KOHO Essential Prepaid Mastercard Review 2024: One of the Best Prepaid Cards In Canada

• KOHO Essential can be available to new users at $0* instead of $4 when they complete 1 of the 2 following qualifying actions:
  • Set up recurring direct deposit of your paycheque or government benefits
  • Ensure a total of $1,000 or more is deposited into your account each month
• Earn 1% cash back on groceries, eating & drinking, and transportation. Plus, up to 50% extra cashback from select merchants.
• Earn 5% interest on both your spending and savings account. Your funds will also be eligible for CDIC insurance. Interest rates are per year, calculated daily, paid monthly, and can change at any time without notice.
• Choose from one of four exciting card colours. Receive both a physical and virtual card.
• 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!
• Card Security – KOHO provides 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
• 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.

In the increasingly crowded market of prepaid credit cards, the $4 per month or $48 per year KOHO Essential Prepaid Mastercard makes a bold statement with its plethora of perks and rewards. It definitely isn’t your typical prepaid card. It’s a budget-friendly blend of features and benefits that often only come with either conventional credit cards or smart fintech solutions—rarely both and never without a high price tag.

First, the KOHO Essential Prepaid Mastercard’s reward structure is designed to offer you maximum bang for your buck. You can earn 1% cash back on groceries, eats and drinks and transportation services with a KOHO Essential plan, and up to 5% cash back with KOHO’s partner merchants. So, maximizing your rewards is simple with this prepaid card. And you don’t have to wait for your payout either—the cash-back rewards you earn are instantly credited to your KOHO Essential Prepaid Mastercard balance.

Another perk of KOHO Essential Prepaid Mastercard is the smart, feature-rich KOHO app that provides up-to-the-minute balance updates, helping you keep track of your spending and stay on top of your finances, all in real time. The KOHO app also features an automatic savings feature that sets aside a predetermined percentage of your purchases in a separate savings account.

Still, the KOHO Essential Prepaid Mastercard isn’t without its drawbacks. The card’s daily and monthly spending limits may be too restrictive for big spenders. Also, since it’s a prepaid card, KOHO Essential Prepaid Mastercard won’t help you build a credit history, unless you cough up $10 per month for a KOHO line of credit. Plus, international purchases are subject to a 1.5% foreign transaction fee, which might be a deal breaker if you’re a frequent traveller. However, it is worth noting that their FX fee is still below average, which is typically 2.5%.

But despite these minor setbacks, the KOHO Essential Prepaid Mastercard is an impressive addition to the prepaid card arena. It successfully bridges the gap between a conventional credit card and a prepaid card, offering a generous suite of rewards and perks usually reserved for premium credit cards—without the associated costs.

• Earn 1% cash back on all groceries, eating and drinking and transportation with a KOHO Essential Plan.
• Up to 5% extra cash back when shop with KOHO’s partner network.
• Pay only $4 a month or $48 per year with a KOHO Essential plan.
• Track your expenses in real-time via the KOHO mobile app

Earning rewards

Earning rewards with the KOHO Essential Prepaid Mastercard is as easy as using the card for all your everyday purchases.  You can earn 1% unlimited instant cash back on eats and drinks, groceries and transportation with a KOHO Essential plan. The rewards get even better when you shop with select KOHO partners. You can earn up to 5% cash back with KOHO’s network of partner retailers. All other purchases earn 0.25% cash back. 

Redeeming Rewards

Getting rewarded with the KOHO Essential Prepaid Mastercard is a no-brainer. As soon as you make a purchase with the card, your cash-back reward is instantly credited to your account. This way, you could enjoy your rewards immediately, which makes this prepaid card particularly appealing.

Rewards Potential

The KOHO Essential Prepaid Mastercard holds its own when it comes to reward potential. While 1% on groceries, eating and drinking and transportation are certainly appealing, the option to earn up to 5% cash back at select merchants is the little something extra that levels up KOHO’s rewards game. In comparison to some premium credit cards, though, the rewards potential might seem limited. Yet, for a prepaid card, KOHO Essential Prepaid Mastercard’s reward structure is pretty good with three paid plans to choose from.

