You’ve got more freedom than ever when it comes to what you’re spending money on — and how you spend it! But with choice comes decisions: What’s the right vehicle for that purchasing power?
Every bank has multiple account types, and every credit card company has countless varieties of cards. (Well, maybe not countless, but close enough.)
And while it might not seem like a big deal, the account you pick now can stick for years. If you find an account you love, it’s a powerful tool to build toward financial independence. But choosing a credit card without the right foresight can mean months or years of degraded credit. That can impact everything from getting loans for home ownership to getting stuck with higher interest rates on credit cards.
That’s a lot to think about, but we think we’ve got a great solution. Prepaid Visa cards can offer a minimal-risk way to enter the world of digital banking. With KOHO, prepaid cards are backed by Visa, the most ubiquitous credit card network in the world, with more than 300 million cards in circulation. Let’s take a look at all the ways a prepaid Visa card with KOHO can be a great choice for your financial present and future.
"Prepaid Visa cards can offer a minimal-risk way to enter the world of digital banking."
1. Prepaid cards help manage your budget
First and foremost, a KOHO prepaid Visa is a way to put your money to work without racking up debt. The average Canadian currently holds nearly $73,000 of debt (really!). A prepaid card doesn’t accrue debt, but instead uses the money you already have.
And, with a service like KOHO, you’re able to use our app to automatically pay bills, set aside savings and track your spending on specific categories. This control sets you up to make smart budgeting decisions for the future without damaging your long-term credit.
2. Visa is everywhere you want to be
If you’re going to get a prepaid card, there’s no better option than Visa. Accepted by more than 44,000 retailers across Canada and most online retailers, Visa is the most expansive credit and debit card network in the world. By partnering with Visa, KOHO puts customer convenience above all; meaning that a KOHO prepaid Visa card gives you the maximum number of opportunities to spend at the restaurants, bars, and stores you love the most, across the globe.
3. Avoid NSF fees with a KOHO prepaid Visa
KOHO’s prepaid Visa cards don’t have non-sufficient fund (NSF) fees at all, which saves you from being charged penalties if your account is too low to make a purchase. With the average NSF fee at $45, that money can add up!
Instead, KOHO simply offers you a friendly notification if your account doesn’t have enough to cover a transaction and the transaction isn’t completed. No harm, no foul, no fee.
"If you’re going to get a prepaid card, there’s no better option than Visa."
4. Get your funds deposited directly
One of the most frustrating parts about working, especially if you’re a young person working a job for the first time, is not getting your paycheque when you need it. A majority of employers offer direct deposit of your paycheques.
A prepaid Visa card through KOHO can act as the recipient of those direct deposits, which puts the money in your pocket quicker.
5. Cleaner contactless payments
This seems sort of strange to consider, but the reality is that in these times, there is a real concern about the transmission of surface-borne pathogens. I know, this feels like a far-fetched consideration to make, but studies have shown that paper money can be hotbeds for bacteria, and many health guidelines are pivoting towards recommending contactless payments whenever possible.
6. Earn money on the money you spend
A prepaid Visa card with KOHO is a unique financial tool, because it encapsulates many of the benefits of a credit card with the low-risk nature of a debit card. With KOHO, you earn cash back on every spend. And we partner with eligible retailers for additional PowerUps as an incentive to shop there, which gives you even more money back. PowerUps are a special distinguishing factor from using a standard debit card that simply draws from the money in your chequing account without offering added incentives on purchases.
7. Consumer protections
A big reason why Visa is such a powerful player in the debit and credit card market is the consumer protections they offer to their customers.
Banks are built around a system of trust that your money is protected at all times. What’s great about KOHO is that we aren’t a traditional bank, but still offer the same levels of security to keep your finances and information safe.
"A prepaid Visa card with KOHO is a unique financial tool, because it encapsulates many of the benefits of a credit card with the low-risk nature of a debit card."
8. No long-term risk to credit
Credit cards are a big responsibility. In fact, the average Canadian owes around $8,600 in credit card bills at any given time. Failure to pay off credit cards on time can impact your credit score, which can make future loans a huge hurdle to clear.
A prepaid Visa card with KOHO doesn’t accrue any debt, so it eliminates any risk of long-term effect on your credit. By opting for a prepaid Visa card over a credit card, you live within your budget while building positive habits that will help your financial literacy in the long run.
9. Easy bill pay
Managing paying bills isn’t life’s most joyful task, but we can help streamline things a bit. A prepaid Visa card with KOHO affords you the opportunity to automate your bill payments, which takes a huge step out of the payment process.
In the past, you’d receive a bill in the mail and send a cheque back for the amount in question. These days, most major institutions will accept automatic bill pay linked to a bank account or a card number.
10. Doesn’t rely on a bank account
Most debit cards are tied to some bank-backed chequing account. Generally speaking, this fact isn’t a big deal; but dealing with bank customer service can be. Because banks are such large institutions, they offer countless services, and everyday customers can be left scratching their head when they need assistance.
A prepaid Visa card from KOHO offers many of the same services as a bank, but it’s streamlined to put the customer first. Instead of having countless departments dedicated to different products, KOHO makes managing your money easier than ever.
Why a prepaid Visa is right for you
The 10 benefits outlined above might not apply to everyone equally . But even small pros can compound over time, and that’s especially true for your finances. Prepaid Visa cards — especially with KOHO, though we’re a teensy bit biased — offer unparalleled freedom and flexibility without luring you into overspending.