Are you looking for a KOHO Review? KOHO has been around for a few years now and it has quickly become one of the most popular fintech companies in Canada. The concept is simple, KOHO is a reloadable Mastercard and app that allows you to make smarter financial decisions.
What makes them stand out is that you earn cash back on your purchases and interest on your deposits. This is unheard of for a prepaid credit card. The base cash back rate is 0.5%, and you’ll get $20 for free when you sign up with my referral link. Oh, KOHO is also free. Keep reading my KOHO review for all the details.
KOHO is a prepaid Mastercard so it can be used wherever Mastercard is accepted. By using KOHO, but you’ll only spend money that you have available. The card is directly tied to the app which shows you all the insights about your spending. What’s interesting is that you can have personal or joint accounts so this card could be good for couples who are just starting to merge their finances. The KOHO card is available to everyone in Canada, including residents of Quebec.
The benefits are surprisingly decent for a no fee, cashback card. You’ll earn 0.5% in “power up” cash-back on all purchases and you can earn interest on all funds in your spending and savings accounts. Think of KOHO as a cash back credit card and don’t forget you’ll get $20 for free when using my referral link or promo code.
Every purchase you make can be rounded up to the nearest $1, $5, or $10. That amount is then applied to your savings goal e.g. concert tickets, a new tv, a vacation etc. The idea is that you won’t notice this small transaction, but it’ll add up pretty quickly. You can set up as many savings goals as you want with an amount and KOHO will estimate how long it’ll take you to reach those goals. It’s basically teaching you delayed gratification.
Some people will use their KOHO account like a bank account since there is no monthly fee. You can deposit your paycheque directly and get cash via ATM withdrawals (fees apply). You can also load your account online via the KOHO app and send Interac e-transfers as needed.
Overall, KOHO is one of the best budgeting apps in Canada.
- Free for 30 days then $9 per month or $84 per year
- 2% Cash back on groceries, eating & drinking and transportation
- No foreign transaction fees
- Free financial coaching
- Price matching with participating merchants
- Higher “velocity” limits
- New card design
The KOHO Premium account is a subscription service that earns you additional benefits. The fee is $9 per month or $84 a year but it gives you 2% cash back on groceries, eating & drinking and transportation purchases. This increased cash back offer stacks with my referral link so you can earn a total of 3% cash back on those categories.
The additional KOHO Premium benefits are also impressive. I would argue the best feature is no foreign transaction fees. Many people don’t realize that most credit cards charge a fee of 2.5% (regular KOHO charges 1.5%) when making a purchase in any currency besides Canadian dollars. With KOHO premium, that fee is waived which makes it one of the best no foreign fee credit cards in Canada. For reference, if you don’t have the pre
You only get one free international ATM withdrawal per month which is a bit disappointing. There’s also no KOHO premium Card.
Price matching with KOHO premium may sound great, but it only applies to merchants that already have a price matching policy in place. In other words, not all your purchases qualify for this service.
The free financial coaching is also unique since you’ll basically be able to ask an expert about taxes, investing and more. Free financial coaching is also available to regular KOHO users who set up direct deposit.
KOHO pros and cons
There’s a lot to like about KOHO, but that doesn’t mean you should sign up right away (even though it’s free). It’s always a good idea to look at the drawbacks and to see if they’re a deal breaker for you. These are the pros and cons of KOHO.
- Cash back on purchases: It is extremely rare for prepaid cards to have a cash back feature and you can get up to 3% with KOHO.
- Interest earned on deposits: KOHO is the only prepaid credit card that pays you interest on your deposits.
- Focus on financial freedom: With roundups, saving goals, and financial coaching, KOHO wants to help you get better with your finances.
- Premium benefits come at a cost: Some of the better benefits including no foreign transaction fees and the credit building tool are only available with a premium account or paying an additional fee.
- No insurance benefits: You won’t get any travel, mobile device, or purchase insurance with this card.
