Details
    • Up to 5% cash back at select KOHO Partners.
    • 0.5% cash back on all purchases.
    • Cash back is instantly added to your KOHO Savings account.
    • $0 annual fee.
    • Choose from one of four card colours.
    • Receive both a physical and virtual card. For new users, you can start adding funds and shopping online while you wait for your physical card to arrive in the mail. No need to budge from your couch to make online Purchases! Just use your virtual card instead of getting up to find your wallet. Plus, it uses a different card number to help protect your physical card number when you’re shopping or booking services online.
    • Add your KOHO card to Apple, Samsung or Google Pay.
    • Access your payroll up to 3 days early with the Early Payroll feature.
    • Automate your savings with Goals and RoundUps. Rounding up every Purchase lets you stash away some savings, while Goals make it easier to save for whatever it is that makes you happy.
    • Lock in savings with Vault that keeps the funds you don’t want to spend separate from your spendable balance.
    • Create custom budgets and track your spending habits. Know where you're at in real time with instant notifications every time you spend.
    • To be eligible, you must be a Canadian resident of the age of majority in the province or territory where you live.

Best prepaid Visa card for novice investors

Wealthsimple Card

  • Annual Fee
    $0
  • Rewards Rate
    1%
  • Minimum Deposit
    $0
  • Maximum Deposit
    Unlimited
  • Intro Offer
    N/A
  • Our Take
    Why we like it

    Beginner investors interested in learning more about building wealth will feel right at home with the Wealthsimple Card, a no-fee prepaid Visa that earns 1% cash back on purchases. Use the rewards to support your TFSA, invest in stocks, ETFs and crypto, or fund your linked spending (Cash) account, where you can send, spend and receive money instantly with the Wealthsimple Cash app.

    Pros
    • Use a Visa or Mastercard debit card to instantly deposit up to $1,000 per day (up to a maximum of $10,000 per month).
    • Effortlessly build an investment portfolio by transforming cash back rewards into stocks, ETFs or cryptocurrency deposited directly into a trading account.


    Cons
    • There’s no brick-and-mortar location for Wealthsimple customers, so you need to be comfortable managing your money with an online-only company.
  • Product Details
    • General fees and features: Wealthsimple does not charge any fees to use the Wealthsimple Card.
    • Purchases: Visa will charge a currency conversion fee on purchases made in a currency other than CAD. There is a $5,000 maximum spending limit, per transaction and per day.
    • ATM withdrawals: Wealthsimple does not charge any fees for withdrawing cash, but you may see a standard ATM withdrawal fee (usually about $3.00) when you make a withdrawal at an ATM. ATM Withdrawal limits are $500 per transaction and $1,000 per day.
    • Reload methods: Add funds to your card by making a deposit via a linked bank account, a wire transfer, your Visa or Mastercard debit card, or an institutional transfer to move an account from another institution. Deposits into spending (Cash) accounts are subject to a $1 million limit per transaction and a $1.5 million daily limit.
    • Rewards: Earn 1% cash back on eligible purchases. Cash back rewards can go directly into your Spend account, be added to the cash balance of a stock trading or crypto trading account, or be used to auto-purchase the cryptocurrency of your choice in your crypto trading account.
    • Use the card anywhere Visa is accepted — in-store, in apps, or online. Pay bills, use direct deposit, and e-Transfer.
    • The Wealthsimple Card is available as part of the everyday spending account, which comes with both a digital and physical card that you can manage right from the Wealthsimple app.
    • To open your account, download the Wealthsimple Cash app, tap “Spend”, add the card to your phone’s wallet, then add funds. Your physical card will arrive by mail in a couple of weeks — but you can start earning rewards right away with the digital card.
    • Use the app to manage your rewards and spending preferences, or lock your card if something happens to it. Your balances are all updated in real-time, too — even if you’re using the physical card.
    • Add your Wealthsimple Card to Apple, Samsung or Google Pay digital wallet.
    • Use the Wealthsimple Cash app to send and receive payments to anyone else who uses the Cash app without paying fees. You can also send money to people who don't have the Cash app yet. They will receive a prompt to download the app and claim the money you sent them.
    • Your money is protected for up to $100,000 through CDIC.
    • To be eligible, you must be a Canadian resident with a Social Insurance Number of the age of majority in the province or territory where you live.

