Mastercard prepaid cards are becoming increasingly popular in Canada, offering a convenient and budget-friendly way to manage your finances. Unlike traditional credit cards, prepaid cards don’t require a credit check and allow you to spend only the money you load onto the card. This makes them a perfect choice for those who are building credit, want to avoid debt, or simply prefer a pay-as-you-go system.
This article explores the best Mastercard prepaid cards available in Canada for 2024, highlighting their features, benefits, fees, and alternatives.
Top contenders: Reloadable Mastercard Prepaid Cards with Rewarding Perks
Canada boasts a diverse selection of reloadable Mastercard prepaid cards, each catering to specific needs and preferences. Here’s a breakdown of the frontrunners:
- KOHO Prepaid Mastercard: This card stands out for its well-rounded features, including 1% cash back on groceries, restaurants, gas, and transportation purchases. It also offers a high-interest savings account on your balance and a free budgeting app to keep your finances on track.
Bonus perks include optional credit building features and Interac e-Transfers at a lower 1.5% FX fee (compared to the standard 2.5%). For those seeking to avoid monthly fees, setting up a recurring direct deposit waives all charges on the KOHO Essentials account. - EQ Bank Prepaid Mastercard: This card offers a compelling combination of cash-back rewards (0.50% on all purchases with no limits or categories), waived ATM fees in Canada, and zero FX fees on foreign transactions, potentially saving you up to 3% on international purchases.
Plus, you’ll earn interest on your card balance, and there are no monthly or annual fees. To get started, simply open a free EQ Bank Personal Account online, fund it, and request a card. - Neo Money Card: This card integrates with a free savings account, enticing users with up to 5% cash back at over 10,000 participating retailers across Canada. It goes beyond just cash back by offering interest on your card balance, a mobile app for expense tracking, and free e-transfers using the Neo Money account.
Unlimited transactions and bill payments further enhance its appeal. The standard Neo Money card is free, but a premium option with credit score monitoring, higher cashback rates, and purchase protection is available for $4.99 monthly.
Feature-Packed Prepaid Cards for Travellers
For frequent travelers, specific prepaid Mastercard cards cater to your globetrotting needs:
- BMO Prepaid Travel Mastercard: This card provides reloadable convenience similar to a credit card, ideal for managing travel expenses. You can reload it using your BMO Chequing or savings account or link it to other Canadian financial institutions.
While it boasts an extended warranty and purchase protection, it lacks cash-back rewards. The annual fee of $6.95 and additional charges like $5 for statement requests or cash advances, 2.50% FX fees, and a $5 monthly inactivity fee should be considered.
- Canada Post Cash Passport Prepaid Mastercard: This card holds multiple currencies, eliminating FX fees when you have a sufficient balance in the specific currency you’re spending in. It’s readily available for purchase at Canada Post offices for $15.
However, keep an eye out for other fees, including a 1.50% fee for use within Canada, a $2.80 monthly inactivity fee, $3 for loading funds, and variable ATM withdrawal fees depending on the currency. Transactions also incur a 3.25% foreign exchange fee, and there’s an $18 shortfall fee and a $20 cash-out fee.
Non-Reloadable Prepaid Cards: For One-Time Purchases
While reloadable cards reign supreme for ongoing use, non-reloadable prepaid cards serve a valuable purpose for specific purchases:
- Vanilla Prepaid Mastercard: Available in denominations of $25, $50, $100, and $200, these cards are perfect for one-time purchases. They can be acquired at various locations throughout Canada, including Walmart, Petro-Canada, London Drugs, Express Mart, Ultramar, and Best Buy.
While convenient, be aware of the activation fees ranging from $3.95 to $7.50 and the 2.50% FX fee for foreign transactions. Also, Vanilla prepaid cards are not accepted at gas stations and cannot be used for ATM withdrawals or pre-authorized billing.
Alternatives to Mastercard Prepaid Cards
If a Mastercard prepaid card isn’t your preference, here are some noteworthy alternatives:
- CIBC AC Conversion Card (Prepaid Visa): This card caters specifically to foreign currency needs. While CIBC discontinued issuing new cards in June 2024, existing cardholders can continue using their cards for purchases, payments, ATM withdrawals, and merchant returns until August 26, 2024. Funds remaining on the card after that date will be returned.
- Credit Cards for Easier Qualification: If building credit is your goal, consider these credit cards known for being easier to qualify for:
- Tangerine Money-Back Mastercard: This card offers a straightforward approach with 2% cash back on two categories (choose from three options: gas & groceries, entertainment, or furniture & home improvement) and 0.5% cash back on all other purchases.
Additional Considerations:
When choosing a prepaid Mastercard card, remember to factor in the following:
- Fees: Be mindful of monthly fees, annual fees, inactivity fees, FX fees, ATM withdrawal fees, and reload fees, as they can significantly impact the overall value of the card.
- Cash Back Rewards: Compare cash back percentages and categories to see which card aligns best with your spending habits.
- Reload Options: Consider how you’ll reload the card (e.g., direct deposit, Interac e-Transfer, bank transfer) and any associated fees.
- Spending Limits: Daily spending limits and ATM withdrawal limits may vary between cards.
- Customer Service: Accessibility and responsiveness of customer service can be crucial if you encounter issues.
By carefully evaluating these factors, you can select the Mastercard prepaid card that best complements your financial goals and lifestyle in 2024.