How KOHO compares to others
The closest thing the KOHO Mastercard has in competition is the Wealthsimple Cash Card With Wealthsimple, there are no foreign exchange fees or ATM fees, so it’s better for travel. KOHO charges a 1.5% foreign exchange fee, but that’s waived completely if you have a premium account. KOHO is a better choice as an everyday card since you’ll earn a flat cash back rate on all your purchases and you’ll earn interest on your savings. Both KOHO and Wealthsimple offer 0.5% cash back, but KOHO allows you to earn interest in your account.
It’s also worth mentioning that both cards have a referral program. With KOHO, you get $20, Wealthsimple offers you $10. What’s also nice is that since both are prepaid credit cards, there’s no hit to your credit score from both credit bureaus when you apply.vBoth cards can be used like a debit card to get cash, but ATM withdrawal limits would apply.
Some people also like to compare KOHO to secured credit cards, but see them as two different products. A secured credit card requires you to deposit security funds and it helps you build your credit score immediately. You’d have to subscribe to KOHO credit building if you want to improve your credit score. KOHO also gives you cash back whereas secured credit cards don’t.
As you can tell from my KOHO review, I think KOHO is great. When the card first launched, it was innovative, and it’s added more features that benefit users. The ability to earn cash back on purchases and interest on deposits is incredible for a prepaid credit card. I’m hoping some of the bigger banks notice what KOHO has been doing and implement some of the features into their cards.
Frequently asked questions
Even after reading this KOHO review, you may still have a lot of questions. That’s understandable as you should be asking questions before you sign up for any credit card. Below are some of the most common questions I get asked about KOHO.
Is KOHO insured?
Since KOHO is partnered with Peoples Trust, a federally regulated and CDIC-insured bank, your money is safe if anything were to happen to KOHO. In a worst-case scenario (which is highly unlikely to happen), you’d be able to get your money back via Peoples Trust.
To be clear, KOHO itself is not insured by the Canada Deposit Insurance Corporation For reference, the Canada Deposit Insur. But since your funds are held with Peoples Trust, you more is safe. For reference, Corporation covers deposits up to $100,000 in eligible accounts. Hopefully, you never exceed that amount when using KOHO.
Note that KOHO also states on their website “As a user of the 1.2% earn interest feature, we’ll open an account for you with Canadian ShareOwner Investments Inc. (ShareOwner). ShareOwner is a member of the Investment Industry Regulatory Organization of Canada (IIROC).”
Since KOHO is part of the Mastercard network, you do have access to Mastercard’s zero Liability policy. That means if someone makes a fraudulent purchase with your card, you’d likely be reimbursed.
Does KOHO build credit?
Many people wonder does KOHO build credit? Since the card is a prepaid credit card, it doesn’t affect your credit score. This is arguably the only real negative thing about KOHO.
You’ll obviously want a good credit score if you ever want to get a loan in the future, so using KOHO exclusively for your credit needs is not a good idea.
You can definitely use it for most of your spending, but you’ll want at least one other credit card so you can build a credit history. One of the best no fee credit cards in Canada would be a good complement.
Is KOHO debit or credit?
KOHO is technically a credit card, but it has some debit features. When comes to making purchases, you can use KOHO wherever Mastercard is accepted. If you’re making an online purchase and it’s asking you if you want to pay via debit or credit card, you would choose credit.
You can withdraw money from your KOHO card at most ATMs. KOHO doesn’t charge you a fee for this, but the ATM that you’re using will likely charge you a convenience fee of $2-3 each time.
KOHO is also accepted at international ATMs, but you’d pay a foreign transaction fee when withdrawing cash.
Is KOHO legit?
My KOHO review is positive. There’s no doubt that KOHO is legit. Although the best travel credit cards in Canada offer a ton of benefits, KOHO is a great no fee, card/app that encourages Canadians to spend and save in one spot. You’ll never spend more money than you have and you’ll earn some cash-back rewards in the process. Sign up with my referral code CASHMONEY now to get $20 for free.