What is a Prepaid Credit Card?
You’re probably familiar with credit cards and debit cards, right? After all, they’re the most popular way to pay for things in Canada these days, now that the world has gone (almost) entirely cash-less. What you might not be familiar with is a prepaid credit card – and why they might be the best way to supercharge your financial game. Let’s dig in.
A prepaid credit card is sort of a hybrid of both credit cards and debit cards. They operate like a credit card – and work on credit card payment networks, such as Mastercard – but, unlike their more traditional counterparts, you use your own money when tapping a prepaid card (vs. credit when using a credit card). The benefit of a prepaid card vs. a debit card is that you can use your prepaid card, worldwide, wherever the credit card network cards, such as Mastercard, are accepted.
How Does a Joint Card Work?
How joint cards work is pretty simple. Two people open an account and are each given their own card for that account. That means they’ll both have access to the funds in the account and share the responsibilities of owning that account.
They operate similarly to regular accounts, in that they require funds to be deposited before they can be used for things such as online shopping or tapping at the grocery store.
The difference is that, with a regular account, more than one person has access to those funds. So, it’s important to have good communication with the other cardholder you share a joint card with. You’ll want to be transparent with how the cards will be used and agree upon how you’ll manage the money within it.
Before opening a joint account with someone, make sure to discuss what the account will be used for and how you plan to make sure there’s always enough money to cover your shared spending.
Who is it for?
Joint accounts are great for couples, families, and even business partners.
A joint prepaid card is a great way to handle shared finances. They allow two people – such as husband and wife, parent and child, or business partners – to access and use the funds in one shared account.
With joint cards, all account holders share equal responsibility for managing the account and its transactions. This can be advantageous for collaborative financial goals, such as family expenses or business operations.
Another advantage is that both cardholders in a joint account can see their shared financial activity. This can be helpful when managing a household’s expenses or, say, when a child goes off to school and a parent would like to help them financially.
With a joint account, you’ll only want to open one with someone you trust completely, since you and the other cardholder have access to shared funds. You’ll want to be wary of sharing a prepaid account with someone whose spending habits can get out of control.
Should You Get a Prepaid Joint Credit Card?
If you have someone you’re close with, and who you share expenses with, a joint prepaid card can be a great way to manage shared finances.
Some of the pros of a joint account include:
Shared access to funds
Transparency of spending
Easier expense sharing
Joint financial goal planning
Potentially lower fees
A great way to offer financial support
There are, however, some potential cons of a joint account. They include:
Less financial independence
Shared responsibility if one cardholder overspends
Potential conflict between cardholders
Potentially unequal contributions and spending
Only you can decide whether a prepaid joint card is right for you. Make sure to have a discussion with the person you plan on sharing it with to align on goals and responsibilities before opening an account together.
KOHO Options for Prepaid Credit Cards
KOHO offers both individual and joint prepaid cards. So, there’s likely an option for you. Both cards offer cash back, earned interest, and budgeting tools. They also give you access to Credit Building to help you build your credit and Cover, to make sure you’ve always got enough funds to cover your essentials.
For individual cards, KOHO offers four different subscription tiers, so there’s something for everyone. You can choose one based on your goals and how much you plan on using the card. You can compare them here.