Best prepaid card for travel and foreign currencies

Air Canada AC® Conversion Prepaid Visa Card

  • Annual Fee
    $0
  • Rewards Rate
    1%
  • Minimum Deposit
    $0
  • Maximum Deposit
    $20,000
  • Intro Offer
    1% cash back
  • Our Take
    Why we like it

    The Air Canada AC® Conversion Prepaid Visa Card can carry and spend up to 10 foreign currencies at a time, allowing international students, frequent travellers, and newcomers to Canada to bypass exchange rate fluctuations and skip the extra conversion fee. As a bonus, cardholders can earn 1% cash back in the foreign currencies they use.

    Pros
    • Load up to 10 foreign currencies from 45 countries and skip conversion fees when you make a purchase. Currencies include CAD Canadian dollars, USD U.S. dollars, EUR Euros, GBP British pounds, AUD Australian dollars, JPY Japanese yen, HKD Hong Kong dollars, TRY Turkish lira, CHF Swiss francs, and MXN Mexican pesos.
    • You won’t be charged foreign transaction fees, which are typically around 2.5%-3.5%. This means you can save as much as $35 CAD in fees for every $1,000 CAD spent in a preloaded foreign currency.


    Cons
    • You can’t withdraw more than $2,000 CAD per day at an ATM and only get one free ATM withdrawal per month outside of Canada.
    • You can’t use this card to transfer money to friends or family.
  • Product Details
    • General fees and features: There’s no fee to order the card, no fee to load it, and no annual fee.
    • Purchases: No fees for CAD purchases and no conversion fees when you make a purchase in one of 10 supported foreign currencies. There’s a 2.5% foreign conversion fee for transactions made in a currency other than the 10 supported currencies. The daily (24-hour) maximum point-of-sale purchase limit is $2,999.99 CAD equivalent.
    • ATM withdrawals: Free CIBC ATM withdrawals within Canada and one free ATM withdrawal outside of Canada per month. The daily (24-hour) maximum ATM withdrawal limit is $2,000 CAD equivalent.
    • Reload methods: To load funds onto your card, use your mobile app or sign onto your account at acconversion.cibc.com. The website also works on your phone or tablet on the go. The maximum load amount for a single transaction is $2,999.99 CAD equivalent.
    • Rewards: Earn 1% cash back on all of your purchases, less returns and credits in the currency in which the purchase was made, through October 31, 2022.
    • Lock in a great exchange rate each time you load. That means you don’t have to worry about exchange rate fluctuations. Plus, there’s no extra conversion fee.
    • Shop with foreign currency on global e-commerce sites.
    • Manage your funds from the palm of your hand with the AC conversion App. Reload as you go so you never run out of currency on your trip. Check your balance, keep track of your spending, transfer money from one currency to another, and retrieve your PIN.
    • Protected by advanced chip and PIN technology to minimize fraud and theft. It also comes with Emergency Card Replacement Service, Emergency Cash Service and Protection from unauthorized use of cards or account information.
    • Sign up for your card online or at a CIBC Banking Centre in Pearson Airport. You don’t need to be a CIBC client to order a card. No credit check is required.

Best prepaid card for bonus rewards and money transfers

STACK Prepaid Mastercard

  • Annual Fee
    $0
  • Rewards Rate
    Varies
  • Minimum Deposit
    $0
  • Maximum Deposit
    $20,000
  • Intro Offer
    N/A
  • Our Take
    Why we like it

    STACK pairs a prepaid reloadable Mastercard with a financially savvy app to help cardholders make smart budgeting decisions, transfer money, and earn rewards on everyday purchases.

    Pros
    • Get 20% cash back on select hotels when you book your trip with STACK Travel while using your STACK prepaid Mastercard.
    • Manage your money in the STACK app, which includes automated savings tools, a Financial IQ feature to analyze your spending habits, early paycheque, receipt captures, and more.


