Discover the finest Canadian credit cards that are easier to get than standard unsecured credit cards.
Key Comparisons
| KOHO Prepaid Mastercard | Neo Secured Card | |
| Estimated Credit Score | 300 | 560 |
| Annual Fees | $84 | N/A |
| Interest Rate | N/A | 19.99% |
| Insurance Coverage | Yes | Yes |
| Pros | 1. Get access to a free virtual prepaid Mastercard® that they can use for both online and in-store transactions. 2. RoundUps – round your purchases to the nearest $1, $2, $5, or $10 and stash away the extra. 3. For every purchase you make, you can create a one-time card number. If hackers gain access to your payment information, this can lower the chance of fraudulent charges on your account. 4. No NSF fees – instead, you’ll get a reminder that there aren’t enough funds to cover your purchase or the money is pulled from your savings account (called a “Savings Goal”). 5. Budget tracking and spending insights through the smartphone app. | 1. Get a 15% bonus cash back on your first purchase at most partners. 2. Earn an average 5% unlimited cash back at thousands of local and national Neo partners. Plus, earn at least 0.5% back across all purchases. 3. Low minimum balance requirement; you can open a Neo Secured Card account with as little as $50 (and as much as $10,000 if you desire a larger limit). 4. You can set your credit limit at whatever you’re comfortable with (between $50 and $10,000) as long as you make a deposit to match. |
| Cons | 1. Not accepted & issued everywhere because not all merchants are quite up-to-speed when it comes to the latest payment processing technology. 2. Foreign currency transactions come with a 1.5% fee unless you are a Premium user. 3. Can’t build a credit score without a special KOHO Credit Builder program that comes with a $7 fee. | 1. You’ll have to put down a lump sum deposit of between $50 and $10,000 to get access to credit on this account. 2. You won’t get basic insurance such as purchase protection or an extended warranty with this card. 3. You can only earn cashback when you shop with Neo partners, and local deals seem to be limited in certain Canadian cities. |
Key Benefits of KOHO Prepaid Mastercard
Reduced Bank and Credit Card Costs
Bank fees cost Canadians an average of $220 each year. The KOHO Prepaid Mastercard might help you avoid fees associated with banks and credit cards. It is a free spending and savings account for Canadians of all ages. You’ll be able to budget, spend, and save like a pro with KOHO prepaid Mastercard® and mobile app. It lets you pay bills, transfer money, shop online, and withdraw cash from an ATM. However, depending on your financial needs, you may still need to keep a bank account. In that situation, you’d have to pay the institution’s fees.
Cash Back Rewards
When you use your debit card, your traditional bank rarely rewards you. This means that, unless you bank with an online-only bank like Tangerine, the idea of collecting interest on your cheques, or, in the case of KOHO, getting cash-back rewards when using your “cash,” is unexpected. Every time you purchase, KOHO provides you a 0.5% cash-back incentive (aka PowerUps), which means you don’t need a credit card to receive loyalty rewards. You can earn up to 2% cash back if you sign up for KOHO Premium.
Automated Savings
The KOHO app allows you to create savings goals and track your progress toward them. For example, if you wish to save $1,500 for a 6-month vacation, the app will show you how much you need to save on a daily (weekly, monthly) basis and debit that amount every day until you reach your goal. Furthermore, KOHO supports one of the most effective money-saving tactics ever devised: the RoundUp! The KOHO app, like Mylo and Wealthsimple, allows you to save money by rounding up your purchases to the next $1, $5, or $10 and saving the difference.
Key Benefits of Neo Secured Card
Easy Approval
Have a low credit score or no credit history? The Neo Secured Card provides assured acceptance. They won’t even pull your credit (no hard inquiry), so you don’t have to worry about that. It’s simple to get authorized for a secured credit card, regardless of your income or credit history. The application process is simple, and you may start using your digital card right away while you wait for the physical one to be shipped to you.
Annual Fee and Cash Back Rewards
Secured credit cards can cost up to $120 per year. There are no monthly or annual fees for the Neo Secured Card. It is an unwritten law that secured credit cards do not offer rewards or any other incentive. Neo Financial charges by providing up to 5% in unlimited cash back when you spend at thousands of partner merchants. To make it worthwhile, they offer at least 1% cash back on all purchases, even if it means topping up your account. Shopping at partner stores and scanning for discounts in Neo’s mobile app are also simple ways to earn rewards. Just keep in mind that you must secure your balance with a cash deposit and that this card does not provide basic insurance or extended benefits.
Low Minimum Balance Requirement
When you apply for a secured credit card, you must submit a collateral, also known as a security deposit. Generally, the minimum amount is between $300 and $500. The minimum security deposit for the Neo Secured credit card is $50. This implies that even if you are short on funds, you may begin boosting your credit score right immediately. If you close your account, you will receive this deposit back as long as your account is in good standing.But if you wish to have a larger limit, you can deposit up to $10,000.