KOHO Prepaid Mastercard: A Comprehensive Guide for Canadians

The KOHO Prepaid Mastercard has become a popular choice for Canadians who want to combine the benefits of a credit card and a chequing account.

This card offers various perks, including cash-back rewards, budgeting tools, and financial flexibility, without the risk of debt that comes with traditional credit cards.

Whether you’re looking to manage your expenses better, build your credit score, or simply earn rewards, the KOHO Prepaid Mastercard is a convenient and modern solution.

This article will cover the company behind the card, its pros and cons, requirements, benefits for those with bad credit, the application process, and answer frequently asked questions.

About KOHO: The Company Behind the Card

KOHO Financial Inc. is a Canadian fintech company founded in 2014 with the goal of democratizing finance for Canadians.

Headquartered in Toronto, KOHO offers a range of digital financial services, including prepaid Mastercards, savings tools, and a mobile banking app that helps users manage their money more efficiently.

KOHO positions itself as a challenger to traditional banking, providing accessible financial services without the typical fees associated with large banks.

KOHO operates entirely online, which allows it to provide low-cost, efficient services to users across Canada. The company’s mission is to give Canadians more control over their money, help them avoid debt, and provide tools for smarter financial decisions. One of KOHO’s standout products is the KOHO Prepaid Mastercard, which acts as a hybrid between a credit card and a debit card, offering the best of both worlds.

What sets KOHO apart from other financial institutions is its focus on financial education. The KOHO mobile app includes budgeting tools, automatic savings features, and spending insights that help users track their financial habits. This aligns with the company’s commitment to promoting financial literacy and helping Canadians build healthier financial habits.

Pros and Cons of the KOHO Prepaid Mastercard

Pros:

1. Cash-Back Rewards: One of the biggest advantages of the KOHO Prepaid Mastercard is its cash-back rewards program. Users can earn 1% cash back on everyday purchases like groceries, gas, and restaurants. Additionally, KOHO offers up to 5% cash back at specific partner retailers, which can significantly increase savings for frequent shoppers.
2. No Credit Check Required: Unlike traditional credit cards, the KOHO Prepaid Mastercard does not require a credit check for approval. This makes it accessible to a wide range of users, including those with bad credit or no credit history at all.
3. No Annual Fees: The KOHO Prepaid Mastercard has no annual fees, monthly fees (in its basic plan), or hidden charges. This makes it a great option for people looking to manage their finances without worrying about ongoing costs. Users can enjoy all the card’s benefits without being hit with unexpected fees.

Cons:

1. Limited Cash-Back Categories: While the KOHO Prepaid Mastercard offers 1% cash back on everyday purchases, it does not provide the same breadth of rewards as some other prepaid or traditional credit cards. For instance, the card doesn’t offer high cash-back rates on specific categories like travel or entertainment unless you are shopping with KOHO partners.
2. No Credit Building (without Additional Subscription): Although KOHO offers a credit-building feature, it’s only available with an additional subscription fee. The basic prepaid card does not report to credit bureaus, meaning that users won’t improve their credit score by using the card unless they opt for the premium service.
3. Requires Preloading Funds: Since KOHO is a prepaid card, users must load money onto the card before making purchases. This can be seen as a limitation for individuals who are used to the “buy now, pay later” flexibility of traditional credit cards. However, it also prevents overspending, which can be a positive aspect for those who need help managing their budget.

Requirements for the KOHO Prepaid Mastercard

The KOHO Prepaid Mastercard is designed to be accessible to a wide range of Canadians. The basic requirements to apply for the card are minimal, making it a popular choice for many individuals, including those with limited credit histories.

1. Canadian Residency: You must be a resident of Canada to apply for the KOHO Prepaid Mastercard. KOHO is available nationwide, from British Columbia to Newfoundland and Labrador.
2. Age Requirement: Applicants must be the age of majority in their province or territory, which is either 18 or 19 years old, depending on where you live.
3. No Credit Check: Unlike many traditional credit cards, KOHO does not require a credit check as part of the application process, making it accessible to those with poor or no credit history.

KOHO Prepaid Mastercard for Bad Credit

One of the main selling points of the KOHO Prepaid Mastercard is its accessibility for individuals with bad credit or no credit history. Because KOHO does not perform a credit check during the application process, it is a viable option for those who have struggled with traditional credit cards in the past or who are looking to rebuild their credit.

Additionally, KOHO offers an optional credit-building feature for users who want to improve their credit score. For a small monthly fee, KOHO will report your credit usage to major credit bureaus, helping to improve your credit score over time. This feature makes KOHO a unique option for those who want to manage their finances responsibly while working toward better credit.

How to Apply for the KOHO Prepaid Mastercard

Applying for the KOHO Prepaid Mastercard is straightforward and can be done entirely online or through the KOHO mobile app. Here’s a breakdown of the steps involved in the process:

1. Download the KOHO App or Visit the Website: The first step is to download the KOHO app (available for iOS and Android) or visit the KOHO website. This is where you’ll create your account and begin the application process.
2. Sign Up and Provide Personal Information: You will need to provide some basic personal information, such as your name, address, and date of birth. Since KOHO does not require a credit check, the application process is quick and easy.
3. Verify Your Identity: KOHO will ask you to verify your identity by submitting a government-issued ID, such as a driver’s license or passport. This step ensures that your account is secure and that you are eligible to use the card.
4. Fund Your Card: Once your account is set up, you’ll need to preload money onto your KOHO Prepaid Mastercard. This can be done via e-Transfer, direct deposit, or linking your bank account. After funding your card, you’re ready to start using it for purchases.
5. Activate Your Card: After receiving your physical card in the mail, activate it through the KOHO app to start using it for both online and in-store purchases.

Conclusion

The KOHO Prepaid Mastercard is a flexible, fee-free option for Canadians looking to manage their finances while earning cash-back rewards. Its accessibility, no annual fee, and optional credit-building service make it an attractive choice for a wide range of users, particularly those with bad credit. With its easy-to-use mobile app, KOHO provides a modern, streamlined financial experience that stands out in the growing field of fintech solutions.

Frequently Asked Questions (FAQ)

Q: Can I use the KOHO Prepaid Mastercard to build credit?
A: Yes, KOHO offers an optional credit-building feature for a small monthly fee. This service reports your credit usage to credit bureaus, helping to improve your credit score over time.

Q: Are there any fees for using the KOHO Prepaid Mastercard?
A: The basic KOHO Prepaid Mastercard has no annual or monthly fees. However, if you opt for the KOHO Premium plan or the credit-building service, there will be additional charges.

Q: Where can I use the KOHO Prepaid Mastercard?
A: The KOHO Prepaid Mastercard can be used anywhere Mastercard is accepted, both in Canada and internationally. You can also earn cash back at specific KOHO partner retailers.

Q: How much cash back can I earn with the KOHO Prepaid Mastercard?
A: KOHO offers 1% cash back on everyday purchases such as groceries, gas, and dining. Additionally, you can earn up to 5% cash back when shopping at KOHO partner retailers.

Q: Is there a maximum amount of cash back I can accumulate?

A: No, there is no limit to how much cash back you can accumulate with the KOHO Prepaid Mastercard.

Q: Do I need a bank account to use KOHO?
A: No, you don’t need a traditional bank account to use KOHO. However, you can link a bank account to easily fund your KOHO card via e-Transfer or direct deposit.