Financial management has significantly changed recently, with more people turning to modern solutions for their transactions and savings. In Canada, some people ditch traditional credit cards in order to avoid interest charges and getting into more debt. The solution to that is through prepaid cards and one that's gaining attention is the KOHO prepaid credit card.
Its growing popularity raises questions about what makes it stand out. In this article, we'll explore the features of the KOHO prepaid credit card and how it benefits its users. By the end, you'll have a clear understanding of how this card works and why it might be a good fit for you.
What is the KOHO prepaid credit card?
KOHO prepaid card is not a credit card in the true sense. Though it is named and regarded as a credit card you must pay attention to the fact that it is a ‘prepaid’ card which is a feature that traditional credit cards lack. A traditional credit card lends you money that you are liable to pay at the end of each month. It also allows you to resolve the credit by paying only the minimum amount due (at least) and carry the rest of the amount to the next month by paying interest charges. Hefty charges!
Unlike these traditional credit cards, you have to top-up or add money to the KOHO prepaid credit card to be able to use it. It resembles a spending account or debit account in this manner whereby you are using the money you already own and have put in your account. This way you won't be charged any interest as there is no money that you are technically borrowing from the credit card issuer.
You might be wondering why it is referred to as a credit card even though it technically isn't one. It is taken as a credit card because it offers all the perks and benefits associated with a credit card. With this prepaid credit card, you can enjoy perks such as cash back which are solely offered with credit cards. Due to these credit card-like features, this card is known as a KOHO prepaid credit card. Because although it is prepaid, it offers the benefits of a credit card.
In short, KOHO is a spending and savings account that comes with zero fees and hidden charges. It offers a simplified way to manage your expenses and spending habits.
How does the KOHO prepaid credit card work?
Opening and operating a KOHO account is quite simple. You can open your KOHO account by visiting their website. Afterward, to add money to your account, you can either ask your employer to transfer your paycheque directly into the KOHO account also known as direct deposit or you can E-Transfer your funds to the KOHO account. You can then use your KOHO card to purchase your desired products in-store or for online purchases just like you use any other credit card. The best part about KOHO is that its mobile application helps you to monitor your transactions, and saving habits and also allows you to draft a savings goal.
Where can you use a KOHO prepaid credit card?
The most pressing question is which vendors accept KOHO prepaid credit cards because if the vendors refuse to accept payment via KOHO then you are surely at a loss. Fortunately, you won't have to face acceptance issues with KOHO credit cards as they are widely accepted in Canada. Any vendor who accepts Mastercard also accepts KOHO prepaid credit cards. So, you can swipe your KOHO card anywhere you want and buy anything you desire without worrying about the acceptance criteria.
Is your money safe with KOHO?
Wondering where KOHO puts your money and if it is safe to put money in KOHO? Well, KOHO has a partnership contract with Peoples Trust which is a federally regulated bank and has legit standing. It means that users can put their money in KOHO without any doubt of bankruptcy if any issue happens with KOHO, still, then your money will remain safe with Peoples Trust. You will be able to get access to your money via Peoples Trust.
Key features of KOHO
You might already be impressed with the way KOHO works and keeps your money secure. But this is not only what it offers to the users. Many other features will excite you and will help you make an informed decision if you want to open your KOHO account or not. So, here are some key features that you must know about KOHO prepaid credit cards.
No interest charges
Similar to other prepaid cards, you won't be charged with any interest charges with a KOHO credit card. Since you will be using the money you already own and have put in the account there won't be any interest rate that is applicable on the monthly bill. This way you won't be subject to any debt accumulation like typical credit cards.
Instead of paying any interest charges, you can earn interest on the amount in your account. With KOHO easy subscription, you can earn 0.5% interest on the balance you have in your account.
KOHO allows you to earn cash back in various ways. From transportation services and grocery expenditures, you can earn 1% cash back. Whereas you can earn 0.5% cash back on all other sorts of purchases. In addition, KOHO offers you a list of selected merchants which allows you to earn 5% cash back. Cash back allows the users to enjoy some extra funds in their account.
Round-up purchase amount
KOHO allows you to round up the purchase amount to the nearest dollar amount whereby you can save the amount of difference. Such little treats surely excite the users.
No annual fee
KOHO prepaid credit card comes with no annual fee like some of the credit cards. This way you can enjoy using the KOHO card without having to worry about the annual fee which is an added expense. With no annual fee, you don’t lose even a dime by opening the account.
The best part is the KOHO app which is free for all users. This app allows you to keep a look at your transactions and the remaining balance. It is quite helpful when you know your financial standing. The KOHO team works round the clock to offer exceptional user experience to the KOHO users. They update the app every 3 weeks to offer more options and a user-friendly interface. They use extensive research to ensure that it is easy for the users to operate the app and align their saving goals and spending habits.
The app allows you to create “Saving goals”. This saving goal creates an automatic savings system whereby some of your money is automatically set aside in your savings. This way you can keep up with your savings goal as well as manage your monthly spending.
The app also allows you to maintain all account activities from paying bills to making deposits quite comfortably from anywhere you want. You can also get live support through live chat is available for users around the clock.
Foreign transaction fees
You are charged a 1.5% fee on international purchases.
If you chose the interest-bearing account then KOHO will offer you CDIC insurance whereby your money will be insured by Canada Deposit Insurance Corporation (CDIC).
Free ATM withdrawals
You can use your KOHO credit card to withdraw cash from any ATM just like you do with any other credit or debit card. The charges you will face in ATM withdrawals will be paid back by KOHO so you will enjoy the cash without having to pay any fees or additional charges. This free access to ATMs is a great feature that helps you to withdraw cash from any ATM in Canada. The daily withdrawal limit is $405 and a monthly limit of $60,000 which is quite generous.
Chance to build credit history
Unlike other prepaid cards, the KOHO prepaid credit card allows you to build credit history. To do so, you need to subscribe to the ‘credit building’ option that you can choose from the KOHO app. This subscription will cost you a fee of %10 per month but it is truly worth it. It allows you to create your credit history in 6 months by reporting your account activity to the credit bureaus in Canada (Equifax and TransUnion). Credit history is an important financial aspect in Canada that can help you in financial dealings and credit-seeking activities in the future.
You can enjoy e-transfers free of cost without any transaction costs that you might bear on some of the credit cards. The standard daily inbound limit of $5000 and outbound limit of $3000 apply.