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 Visa card and app that gives you real-time insights on your spending while helping you reach your financial goals by automating some of your savings.
I didn’t think much of KOHO when it was launched, but it’s grown on me since it acts like a chequing account but you can use it as a credit card. In addition, the customer service experience far exceeds any other credit card provider I’ve seen in Canada.
With KOHO, you can get an extra 1% in cash back for a total of 1.5% on all your purchases for the first 90 days when using the referral code CASHMONEY. That’s a pretty good way to get things started, but before you sign up, you’ll want to keep reading my KOHO review to find out how the card works and if it’s the right fit for you.
- No annual fee
- 1% cash back bonus for 90 days with CASHMONEY referral code
- 0.5% cash-back on all purchases
- 1.2% interest with KOHO Save when you have direct deposit set up (coming in late 2020)
- Automated savings goals
- Round up each purchase to the nearest $1, $5, or $10
- Real-time spending insights
- Free financial coaching with direct deposit set up
- Apple Pay compatible
KOHO is a prepaid Visa card so it can be used wherever Visa 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.
There are a limited amount of benefits that come with this no fee card, but that’s not a bad thing since wants to help you understand your spending. You’ll earn 0.5% in “power up” cash-back on all purchases you make which is impressive since this isn’t a credit card. Think of KOHO as a cash back credit card since that’s what it is.
As mentioned, if you use my referral code CASHMONEY, you’ll earn an extra 1% in cash back for a total of 1.5% on all purchases in the first 90days.
Every purchase you make can be rounded up to the nearest $1, $5, or $10. This microsavings 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 they’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.
For those of you who want to look like a millionaire, KOHO gives you the option to order a metal card for $159. That fee drops down to $50 if you make two referrals. I personally think this is a waste of money, but I do admit that having a metal card is pretty cool.
Besides the straight cash back you’re earning by using the card, KOHO also has Partner PowerUps where you can earn additional cash back. Some partners include:
- Baskin Robbins +5%
- Harvey’s +3%
- Hudson’s Bay +2%
- Kernels Popcorn +3%
- Pizza Pizza +3%
- Sunwing +3%
- Well.ca +1.5%
KOHO Premium benefits
- 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
- Higher “velocity” limits
- New card design
KOHO Premium also has 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 code CASHMONEY 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.
Price matching is great since you can actually have KOHO check to see if there was a better price available for your purchases. If they do indeed find a lower price than what you paid, you’ll get credited the difference.
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.
How KOHO works
With KOHO, you get a physical card that comes with a chip and PIN so your information stays secure.
To load funds onto your KOHO card, all you need to do is send an e-transfer or link your bank account to your card. Your money will show up and be ready for use shortly after. Since you can only spend what you have, you never need to worry about going into overdraft or paying high interest charges.
A lot of people take advantage of the saving goals since it automates your savings. Let’s say you’re saving up to buy a new jacket or a bike, you can set up a saving goal and monitor your process. For example, you could have KOHO move $1 (or any amount) every day. The idea is, once you reach your goal, you can go buy what you’ve been saving. This feature makes KOHO one of the best budgeting apps in Canada.
With the app (available on the App Store and GooglePlay), you’ll get instant notifications about your purchases and what categories you’re spending your money on. You can even create custom spending categories so you know exactly what you’ve spent money on.
Getting tips on your spending patterns relative to other KOHO users is another feature that may benefit you. For example, you may get a tip saying that coffee at McDonald’s is cheaper than Starbucks or a cable plan will cost you less with Rogers compared to say Bell. Those are just random examples to give you an idea of what kind of tips you’d get.
As you continue to use KOHO, you’ll get data on your spending patterns. It’ll show you your average spending for the day or week is. If the app sees that you’re spending above average, you’ll be alerted which will hopefully encourage you to spend less.
KOHO is one of the best student credit cards as it’ll teach you to be responsible with your money.
Is KOHO safe?
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.
For reference, the Canada Deposit Insurance Corporation covers deposits up to $100,000 in eligible accounts. Hopefully, you never exceed that amount when using KOHO.
Does KOHO affect my credit score?
This is arguably the only real negative thing about KOHO. Since the card is a prepaid credit card, it doesn’t affect your credit score.
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.
How KOHO compares to others
The closest thing KOHO has in competition is the STACK Mastercard. With STACK, there are no foreign exchange fees or ATM fees so it’s better for travel. KOHO is a better choice as an everyday card since you’ll earn a flat cash back rate on all your purchases.
I should note that STACK offers a $5 sign up bonus. If you wanted to see how they compare directly, I wrote a more detailed post about KOHO vs. STACK.
You could also argue that KOHO can be compared to a secured credit card from Capital One or Home Trust since they require security funds. This isn’t really a fair comparison since security funds on a secured card can’t be used to pay off your account balance. Secured cards are meant for people who want to improve their credit score whereas KOHO is a true prepaid card.
My KOHO review is positive. 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 earn an extra 1% in cash back for 90 days.