A prepaid credit card, also known as a prepaid debit card, is a payment card that can be loaded with funds in advance. Unlike traditional credit cards, which allow you to borrow money up to a certain limit, prepaid credit cards require you to load funds onto the card before you can use it.

With a prepaid credit card, you can make purchases just like you would with a traditional credit card, as long as you have sufficient funds loaded onto the card. Once you’ve used up the funds on the card, you’ll need to reload it with more money in order to continue using it.

Prepaid credit cards are often used as a convenient alternative to cash or checks, and can be helpful for people who don’t have a traditional bank account or who want to stick to a specific budget. They can also be used to help control spending, as users are limited to the amount of funds they have loaded onto the card.

There are several prepaid credit cards available in Canada, each with its own features and benefits. Here are some of the best prepaid credit cards in Canada:

1. KOHO Prepaid Visa: This card allows you to earn cashback rewards on your purchases and offers budgeting tools to help you manage your spending.
2. STACK Prepaid Mastercard: With no annual fee, no foreign transaction fees, and cashback rewards on every purchase, the STACK Prepaid Mastercard is a popular choice among Canadians.
3. American Express Serve Card: This prepaid card offers free ATM withdrawals at over 30,000 MoneyPass ATMs across the U.S. and offers purchase protection on eligible purchases.
4. Canada Post Prepaid Reloadable Visa Card: This card offers low fees, free direct deposit, and free online account management.
5. Vanilla Prepaid Mastercard: This card is widely accepted and offers a simple and convenient way to make purchases and manage your spending.
6. CIBC Smart Prepaid Visa Card: This prepaid card allows you to earn rewards on your purchases and offers free reloads at CIBC banking centers and ATMs.
7. MyVanilla Prepaid Visa Card: This card offers a low monthly maintenance fee and cashback rewards on eligible purchases.
8. BMO Prepaid Travel Mastercard: This card is specifically designed for travelers and allows you to load multiple currencies onto the card, so you can avoid currency conversion fees.
9. Pay2Day Visa Prepaid Card: This card offers a low monthly fee and free reloads at Pay2Day stores across Canada.
10. The Meridian Visa Prepaid Card: This card offers a low monthly fee and allows you to earn rewards on your purchases.
11. Rogers Platinum Mastercard Prepaid Card: This card allows you to earn cashback rewards on your purchases and comes with no annual fee.
12. Scotia Prepaid Reloadable Visa Card: This card offers free online account management and a low monthly maintenance fee.
13. The Triangle Mastercard Prepaid Card: This card offers rewards on eligible purchases and comes with no annual fee.
14. TD Go Reloadable Prepaid Visa Card: This card is specifically designed for teenagers and allows parents to set spending limits and monitor their child’s spending.
15. Brim Prepaid Mastercard: This card allows you to earn rewards on your purchases and offers a number of other features, such as purchase protection and mobile device insurance.
16. Koho Premium Prepaid Visa: This card offers a variety of additional features, such as travel insurance and higher cashback rewards, for a higher monthly fee.
17. Brim World Elite Mastercard: This card offers premium benefits, such as airport lounge access and travel insurance, in addition to rewards on eligible purchases.
18. STACK Prepaid Business Mastercard: This card is designed for small business owners and allows you to track employee spending and set spending limits.
19. Western Union NetSpend Prepaid Mastercard: This card offers free direct deposit, online account management, and a mobile app for managing your card.
20. Payfare Visa Card: This card is specifically designed for gig workers and allows you to receive payments from various gig platforms, such as Uber and Lyft, directly onto your card.

Pros of Prepaid Credit Cards

Here are some of the pros of using prepaid credit cards:

1. No credit check required: Since prepaid credit cards are not tied to a credit line, you don’t need to undergo a credit check to get one. This makes them a good option for people who have poor credit or who don’t have a credit history.
2. Control spending: Prepaid credit cards can help you control your spending by limiting your purchases to the amount of money you have loaded onto the card. This can be especially helpful for people who want to avoid overspending or who are trying to stick to a specific budget.
3. Widely accepted: Prepaid credit cards are accepted at most retailers and online merchants, just like traditional credit cards.
4. No interest charges: Since you’re not borrowing money when you use a prepaid credit card, you don’t have to worry about paying interest charges or accumulating debt.
5. Convenient for travel: Prepaid credit cards can be a convenient option for travel, as they can be used internationally and often offer currency conversion services.
6. No overdraft fees: With a prepaid credit card, you can only spend what you have loaded onto the card, so you won’t incur overdraft fees or penalties.

Cons of Prepaid Credit Cards

Here are some of the cons of using prepaid credit cards:

1. Fees: Prepaid credit cards may come with fees, such as activation fees, monthly maintenance fees, reload fees, and transaction fees. These fees can add up and eat into the balance on your card.
2. Limited protection: Prepaid credit cards may not offer the same level of protection as traditional credit cards. For example, you may not be able to dispute a charge or receive the same level of fraud protection.
3. No credit-building benefits: Prepaid credit cards do not help you build credit since they are not tied to a credit line. If you’re looking to build or improve your credit, a prepaid credit card may not be the best option.
4. Reload limits: Prepaid credit cards often have reload limits, which means you may not be able to load more than a certain amount of money onto the card.
5. Limited rewards: While some prepaid credit cards offer rewards or cashback, these benefits are often less generous than those offered by traditional credit cards.
6. Inconvenient for large purchases: Since prepaid credit cards have a balance limit, they may not be the best option for making large purchases, such as buying a car or home.