    Cons
    • As of February 1, 2022, STACK now charges a 2.5% foreign exchange fee. This cost can be partially reimbursed if you spend at least $350 per month.
    • You can’t withdraw more than $2,000 per month from an ATM. Plus, STACK doesn’t have an ATM network of its own, so expect to pay fees when you do take out cash.
  • Product Details
    • General fees and features: No daily or monthly banking fees, reloading or peer-to-peer transfer fees.
    • Purchases: No fees for CAD purchases, and the maximum daily combined spend and cash withdrawal is $5,000. STACK charges a 2.5% Foreign Exchange Fee on all transactions in a foreign currency, and foreign currency transactions are subject to the Mastercard Conversion Rate and an administration fee of 2.5% on the amount of the transaction for each foreign currency transaction. STACK will reimburse eligible cardholders on Foreign Exchange Fees on up to $1,000 CAD of foreign spending outside of Canada, up to a total of $25 credited each month.
    • ATM withdrawals: STACK does not charge ATM fees, but you may be responsible for the fees levied by the ATM vendor. Only two ATM transactions per day are allowed, and the maximum amount per single ATM transaction is $500. The maximum monthly cumulative ATM amount is $2,000. Eligible cardholders are defined as those who spend a minimum of $350 CAD in purchases in a calendar month.
    • Reload methods: Add money to your card through Payroll Direct Load, an external bank account, Interac e-Transfer, cash load at participating Canada Post and select retailers, or free STACK-to-STACK Transfers.
    • Rewards: Earn instant cash back at over 140 retailers. Offers vary.
    • Earn money by referring your friends. You'll get: $5 for each of your first five referrals, $10 for each five after that, and $15 for each referral after that. Each person you refer will receive $5 for signing up!
    • Pay your bills directly through your STACK account, and use the Bill Split option to request funds from your contacts for a transaction you've already paid for using your STACK card.
    • Add both your physical and virtual STACK cards to Samsung Pay, Apple Pay, Google Pay, Garmin Pay or Fitbit Pay digital wallet.
    • Easily send funds to family and friends. STACK-to-STACK transfers are always free, fast, and secure.
    • Set a savings goal and STACK will automatically round each purchase to the next $1, $2, $5 or $10 and add it to your savings.
    • Set up payroll direct load with your STACK account and you could receive your pay cheque up to two days early.
    • Track your spending with the Financial IQ feature, which categorizes your weekly and monthly spending habits.
    • Enjoy Zero Liability Protection on all purchases and ATM transactions. That means you'll never be held accountable for unauthorized transactions made with your card. As it should be.
    • Freeze your account from the STACK app at any time, from anywhere in the world.
    • To be eligible, you must be a Canadian resident of the age of majority in the province or territory where you live.

Best environmentally-friendly prepaid card

MogoCard Prepaid Visa

  • Annual Fee
    $0
  • Rewards Rate
    1 tree planted + 50 satoshis
  • Minimum Deposit
    $0
  • Maximum Deposit
    $10,000
  • Intro Offer
    1,000 satoshis + 1 tree planted
  • Our Take
    Why we like it

    The MogoCard is a prepaid card with rewards that feel especially rewarding — every transaction you make plants one tree that will offset 550 lbs of CO2 over a 25-year period.

    Pros
    • A tree is planted every time you use the MogoCard, which helps support Mangrove tree planting projects in Kenya and Madagascar. One Mangrove tree absorbs 550 lbs of CO2 over a 25-year period, according to the company.
    • Earn Bitcoin or satoshis, the smallest original subunit of Bitcoin, after achieving certain milestones. Mogo says its tree planting projects offset more CO2 than the emissions created from mining Bitcoin on Mogo’s platform.


