Best Prepaid Credit Cards in Canada

The best prepaid credit card in Canada depends on what you need from the card.

Look for low fees, easy reloads, Visa or Mastercard acceptance and useful features such as cash back or savings interest.

Despite the common name, a prepaid credit card is not technically a credit card because you spend your own money rather than borrowing from a credit limit.

KOHO Prepaid Mastercard

KOHO Prepaid Mastercard is a strong prepaid card option for Canadians who want everyday spending features without a traditional credit card.

With KOHO Prepaid Mastercard, you can:

• Get instant approval with no credit check
• Spend only the money you load onto your account
• Pay no interest on purchases
• Earn up to 2% cash back
• Use your card for in-store purchases, online shopping and recurring payments

What Should You Look for in a Prepaid Card?

The best prepaid card should fit how you actually spend your money.

Consider:

• Monthly fees
• Activation or reload fees
• ATM withdrawal fees
• Cash back or rewards
• Where the card is accepted
• How easily you can load money
• Whether a virtual card is included
• Foreign transaction fees
• Mobile app features
• Fraud protection

How Do Prepaid Credit Cards Work?

You add money to the card before spending.

For example, if you load $500 onto a prepaid card, you generally have up to $500 available to spend.

When you make a $50 purchase, the money comes from your available balance rather than being borrowed from a lender.

What Are the Benefits of a Prepaid Card?

Prepaid cards can be useful if you want:

• Easier approval
• No credit check
• No credit card debt
• No purchase interest
• Better control over spending
• A card for online purchases
• An alternative to carrying cash

What Are the Downsides?

Prepaid cards also have limitations.

Depending on the card, you may encounter:

• Monthly fees
• ATM fees
• Reload fees
• Foreign transaction fees
• Spending or withdrawal limits
• Temporary holds at hotels or gas stations

Some merchants may also decline prepaid cards or place a temporary hold on part of your available balance.

Do Prepaid Cards Build Credit?

Usually not.

Normal prepaid card purchases do not involve borrowing money, so your everyday spending is generally not reported to the credit bureaus as credit activity.

If building credit is your main goal, consider a secured credit card or a dedicated credit building product instead.

Prepaid Card vs. Credit Card

A prepaid card uses money you already have.

A traditional credit card lets you borrow money up to a credit limit and repay it later.

With a prepaid card:

• You generally do not pay interest on purchases
• You cannot normally spend more than your available balance
• Approval can be easier
• Regular spending usually does not build credit

With a credit card:

• You borrow from the issuer
• Interest may apply if you carry a balance
• Your payment history can affect your credit score
• Approval may depend on income and credit history

Are Prepaid Cards Safe?

Prepaid cards issued by regulated financial institutions have consumer protections.

Registered reloadable cards may also provide protection against certain unauthorized transactions if the card is lost or stolen.

Register your card where required and report a lost or stolen card quickly.

Can You Use a Prepaid Card Online?

Yes.

A prepaid Mastercard or Visa can generally be used for online purchases when the merchant accepts that network and supports prepaid cards.

Virtual prepaid cards can be particularly useful for:

• Online shopping
• Subscriptions
• Mobile apps
• Food delivery
• Digital wallets

Are Prepaid Cards Worth It?

A prepaid card can be worth considering if you want the convenience of card payments without taking on traditional credit card debt.

The best prepaid card should have reasonable fees, broad acceptance and benefits you will actually use.