Stack and KOHO are Canadian fintech companies. Both offer an app and a prepaid credit card and advertise themselves as a way to reduce the fees associated with banking. Stack partners with Mastercard while KOHO has partnered with Visa.
Both KOHO and Stack offer a prepaid credit card. You can load money onto these cards via a bank account or directly from your employer. These are not real credit cards because you can only spend the money you load onto them. So in that sense, you are not receiving any credit to make purchases. These cards don’t cost anything to use, contrasting with banks that charge annual account fees or fees per transaction, and credit card companies that charge annual fees and high levels of interest on outstanding balances.
Features of each company
Stack
KOHO
Annual fees
None
None
Foreign currency fees
None
A percentage of the amount
Cash back
Varies by brand
Guaranteed minimum with each purchase
Discounts
Varies by brand
None
Round-ups
Yes
Yes
ATM withdrawals*
Yes
Yes
Referrals
You get a specified cash bonus when you refer a friend
Both you and your friend get a percentage cashback for set period of time following the referral
*You may have to pay out-of-network ATM fees with each card depending on what machine you use to withdraw cash.
Fees
It doesn’t cost anything to open an account with KOHO or Stack. You can load up to a maximum of $20,000 on both the KOHO and Stack cards and perform as many transactions as you want at a $0 cost. Stack charge a 0% fee for transactions in foreign currency, while KOHO charges 1.5%. Both companies allow you to use their cards at ATMs to withdraw money, though you may have to pay out-of-network fees depending on which terminals you use.
Round-ups
Both KOHO and Stack allow you to set savings goals and fund them by rounding up your purchases by a pre-set amount. For example, if you choose a $2 round-up amount, then a $1.80 cup of coffee will get rounded up to a $4.00 purchase, with $2.20 going toward your savings goal.
Customer support and technology
Both companies offer apps that track and analyze your spending habits. Both KOHO and Stack say that it takes only minutes to sign up and requires providing basic personal and financial information so they can confirm your identity. You use these apps to load money onto your prepaid cards. Stack has a real-time chat option on its website while KOHO has a chat function in-app that promises to get back to you within 24 hours.
So can I get rid of my bank account and use Stack or KOHO?
That really depends on your personal situation. There are ways to avoid bank and credit card fees without signing up for KOHO or Stack. For example, some banks waive annual fees and transaction charges for chequing accounts if you maintain a minimum balance. And it’s possible to get no-fee credit cards that come with only a few frills. Neither KOHO nor Stack offer RRSP, RESP or TFSA accounts, which can be important to a long-term savings plan. KOHO does plan to launch a high-interest savings account in 2020. KOHO lets you pay some bills and make electronic transfers with your account, but Stack is more limited in this area.
There is also the issue of time: using KOHO and Stack means introducing another app and another card into your life. You must also make sure you manage your balance by loading your prepaid card.
Bottom line
Stack and KOHO are very similar companies with essentially the same selling point: avoiding bank and credit card fees.
There are some small differences that might make one card more attractive than the other, depending on your personal situation. If you travel a lot then Stack might be a better fit, as it charges a 0% fee for foreign currency transactions. KOHO charges a relatively low 1.5% fee for all such transactions. Stack offers a combination of discounts and cash back with purchases at various partner brands, while KOHO offers 0.5% cash back rewards with every eligible purchase, and up to 5% cash back with select merchants. KOHO offers a few more of the features common to a bank, such as the ability to pay bills and send electronic transfers.
No, the Stack and KOHO cards are not credit cards. You can load money onto them from your bank account and then make purchases without worrying about the annual fees some credit cards charge or paying interest on your balance outstanding.
Nope. Neither Stack nor KOHO perform what’s called a “hard” credit check on applicants. That means the companies don’t see your credit score and the check itself won’t affect your credit score. Neither will using the Stack or the KOHO card.
No, these companies are not banks as they do not have the required licences. They do claim to offer the same level of security as Canadian banks in terms of data protection though. They partner with licensed Canadian banks to hold funds, meaning deposits are insured.
Both companies offer this feature. The difference between whatever you purchase and the amount you’ve selected to round up is set aside in separate savings accounts at both Stack and KOHO that you can “cash out” whenever you wish.
Grant Surridge is an editor at Finder, specializing in finance. He’s worked in journalism and communications for over a decade, his previous roles including business reporter at the National Post and online editor at Reuters. Grant has a Bachelor of Commerce from the University of Manitoba and a Journalism degree from the University of King’s College. Grant is a long-suffering fan of his beloved hometown Winnipeg Jets.
Call customer service to reactivate your credit card, but don’t expect your card provider to oblige.
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