    Cons
    • You can only add Canadian funds to your MogoCard.
    • No free ATM withdrawals.
  • Product Details
    • General fees and features: No monthly fee, as long as you use your card once every 365 days. If you haven’t, a $1.99 monthly inactivity fee is charged.
    • Purchases: No transaction or point-of-sale fees in Canada but a 2.5% foreign exchange fee applies to purchases made outside of Canada. The maximum amount of purchases in any 24-hour period is $5,000, and the maximum amount of any one purchase is $3,000.
    • ATM withdrawals: You can withdraw as much as $500 in a single transaction. A maximum of $500 can be withdrawn in a 24-hour period. Cash withdrawals cost $1.50 in Canada and $3 overseas, plus any third-party ATM changes. You can withdraw as much as $500 in a single transaction, and a maximum of $500 can be withdrawn in a 24-hour period.
    • Reload methods: You can add money to your card by transferring money from your bank account with an Interac e-Transfer or via your bank ATM Visa Debit card. The maximum amount you can transfer to the card in any 24-hour period is $9,900.
    • Rewards: Every transaction earns you 50 satoshis and prompts Mogo to plan a tree to fight climate change. Mogo’s Rewards Program also offers certain Rewards to MogoMembers for achieving certain milestones or performing certain actions. For example, Mogo will issue 100 satoshis per purchase transaction made on an Eligible MogoMember’s MogoCard from April 18, 2022 onwards. See the terms and conditions online.
    • Add the MogoCard to your Samsung Pay, Apple Pay or Google Pay digital wallet.
    • Free monthly credit score monitoring and identity fraud protection.
    • Use the app to stay on top of your money with insights that help you make better spending choices. The app send you push notifications that recap your spending, rewards and your updated balance every time you use your MogoCard.
    • Manage how much you want to spend with automated weekly, bi-weekly, or monthly transfers that top up your card balance.
    • Create a spending goal to avoid overspending and build wealth. Mogo will recommend a daily budget to help you stay on target.
    • If your card is lost or stolen, you can instantly freeze it in the app and order a new one.
    • Your MogoCard is also protected from unauthorized use with Visa Zero Liability Policy.
    • To be eligible, you must be a Canadian resident of the age of majority in the province or territory where you live.

Best basic prepaid card for beginners

BMO Prepaid Mastercard®

  • Annual Fee
    $6.95
  • Rewards Rate
    N/A
  • Minimum Deposit
    $100
  • Maximum Deposit
    $10,000
  • Intro Offer
    N/A
  • Our Take
    Why we like it

    The BMO Prepaid Mastercard may not boast the flashy perks of its competitors, but it’s an uncomplicated reloadable prepaid card perfect for beginners who are just looking for something more secure than cash.

    Pros
    • Non-residents can open an account by applying at a BMO branch.
    • Straightforward and easy-to-understand — you won’t need to study the fine print to take advantage of a complicated rewards scheme.


    Cons
    • While marketed as a travel card, the BMO Prepaid Mastercard doesn’t offer many travel perks — foreign exchange fees aren’t waived and there’s no travel insurance, rewards or ability to hold multiple currencies.
  • Product Details
    • I20 General fees and features: $6.95 annual fee, $40 dishonoured payment charge, $3-$10 for card balance refund processing, and a $5 card inactivity fee after the card’s expiry date or until card balance has been reduced to $0.00.
    • Purchases: No transaction or point-of-sale fees in Canada but a 2.5% foreign exchange fee applies to foreign currency transactions.
    • ATM withdrawals: Use your prepaid credit card at any of the 30 million locations Mastercard is accepted, and get cash at over a million ATMs. Cash withdrawals will appear on your statement as a Cash Advance and are subject to a $5 cash advance fee.
    • Reload methods: Transfer funds from a BMO chequing or savings account to your BMO Prepaid Mastercard account through online or mobile banking. Or, load directly from any bank account from most financial institutions via bill payment through online banking, ATM, phone banking or at a branch.
    • Add the BMO Prepaid Mastercard to your Samsung Pay, Apple Pay or Google Pay digital wallet.
    • Make purchases anywhere Mastercard is accepted while receiving protection against unauthorized use — making the BMO Prepaid card safer than carrying cash.
    • Enjoy extended warranty and purchase protection.
    • Zero Liability safeguards you if there is any monetary loss resulting from fraudulent card use.
    • Mastercard Identity Check™ adds another layer of security to protect you when you shop online.
    • BMO Alerts help confirm that your transactions are really yours.
    • Can’t find your card? No worries, you can lock it, unlock it or report it lost or stolen at any time.
    • Log in to your mobile or online banking for free, 24/7 access to CreditView with no impact to your credit score.
    • Stay on top of your spending with a personalized look at your money.
    • To be eligible, you must be the age of majority in the province or territory where you live. In addition, you can’t have declared bankruptcy in the last 7 years. If you do not have a Canadian address, you can open your account by applying at a branch.
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Methodology to identify the best prepaid cards