• $0 in monthly fees. Ditch the monthly bank fees most Canadians face and pay no fees for services like Interac e-Transfers and domestic ATM withdrawals.
• Cash back up to 5%. Earn up to 5% cash-back on eligible purchases with KOHO’s network of partners on any plan (Essential, Extra and Everything).
• Savings made easy. Use the KOHO app’s “RoundUp” feature to add to your savings with each purchase.
• 5% savings rate. Earn up to 5% interest on your KOHO balance.
• Spending insights. Categorize your spending and compare it to other users.
• Do-it-all app. From payroll deposits to bill payments, the app covers it all. Plus, it offers in-app live chat support.
• Payment options. Add KOHO to your Apple Wallet and use the card with Google Pay.
• Refer & Earn. Refer friends to KOHO, and you both get a $20 bonus, up to $1,000 in total.

Interest Rates

• Regular APR Min: N/A
• Cash Advance APR: N/A
• Balance Transfer APR: N/A

Fees

• Cash Advance fee: N/A
• Balance Transfer fee: N/A
• Foreign Transaction Fee: 1.5% of the transaction amount
• Annual Fee: $4 per month or $48 per year for an Essential Plan
• Other fees: $10 card replacement fee and $2.50 ATM withdrawal fee

The KOHO Essential Prepaid Mastercard offers consistent cash back and interest, outperforming KOHO Extra Prepaid Mastercard on value-for-cost, losing to Neo Financial Mastercard on rewards flexibility, but winning against CIBC AC Conversion Visa Prepaid Card for everyday use.

KOHO Essential Prepaid Mastercard vs. KOHO Extra Prepaid Mastercard

KOHO Extra Prepaid Mastercard and KOHO Essential Prepaid Mastercard are cut from the same cloth, with both offering cash back, interest and built-in budgeting tools. However, the KOHO Extra card nudges out ahead. Despite its $84 annual fee (or $9 per month), it offers a more lucrative cash back of 1.5% on groceries, eating and drinking, and transportation and 0.25% cash back on everything else as well as the 5% interest rate on your balance. Plus, it has no foreign exchange fees and even includes one free international ATM withdrawal per month. 

KOHO Essential Prepaid Mastercard vs. Neo Financial Mastercard

The Neo Financial Mastercard has no annual fee and also offers cash-back rewards. The Neo Financial Mastercard edges out the KOHO Essential Prepaid Mastercard with its more flexible cash back program, where you can earn up to 5% back at KOHO network partners and redeem rewards on demand. Additionally, the Neo Financial Mastercard comes with a lucrative welcome bonus of 15% cash back on first purchases at participating partners, which KOHO lacks. That said, the Neo Financial Mastercard is a conventional credit card rather than a prepaid one. So, if your primary goal is maximizing cash back rewards with a conventional credit card, Neo Financial Mastercard may be the better option.

KOHO Essential Prepaid Mastercard vs. CIBC AC Conversion Visa Prepaid Card

The CIBC AC Conversion Visa Prepaid Card offers a no-annual-fee prepaid option, but serves different user needs than the KOHO Essential Prepaid Mastercard. The CIBC AC Conversion Visa excels at international purchases, offering competitive exchange rates on 10 different currencies without extra conversion fees. Its cash back offer, though, is available only for a limited time. The KOHO card, while not specifically travel-focused, earns you cash back on your purchases and interest on your balance—all the time. So, the KOHO card is a better everyday card for most people, but the CIBC card is the ideal choice for frequent travellers.

When determining a rating for individual credit cards, the Forbes Advisor Canada editorial team factors in an exhaustive list of data points. With this card, the scoring model used takes into account factors such as, but not limited to, rewards rates and categories, fees, welcome bonuses, and other benefits and features. Keep in mind, what may be best for some people might not be right for you. Conduct informed research before deciding which cards will best help you achieve your financial goals.

KOHO Essential Prepaid Mastercard is ideal for budget-conscious Canadians who want a low annual-fee card that earns cash-back rewards and interest. Plus, its RoundUp feature and budgeting tools are ideal for individuals keen on saving and tracking their expenses. Of course, if you’re looking for higher rewards potential, you might want to consider other options. The card’s cash-back rate for grocery, eating and drinking and transportation purchases is only 1%.

Related: Best credit cards from the big banks