Prepaid, not credit
KOHO is not a credit card. There is no credit limit and no monthly bill. You transfer money into your KOHO account, by Interac e-Transfer or direct deposit, and spend from that balance. Because you cannot spend more than you have loaded, there is no debt risk and no credit check required to open an account. Essential is the free version of this, which makes it one of the lowest-barrier ways to get a reloadable Mastercard, earn a little cash back, and track your spending in an app. The trade-off is the same as any prepaid card: you manage the balance yourself, and merchants that require a credit hold, like hotels and car rental desks, may decline it.
KOHO plans
Essential is the free tier. The two paid plans raise the cash back rate, add interest on your balance, and waive the foreign transaction fee:
| Plan | Fee | Cash back | No FX fee |
|---|---|---|---|
| Essential | $0 | 1% on groceries, dining & transportation | No |
| Extra | $12 / mo | 1.5% on groceries, dining & transportation · 0.25% other | Yes |
| Everything | $14.75 / mo | 2% on groceries, dining & transportation · 0.5% other | Yes |
Essential earns cash back only in its three bonus categories. There is no base rate on everything else, where the paid plans add a small one. For a free account, 1% on groceries, dining, and transportation plus 2% interest on your balance is a genuine return at no cost.
Earn rates
| Category | Earn rate | Cash back per $100 |
|---|---|---|
| Groceries | 1% cash back | $1.00 |
| Dining and food delivery | 1% cash back | $1.00 |
| Transportation (transit, rideshare, gas) | 1% cash back | $1.00 |
| All other purchases | No cash back | — |
KOHO also runs rotating extra cash back offers at selected merchants in the app, which stack on top of the category rate. These vary and are not guaranteed, so they are a bonus rather than a reason to choose the plan.
What the earn math looks like
A cardholder spending $1,100 per month across the three bonus categories:
| Category | Monthly spend | Rate | Monthly cash back |
|---|---|---|---|
| Groceries | $600 | 1% | $6.00 |
| Dining and food delivery | $300 | 1% | $3.00 |
| Transportation | $200 | 1% | $2.00 |
| Total cash back | $1,100 | $11 / mo ($132 / yr) |
Because there is no fee, every dollar of cash back is net return. The 2% interest paid on your loaded balance adds to that, so a cardholder who keeps a few hundred dollars loaded earns a little more on top. The number is modest, but it costs nothing to hold.
Why Essential is not a travel card
Essential charges the standard foreign transaction fee on any purchase made in a non-Canadian currency. That is the one feature that separates it from KOHO's paid plans, and it is the feature that matters most abroad. A week of spending in another currency on Essential carries an FX cost on every transaction, which quickly outweighs the 1% cash back. If your reason for looking at KOHO is no-FX-fee travel spending, the Extra plan is the cheapest version that waives it, and Everything adds the highest cash back rate. Essential is best understood as a free, domestic, everyday card.
Other Essential features
| Feature | Details |
|---|---|
| Interest on balance | 2% interest paid on your entire KOHO balance, with no minimum and no separate savings account to open. |
| Unlimited e-Transfers | Send and receive Interac e-Transfers with no per-transfer fee. |
| Credit building | Optional paid add-on that reports payment history to Equifax, helping build or rebuild a credit score. Priced at full rate on Essential; discounted on the paid plans. |
| Instant spend notifications | Real-time push notification on every transaction. |
| Virtual card | Instant virtual Mastercard for online purchases before the physical card arrives. |
| Free credit score | Your credit score, viewable in the app at no cost. |
Good fit if
- You want a no-fee, no-credit-check reloadable Mastercard that still earns 1% cash back on everyday categories and pays interest on your balance.
- You are building or rebuilding credit, or you prefer to spend from a loaded balance rather than carry a credit card, and you do not want to pay a monthly fee to do it.
- Your spending is mostly domestic, so the foreign transaction fee on this plan rarely comes into play.
Less useful if
- You travel or shop in foreign currencies: Essential charges foreign transaction fees, and the Extra or Everything plans waive them.
- You want the highest cash back rate: the paid plans earn 1.5% to 2% on the same categories versus Essential's 1%.
- You rely on hotel check-in or car rental pre-authorizations: prepaid cards are frequently declined for credit holds even when you have the funds.