NerdWallet Canada selected the best prepaid cards based on overall consumer value and their suitability for specific kinds of consumers.

Several factors weight our evaluation: 60% features specific to prepaid cards, 15% fees, 15% rewards, and 10% intro offer.

  • Features specific to prepaid cards include minimum and maximum deposit, maximum reload amount in any 24-hour period, ATM access, insurance benefits, digital wallet compatibility, and more.
  • Fees include annual fees, foreign exchange or conversion fees, and other fees.
  • Rewards value considers any earning rates, rewards structures, and other benefits.
  • The intro offer assesses any welcome bonuses, waived fees, referral programs, and other promotions for new customers.

Only reloadable prepaid cards that are available online were considered for this list.

Summary of the best prepaid cards

What to know about prepaid cards

By Barry Choi

Prepaid cards are an option between debit cards and credit cards — they are usually safer than using cash or debit but do not require you to borrow funds as you would with a traditional credit card.

What is a prepaid card?

A prepaid card is a form of payment where you load funds onto the card before you can use it to make purchases. How much money you load onto the card determines the total amount you can spend.

While most prepaid cards operate similarly, there are also different types of prepaid cards and they aren’t always referred to the same way. Commonly-used terms to describe prepaid cards include:

  • Prepaid debit cards
  • Prepaid credit card
  • Reloadable credit card
  • Pay-as-you-go credit card
  • Reloadable prepaid cards
  • Online prepaid card
  • Gift cards
  • Stored-value cards

Some names are more accurate than others, and each type of card has subtle differences that can affect how you may spend the money on the card.

What is a “prepaid credit card”?

You may have heard the term “prepaid credit card” to refer to reloadable payment cards.

However, since credit cards are technically a loan, the name “prepaid credit card” is inaccurate. A prepaid card does not borrow money that you’ll eventually pay back, as you would with one of Canada’s best credit cards. Instead, you can only spend funds loaded onto your prepaid card.

That’s why you don’t build your credit score with a typical prepaid card, even those that are called prepaid or reloadable credit cards. You’re not accessing credit, so there’s nothing to build, and issuers do not typically report your credit history and card usage to Canada’s credit bureaus.

Consumers and some prepaid card issuers often use “prepaid card” and “prepaid credit card” interchangeably, even though the two terms refer to different things. That’s not to say that providers send misleading messages about how to use prepaid cards — prepaid card providers are very clear about how they work.

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How do prepaid cards work?

Prepaid cards function similarly to debit cards in the sense that you can only spend money you already have. Prepaid cards can be used wherever Visa, Mastercard or American Express are accepted, but which credit card network you use depends on the card. For example, if you have a prepaid Visa card, you’d only be able to use it anywhere Visa is accepted.

There are two types of prepaid cards that you can purchase:

  1. A prepaid card that has a set amount already loaded, and
  2. A reloadable card that allows you to add additional funds.

In both cases, your spending limit is the amount you have currently stored on your card.

Another significant difference to consider is open-loop vs. closed-loop cards.

  • Closed-loop Canadian prepaid cards, more commonly referred to as gift cards, can only be used at select merchants or a network of merchants, like some store credit cards. For example, a Starbucks prepaid card is a closed-loop card because cardholders can only use it at Starbucks stores.
  • Open-loop prepaid cards are more flexible because cardholders can use them at any merchant as long as the merchant accepts the payment network (Visa, Mastercard or American Express) to which the prepaid card belongs.

How much does a prepaid card cost?

