Saving money

Prepaid Visa: Myths vs Reality

5 min read

Gaby Pilson

Let’s be real for a minute here: No one likes being in debt.

But rent, utilities, cell phone bills, food, and all those little daily expenses can add up super quickly, leaving you with a hefty sum to pay when your credit card statement hits your inbox each month.

Unfortunately, if you accidentally spent a bit more than you should’ve on a new smartphone or on a well deserved vacation, then your bank account will soon shed a silent tear in anticipation of the interest you’ll need to pay in the coming months.

Worry not - KOHO’s got your back.

With our prepaid Visa card, you don’t have to fret about spending more than you have or worry that you’re driving yourself into debt with your purchases. Instead, you can focus on saving money and making the most of your income so you can live your best life, debt-free.

There are a whole lot of misconceptions out there about prepaid Visas. So, it’s understandable if you’re a bit apprehensive about ditching your fee-filled credit card for a shiny new KOHO prepaid Visa and account.

Up next, we’ll tackle all your burning questions about KOHO’s prepaid Visa card and dispel any myths about this awesome money management and savings tool.

Myth 1: Prepaid Visas are the exact same thing as a debit card

Isn’t that just a debit card?

Nope, we’re not talking about debit cards. A prepaid Visa, or a pre-loaded payment card, is one of the best ways to manage your spending without driving yourself into massive credit card debt with your daily spending.

All of KOHO’s accounts come with a reloadable prepaid Visa card that helps you spend only within your means. You can also use your KOHO card to withdraw money at an ATM. So, yes, in that sense, prepaid cards are similar to debit cards, but, they’re not the same thing.

Our prepaid Visa isn’t a debit card, and that means it comes with some special perks. For example, you earn cash back on all your purchases. It’s also synced with your KOHO app so you can get real time stats and updates on your spending trends to help you reach your savings goals.

Have you ever seen a regular ol’ debit card do all of that? We didn’t think so.

"A prepaid Visa, or a pre-loaded payment card, is one of the best ways to manage your spending without driving yourself into massive credit card debt with your daily spending."

Myth 2: Prepaid Visas aren’t widely accepted

False! In fact, thanks to the KOHO card’s Visa co-branding, your prepaid card is accepted anywhere that takes Visa, which is pretty much anywhere in the world that takes plastic as a form of payment in lieu of cash.

You can even link your KOHO prepaid Visa to your smartphone for use as a virtual card with Apple, Google or Samsung pay. This means you can shop until you drop (within your spending budget, of course!) without ever getting up off the couch, or pulling out your card when tap pay is accepted.

Go ahead and use your KOHO card online, in-store, and wherever you like to shop, worry-free.

Myth 3: Prepaid Visa cards have lots of hidden fees

Not with KOHO, they don’t. With your KOHO account and prepaid Visa, there are no hidden fees. That’s right - zero, zilch.

Unlike other financial institutions and credit card issuers, we don’t get excited about charging hard working Canadians like yourself any unnecessary fees.

The only additional fees you’ll ever be charged when you use your KOHO prepaid Visa are foreign transactions and international ATM fees (which KOHO doesn’t profit from, we might add). But we’re totally upfront about this and we’ll never hide behind technical jargon and small-print loopholes to get money from you.

In fact, with KOHO Premium, which has no foreign transaction fee and one free international ATM withdrawal per month, you can almost completely avoid these extra charges altogether. That means more money in your pocket for saving and guilt-free spending.

Myth 4: You can overdraft your bank account with a prepaid Visa

Many people think that you can inadvertently overdraft your bank account and spend more than you have when using a prepaid Visa. But since your KOHO card is not a credit card and we don’t want you to end up in debt, we don’t let you overdraft on your account.

Plus, you have to manually load your KOHO card (or set up direct deposit of your paycheque or e-Transfer funds) using the app, so you can easily manage how much you have available to spend. This means that unlike a credit card, you can’t overspend and drive yourself into loads of consumer debt with a nice dash of interest on top.

Additionally, you can’t accidentally overdraft your account and wipe out all of your savings with your prepaid Visa. Since you can control precisely how much you make available on your KOHO card for spending at any given time, you’re always one step ahead of any impulse purchases.

We’re also not a fan of hidden charges, so we don’t charge you NSF (non-sufficient fund) fees if you accidentally try to spend beyond your means. Instead, we’ll just send you a nice, friendly reminder straight to your phone to let you know that you didn’t have enough money on your card to make that payment. It’s as simple as that.

"Since you can control precisely how much you make available on your KOHO card for spending at any given time, you’re always one step ahead of any impulse purchases."

Myth 5: Prepaid Visas are easy targets for thieves

We get it: The idea that you can load up some of your hard-earned cash onto your KOHO card only to have it stolen by someone that can then go on a nice spending spree with your money sounds scary, indeed.

Your KOHO prepaid Visa card is completely secure and is protected under Visa’s zero liability policy if someone makes unauthorized purchases on your dime. With your KOHO prepaid Visa, you’re protected from fraudulent charges and you can always chat with us in-app for technical support.

We even take your security a step further and make it super easy to protect your money if someone steals your card. If you think that someone stole your card or that your account has been compromised, you can quickly and easily lock your prepaid Visa on the KOHO app.

Unlike other banks and credit card companies, we don’t make you waste hours on the phone trying to get past those pesky automated answering machines just to freeze your card when a thief is out there spending your money. All you have to do is log into the app, toggle the lock feature on your card, and your money is instantly safe and secure.

The ultimate payment option for spending on a budget

Your KOHO prepaid Visa is so much more than a debit or credit card. It allows you to easily manage your spending and get free cash back on all of your daily expenses without pesky hidden charges.

When combined with the KOHO app, your prepaid Visa offers unparalleled protection from fraudulent charges and identity theft so you can shop confidently and securely. Plus, with a KOHO Premium account, your prepaid Visa can save you even more with extra cash back, free financial coaching, and zero foreign transaction fees.

What more could you want?

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The KOHO Visa* Prepaid card is issued by Peoples Trust Company pursuant to license by Visa Int. *Trademark of Visa Int., used under license. **These services are provided by Service Providers, including Visa, Peoples Trust Company and Galileo Processing. Learn more about your finances with Visa Practical Money Skills.