KOHO Prepaid Visa card review
The KOHO Prepaid Visa card offers similar services to traditional banking without many of the common fees – plus you'll earn 0.5% cash back on all eligible purchases.
Earn 0.5% cash back rewards with every eligible purchase, and up to 5% cash back with select merchants. Use promo code FINDERCODE and receive a $20 cash bonus into your KOHO balance once you make your first purchase within 30 days of signing up.
Cost per transaction
|Cost per transaction||$0|
|Special offer||refer a friend and both of you will each earn 1% extra PowerUps on every purchase for 90 days|
|Rewards||0.5% cash back rewards with every eligible purchase, and up to 5% cash back with select merchants|
|Extra features||upgrade to a metal card for $159.00|
|Go to site|
What is KOHO and how does it work?
KOHO offers 3 different prepaid credit cards: the prepaid card, a premium prepaid card and a joint prepaid card.
You load money onto your KOHO Prepaid Visa card and use it to buy things like you would use a debit card or a regular credit card. It’s a prepaid card, meaning you can only spend the funds you load onto it. The KOHO Visa card works like a debit card because you can’t spend money you don’t have.
When you use the KOHO card you are eligible to receive cash back rewards on most purchases.
How do I get started?
- Sign up for the app. You are required to provide some basic personal and financial information to sign up for your account. KOHO says for most users this takes “minutes”. You do not need to pass a credit check to get a KOHO Visa card. There is both an English and fully translated French version of the app.
- Load money. You can add money to your KOHO account via an e-Transfer from your bank, or your employer can send all or a portion of your pay cheque directly to KOHO via direct deposit.
- Get the card. The KOHO prepaid card comes in the mail after you sign up.
How much does using KOHO cost?
KOHO really wants you to know that it does not charge many of the fees associated with so-called “Big Banks” in Canada. Unlike what you have to pay for many other credit cards or bank accounts, KOHO‘s annual fee is $0. And you’re charged $0 transaction fees, as opposed to paying for every transaction over a predetermined minimum each month, like you do with many chequing accounts. KOHO has also partnered with Visa to access the Visa Plus ATM network to let you withdraw cash with your card. However, you may be charged a small fine, like $3, as an ATM out-of-network fee if you use other machines.
What are the benefits of using the KOHO prepaid Visa?
- Save on bank and credit card fees. This KOHO Visa can help you avoid fees common to banks and credit cards. KOHO allows you to pay bills, transfer money, shop online and take out money from an ATM. However, depending on your banking needs you may still have to maintain an account at a bank. In that case you would have to pay the fees associated with that institution.
- Save on interest. TransUnion reported at the end of 2019 that the average credit card balance in Canada was $4,2440 If you don’t pay your balance on time you can be hit with hefty interest charges. Because the KOHO Prepaid Visa card is not a credit card, you cannot spend money you don’t have. This means you don’t have to worry about running a balance and accumulating interest charges.
- Save on travel. You can use your KOHO Prepaid Visa card outside of Canada. KOHO charges a 1.5% fee on transactions in foreign currency. To compare, some Canadian banks and credit card companies charge a 2-3% fee for every purchase you make in foreign currency.
- Track and analyze spending. The KOHO app analyzes how you spend your money. The app divides your spending into categories and tracks how you measure up to your savings goals. While this feature may be handy, it may not appeal to those experienced and disciplined in the art of budgeting.
- Cash back Rewards. This KOHO card offers 0.5% cash back rewards with every eligible purchase, and up to 5% cash back with select merchants.
- Build savings. KOHO offers a round-up feature that lets you tack on a pre-set amount of money on every purchase that goes straight to your savings. Let’s say you choose a round-up amount of $2 – when you buy a $1.30 cup of coffee, an additional $1.70 is automatically moved to your savings account.
- Automated savings. To help reach your financial goals sooner, you can also set up your accounts to make automatic transfers to your savings. For example, you could set up an automatic transfer of $50.00 to your savings on the same day every month after you get payed.
- KOHO Early Payroll feature. Get instant access to no fee, no interest $100 paycheque advance with no impact on credit scores by setting up direct deposit to your KOHO account from your employer.
What to watch out for
- Not a bank. You can’t visit a branch in person and KOHO doesn’t provide all the services of a major bank.
- Doesn’t help your credit score. Using a prepaid card doesn’t help you build your credit and you have to keep re-loading funds in order to use the card. Check other credit cards that are designed to help you build credit here.
Compare other KOHO prepaid cards
KOHO‘s main selling point is that it doesn’t charge its customers like other financial institutions do, by charging a $0 annual fee and $0 transaction fees. They also offer lower fees on foreign transactions. KOHO gives cash back rewards for using its card. If you make a lot of transactions, KOHO‘s round-up and cash back features can help you save money.
That said, there are ways to avoid some of the fees KOHO says it helps you save – for example, maintaining a high balance in your chequing account or using a no-fee credit card. And KOHO provides many, but not all of, the services of major banks. For example, it does not offer RRSP, TFSA or RESP accounts. You also need to load the card regularly and manage your balance within the app.