Closed-loop cards, such as gift cards and some online prepaid cards, generally have no fees: you’ll just need to buy them and pay for the amount loaded onto the card.

Open-loop cards, however, typically charge some sort of fee. Some may come with an activation fee, charge an annual or monthly fee regardless if you’ve used your card or not, or require you to pay a fee whenever you reload funds to the card. Usually, grocery stores and gas stations sell prepaid cards like these.

Some open-loop prepaid cards available online, such as KOHO and STACK, charge minimal fees — sometimes none at all. You would have to order a card directly online from one of these Canadian fintech companies. Once your card arrives, you can activate and load funds onto it. Some of these cards may charge a fee for premium options, but there’s almost no cost to use the standard features.

Important features

You’ll always want to find out the details and consider the different features that may appeal to you before purchasing a prepaid card.

The essential features to consider include:

  • Network used. Every prepaid card in Canada uses either the Visa, Mastercard or American Express networks. Since not every merchant accepts cards from every network, you’ll want to choose a network that works at most of the places you shop.
  • Fees charged. Some prepaid cards may have monthly fees and costs associated with activation and reloading funds. In addition, there may also be common credit card fees such as bill payment, foreign exchange and foreign ATM usage fees.
  • Fund limits. Many prepaid cards have a daily load, spending, cash withdrawal and transaction limits. Plus, there may be balance and point-of-sale limits affecting your spending ability.
  • Rewards earned. A few prepaid cards earn rewards, such as points or cash back. Some give you a flat percentage on all purchases or provide accelerated rates with specific merchants, while others, like the Wealthsimple Card and the MogoCard Prepaid Visa, may function like crypto credit cards and offer cryptocurrency as a reward.
  • Spending insights. Prepaid credit cards offered by online-only banks and fintech companies may give you spending insights to help you understand where your money is going. In addition, they may offer tools to boost your money management skills, such as round-ups, which will round up your purchases to $1, $2, $5, etc., and put the additional amount in a high-interest savings account.
  • Referral bonus. Some prepaid cards have a cash referral bonus when you sign up and load funds. In most cases, both the referrer and the referee get a reward.
  • Direct deposit. A few prepaid cards allow you to set up direct deposits to have payments, like your paycheque, sent right to your prepaid card.
  • Payment options. Generally, you can use prepaid cards to make online and in-store purchases. Some also let you pay bills, use foreign currencies, send Interac e-Transfers or send money directly to other users as you would with a mobile payment app.
  • Load options. Every prepaid card has different load options. The most common way to load funds is online with an e-Transfer, but some cards allow you to load via credit cards or even in-person at participating retailers, such as grocery stores, gas stations or drug stores.
  • ATM access. If you need access to cash, you can use some prepaid cards to withdraw funds from any ATM. Note that fees would likely apply.
  • Security features. Some prepaid cards have enhanced security features like chip and PIN and the ability to freeze your card. That said, gift cards typically do not have any security features, so you’re out of luck if you lose one.
  • Insurance. Some Canada Deposit Insurance Corporation (CDIC) member institutions issue prepaid cards, which means eligible deposits are insured for up to $100,000. However, most prepaid cards, including those typically bought in gas stations, drug stores and grocery stores, don’t offer any insurance. You’ll usually have to buy your prepaid card from a federally regulated fintech company or bank to get insurance and security features (like fraud protection).
  • Additional perks. Fintech prepaid cards typically have a virtual card (usually available in the app), so you don’t need to carry your physical card. Some are compatible with digital wallets, like Google Pay.

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Different types of prepaid cards

There are different types of prepaid cards available, so you’ll want to know your options and how they work.

Prepaid Mastercards

Prepaid Mastercards can be used everywhere Mastercard is accepted, including No Frills and Costco, which does not accept Visa and American Express for in-store purchases.

Prepaid Visa Cards

You can use prepaid Visa cards can be used anywhere Visa is accepted. In addition, a prepaid Visa gift card may be your best bet if you’re looking for a quick gift if you’re in a rush, as they are sold at many retailers, and the person receiving the gift will have no problem spending the card.

Prepaid Amex Cards

American Express has prepaid gift cards that come in set amounts. You can only use them at merchants that accept American Express.