Prepaid Credit Cards Facts

Here are some key facts about prepaid credit cards:

1. They require you to load money onto the card before you can use it. You can load money onto the card in various ways, such as through direct deposit, cash, or online transfer.
2. Prepaid credit cards do not require a credit check or a traditional bank account, making them accessible to people who may not have a credit history or who are unbanked.
3. Prepaid credit cards are accepted at most merchants that accept traditional credit cards, including online merchants.
4. Prepaid credit cards may come with fees, such as activation fees, monthly maintenance fees, transaction fees, and reload fees. Be sure to read the fee schedule carefully before choosing a card.
5. Prepaid credit cards may offer rewards or cashback on eligible purchases, but these benefits are often less generous than those offered by traditional credit cards.
6. Prepaid credit cards may have limitations, such as reload limits and spending limits, which can affect your ability to use the card for certain purchases.
7. Prepaid credit cards may not offer the same level of fraud protection or dispute resolution as traditional credit cards, so it’s important to read the card’s terms and conditions carefully.
8. Prepaid credit cards may be a good option for people who want to control their spending, avoid debt, or who are unable to obtain a traditional credit card or bank account.

Prepaid Credit Cards FAQs

Here are some frequently asked questions about prepaid credit cards:

1. How do prepaid credit cards work? Prepaid credit cards work by allowing you to load money onto the card before using it. You can use the card to make purchases or withdraw cash, up to the amount that you have loaded onto the card.
2. Are prepaid credit cards the same as debit cards? No, prepaid credit cards are not the same as debit cards. Prepaid credit cards are not linked to a bank account, while debit cards are. Prepaid credit cards require you to load money onto the card before using it, while debit cards allow you to spend money directly from your bank account.
3. Do prepaid credit cards help build credit? No, prepaid credit cards do not help build credit because they are not tied to a credit line. They are simply a way to make purchases using money that you have already loaded onto the card.
4. Are prepaid credit cards safe? Prepaid credit cards can be safe to use, but it’s important to read the card’s terms and conditions carefully. Make sure you understand any fees, limitations, or other factors that may affect your use of the card.
5. How do I load money onto a prepaid credit card? You can load money onto a prepaid credit card in various ways, such as through direct deposit, cash, or online transfer. The specific method may vary depending on the card issuer.
6. Can I use a prepaid credit card internationally? Yes, many prepaid credit cards can be used internationally. However, it’s important to check with the card issuer to see if there are any restrictions or additional fees for using the card outside of your home country.
7. What happens if I lose my prepaid credit card? If you lose your prepaid credit card, you should report it to the card issuer immediately. Many prepaid credit cards offer fraud protection, so you may be able to get a replacement card and recover any lost funds.
8. Can I get a refund on a prepaid credit card? Yes, if you return an item that you purchased using a prepaid credit card, the merchant may issue a refund to the card. However, it’s important to note that some prepaid credit cards may have restrictions on refunds or returns, so it’s important to check the card’s terms and conditions.
9. Can I use a prepaid credit card to pay bills? Yes, many prepaid credit cards can be used to pay bills, such as utility bills, rent, or other expenses. However, it’s important to check with the card issuer to see if there are any fees or restrictions on using the card for bill payments.
10. Are there age restrictions for using a prepaid credit card? Yes, some prepaid credit cards may have age restrictions. For example, some cards may only be available to individuals who are 18 years of age or older. Other cards may be available to younger individuals, but may require parental or guardian consent.
11. Can I reload my prepaid credit card online? Yes, many prepaid credit cards allow you to reload the card online through a website or mobile app. The specific method for reloading the card may vary depending on the card issuer.
12. How do I check the balance on my prepaid credit card? You can check the balance on your prepaid credit card by logging into your account online, using a mobile app, or by calling the card issuer’s customer service line. The specific method may vary depending on the card issuer.
13. Do prepaid credit cards expire? Yes, many prepaid credit cards have an expiration date. It’s important to check the card’s terms and conditions to see when the card will expire and what happens to any remaining funds on the card after it expires.
14. Can I use a prepaid credit card to withdraw cash from an ATM? Yes, many prepaid credit cards allow you to withdraw cash from an ATM, but may charge fees for doing so. The specific fees and limitations may vary depending on the card issuer.
15. Can I use a prepaid credit card to get cashback at a store? Some prepaid credit cards may allow you to get cashback at a store, but it’s important to check with the card issuer to see if this feature is available and if there are any fees or restrictions on doing so.
16. Can I use a prepaid credit card to make online purchases? Yes, many prepaid credit cards can be used to make online purchases. However, it’s important to check with the card issuer to see if there are any restrictions or fees for using the card online.
17. Are prepaid credit cards reloadable? Yes, many prepaid credit cards are reloadable, which means you can add more money to the card as needed. The specific method for reloading the card may vary depending on the card issuer.
18. How much money can I load onto a prepaid credit card? The amount of money you can load onto a prepaid credit card may vary depending on the card issuer. Some cards may have limits on how much you can load onto the card at one time or over a certain period of time.
19. Can I use a prepaid credit card to make recurring payments? Yes, many prepaid credit cards can be used to make recurring payments, such as for subscription services or recurring bills. However, it’s important to check with the card issuer to see if there are any fees or restrictions on doing so.
20. How do I cancel a prepaid credit card? To cancel a prepaid credit card, you should contact the card issuer’s customer service line. Some cards may have cancellation fees or other restrictions, so it’s important to check the card’s terms and conditions.