Top Cash Back Prepaid Cards in Canada for April 2024

Cash-back rewards are typically associated with credit cards, but prepaid cards are increasingly offering this perk as well. While not as common as credit card rewards programs, prepaid cards with cashback can be a great option for those who want to earn rewards without building credit or facing potential debt. This article explores some of the best cash-back prepaid cards available in Canada as of April 2024.

Understanding Cash Back Prepaid Cards

A cash-back prepaid card functions similarly to a standard prepaid card, but with the added benefit of earning rewards on your purchases. These rewards are typically a percentage of the amount you spend and are credited back to your account. Unlike credit cards, prepaid cards don’t offer a line of credit. You load money onto the card beforehand, and you can only spend what’s available.

Important Links
1. Best 10 No-Fee Chequing Accounts in Canada for 2024
2. Top Cash Back Credit Cards in Canada with No Fees for April 2024
3. Comparing Neo Financial and KOHO for 2024
4. Review of Neo Financial’s High-Interest Savings Account 2024

Benefits of Cash Back Prepaid Cards

  • No Credit Check Required: Unlike credit cards, you don’t need a good credit score to qualify for a cash-back prepaid card. This makes them a viable option for those with limited credit history or bad credit.
  • Avoid Debt: Since you’re spending your own money, there’s no risk of accumulating debt with a cash-back prepaid card. You can only spend what you’ve loaded onto the card.
  • Earn Rewards: Cash-back prepaid cards allow you to earn rewards on your everyday purchases, similar to credit cards. This can be a great way to save money over time.
  • Potential for Additional Features: Some cash-back prepaid cards come with additional features like budgeting tools, interest on your balance, and fee-free ATM withdrawals.

Downsides of Cash Back Prepaid Cards

  • Limited Credit Building: Unlike credit cards, using a cash-back prepaid card typically doesn’t help build your credit score. Exceptions exist, with some cards offering optional credit-building features.
  • Spending Limits: You’re limited to spending the funds loaded onto the card. Unlike credit cards, there’s no overdraft protection.
  • Potentially Lower Rewards: Cash-back rewards on prepaid cards might be lower compared to some credit cards.

Top Cash Back Prepaid Cards in Canada (April 2024)

Here’s a closer look at some of the best cash-back prepaid cards available in Canada:

  • KOHO Prepaid Mastercard:
    • Cash Back Rewards: Up to 5% cash back at select retailers, 1% on groceries, restaurants, gas, and transportation.
    • Annual Fee: $0
    • KOHO offers a free prepaid Mastercard with instant approval. You can earn cash-back rewards on various spending categories and access a budgeting app with free credit score monitoring. The card also boasts a lower foreign transaction fee (1.5%) compared to the standard fee.
  • EQ Bank Card:
    • Cash Back Rewards: 0.50% on all purchases made in Canada and abroad.
    • Annual Fee: $0
    • The EQ Bank Card is a free prepaid Mastercard linked to EQ Bank’s high-interest savings account. Cardholders earn cash back on all purchases and benefit from the savings account’s 2.50% interest rate. Additionally, the card waives ATM withdrawal and foreign transaction fees.
Top Cash Back Prepaid Cards in Canada for April 2024
  • KOHO Premium Prepaid Mastercard:
    • Cash Back Rewards: 2% on gas, public transit, and restaurant purchases; 0.50% on everything else (and up to 5% cash back at select stores).
    • Annual Fee: $84 ($9 per month)
    • This premium version of the KOHO card offers a flat-rate 2% cash back on specific spending categories and 0.50% back on others. It also includes perks like price matching, waived foreign transaction fees, financial coaching, and one free international ATM withdrawal per month. Users can enjoy a higher 5% savings interest rate on their balance.
  • Neo Money Mastercard:
    • Cash Back Rewards: 1% on gas and groceries; an average of 5% cash back at partner stores (over 10,000); minimum of 0.5% cashback.
    • Monthly Fee: $0 (or $4.99 for a Premium account with additional features)
    • The Neo Money card offers instant cash-back rewards at participating retailers. When combined with the Neo Money savings account, users earn interest on their card balance. The card also provides chequing features like Interac e-transfers and bill payments. A premium option offers additional perks like purchase security, higher cash-back rates, and credit score monitoring.
  • CIBC AC Conversion Visa Prepaid Card:
    • Cash Back Rewards: 1% cash back for a limited time.
    • The CIBC AC Conversion Card is a multi-currency prepaid card, making it ideal for frequent travelers. It can hold up to 10 different currencies, and for a limited time, cardholders earn 1% cash back on all purchases.
  • Wealthsimple Cash Card:
    • Cash Back Rewards: 1% on all purchases.
    • Annual Fee: $0
    • Offered by Wealthsimple, a leading Canadian investment platform, the Wealthsimple Cash Card is a reloadable prepaid card offering 1% cash back on all spending. The earned cashback can be used for purchases or invested in stocks or crypto through the Wealthsimple Trade App.

Choosing the Right Cash Back Prepaid Card for You

The best cash-back prepaid card for you depends on your individual spending habits and priorities. Here are some factors to consider:

  • Cash Back Rates: Compare the cash back rewards offered by different cards and see which aligns best with your spending categories.
  • Fees: While many cash-back prepaid cards are free, some have monthly or annual fees. Factor these fees into your decision.
  • Additional Features: Consider any bonus features offered by the card, such as budgeting tools, ATM fee waivers, or interest on your balance.
  • Spending Habits: Analyze your spending patterns to see which card offers the best rewards for your most frequent purchases.
Important Links
1. Top High-Interest Savings Accounts Across Canada for 2024
2. Ontario’s Top High-Interest Savings Accounts for 2024
3. Top Savings Accounts in Canada for April 2024
4. Reviewing the EQ Bank Mastercard: Get Cash Back and Avoid ATM Fees

Final Thoughts

Cash-back prepaid cards can be a valuable tool for earning rewards on your everyday spending without the risks associated with credit cards. By considering the factors mentioned above, you can choose the best card that aligns with your financial goals and spending habits. Remember, these cards typically don’t build credit scores, so keep that in mind if that’s a priority for you.

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