Prepaid travel cards

Prepaid travel cards typically refer to reloadable cards that may hold multiple foreign currencies or offer travel perks, like those offered by the best travel credit cards in Canada. The advantage of a card with multiple currencies is that you know the exchange rate upfront, and you don’t need to carry different physical currencies. Some also allow you to withdraw funds at foreign ATMs or have limited foreign transaction fees.

Prepaid gift cards

Prepaid gift cards are available both for a specific merchant or a network of retailers and as a general Visa, Mastercard or American Express card that can be used anywhere. These cards, such as the Vanilla Prepaid Mastercard and Vanilla Prepaid Visa, are usually not reloadable.
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Where to buy prepaid cards

You can purchase prepaid cards in a store or order them online. They do not typically require a formal application or credit inquiry.

In stores

Grocery stores, drug stores and gas stations carry a variety of prepaid cards. These cards typically come preloaded with a set amount of funds. You can also purchase gift cards with various amounts directly from the retailer.

Online

If you’re looking for a reloadable prepaid card with more features, such as rewards and spending insights, you’ll need to apply for one online. They get shipped right to your address, so there’s little effort on your end.

From a bank

A few banks and credit unions still offer prepaid cards, but they’re becoming less common. That said, a few banks do offer prepaid travel cards that allow you to store different currencies.

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How to use a prepaid card

While prepaid cards are similar to debit and offer the convenience of credit cards, you should be aware of a few of their quirks.

Ways to use a prepaid card

With prepaid cards, you would either swipe or enter your card when prompted to pay at a physical terminal. If you’re shopping online, you will enter your card information, such as the card’s number.

For those looking to send money via a prepaid card, you would use one of the options available with some card issuers, such as e-Transfers.

How to activate your prepaid card

Most prepaid cards are activated as soon as you load funds. Though, some cards may require you to register before activation.

How to check your card’s balance

Some prepaid cards have a website where you can check your balance. Others have an app.

How to reload a prepaid card

You can typically add more funds to your reloadable prepaid card via the app, your online account or e-Transfer. A few cards let you reload your balance at select grocery stores, gas stations and drug stores. You may be able to transfer the balance of one gift card to another if they’re from the same merchant.

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Who should get a prepaid card?

Younger generations (ages 18 – 34) and unbanked Canadians are considered most likely to use prepaid cards, but this payment option is ideal for many people.

People who might benefit from getting a prepaid card include:

According to Payments Canada’s Canadian Payment Methods and Trends Report 2021 survey, more than 50% of people [1] used a prepaid card last month, and Canadian consumers report using this payment method for various reasons.

Top five drivers of prepaid card usage

Pros of prepaid cards

  • Unlikely to overspend. Unlike with a credit card, you can’t spend money you don’t have with a prepaid card because you have to load the card before using it.
  • Safer than cash. If you lose the money in your wallet, it’s usually gone forever. Some prepaid cards may allow you to recover your funds even if your card is lost.
  • Easy to reload. Reloads on prepaid cards can often be done in-store and online.

Cons of prepaid cards

  • No credit building. Since prepaid cards aren’t credit cards, your credit score won’t increase while using them unless the provider offers a credit-building program.
  • Limited rewards. While some prepaid cards give you cash back, you won’t get the attractive additional benefits that come with some credit cards, such as airport lounge access, travel insurance and mobile device insurance.
  • May charge fees. Some prepaid cards have activation and monthly fees that can quickly reduce your balance.

Alternatives to prepaid cards

  • Debit cards. They’re usually associated with either the Visa or Mastercard networks, and you can only spend what’s in your chequing account.
  • Traditional unsecured credit cards. You’ll be able to earn more rewards and build your credit history and score. However, unpaid balances can quickly lead to debt and a damaged credit score. See our picks for the best credit cards in Canada.
  • Secured credit cards. The limit on these cards is the same as the security deposit. The advantage here over prepaid cards is that secured cards can help you build your credit score. See our picks for the best secured cards in Canada.

» MORE: The best credit cards for bad credit

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