Can KOHO be used like a credit card? Here's what you should know

KOHO is often compared to a credit card, but the way it works is quite different. Rather than borrowing money, you load your own funds and spend them using a prepaid Mastercard. For people looking to avoid traditional credit cards, KOHO offers more control over spending and fewer fees.
The guide below explains how KOHO works and what features it offers for everyday spending in Canada and abroad. You’ll also learn about the Wise card and how it can help you save money when you travel abroad or when you pay in different currencies.

Wise: save on the foreign transaction fees

Is KOHO a credit card or a prepaid card?

KOHO is neither a debit card nor a credit card. It's a reloadable prepaid Mastercard, which means you spend money you've already added to your account rather than borrowing against a credit limit. There's no revolving balance and no purchase interest, since you're not using credit. In day-to-day use, KOHO feels closer to debit, but it runs on the Mastercard network¹, so it's accepted in many of the same places as a credit card.

How KOHO works: loading funds and spending

With KOHO, you load your own money into your account and spend it using a KOHO prepaid Mastercard anywhere Mastercard is accepted. You can add funds through options such as direct deposit or manual top-ups, with everything managed through the KOHO app. And because you're spending your own balance, transactions stop once the available funds run out.
KOHO can be used for everyday purchases like online shopping, subscriptions, and travel, and it also supports virtual cards for online payments, so you don't need to share your physical card details.

KOHO card features

Features are built around everyday spending, budgeting, and rewards. What you get depends on the plan you choose, but all KOHO accounts are managed through the app and designed to give you more visibility and control over your money.

KOHO's instant cashback rewards

Instant cashback is available on eligible purchases, with rates that vary by plan. All KOHO plans put cash back in your pocket, with cashback of up to 2%–3.5% on everyday spending.² Rewards are earned automatically when you spend, rather than being redeemed later.
Across its plans, KOHO pays cashback on common categories such as groceries, transportation, and food and drinks. Higher-tier plans offer increased cashback rates and additional perks, while Essential focuses on core spending categories. KOHO also offers boosted cashback of up to 6.5%² at select merchants, depending on availability and in-app offers.

Essential KOHO plan vs. other options

KOHO offers three main plans: Essential, Extra, and Everything. Plans start at 0 CAD per month², and there's a 30-day trial available so you can test the account before committing.
Essential is KOHO's entry-level plan and can be free if you set up a direct deposit or add at least 1,000 CAD per month.³ It includes cashback on everyday spending, interest on your full balance, unlimited transactions, free e-transfers, and access to KOHO's core app features.
The Extra and Everything plans come with monthly fees, but add more benefits on top of the basics. These include higher cashback rates, increased interest, and extra perks such as travel benefits, reduced credit-building fees, and additional support features.

Everyday spending with KOHO

For everyday purchases, the KOHO card works much like you'd expect. It supports contactless payments, tap-to-pay, and mobile wallets such as Apple Pay and Google Pay, so you can use either your physical card or virtual cards for online shopping and subscriptions.
The KOHO app also includes budgeting and spending insights that make it easier to see where your money goes, set savings goals, and round up purchases automatically. With unlimited transactions and real-time e-transfers included on all plans, KOHO is for day-to-day spending rather than just occasional use.

Comparing KOHO to credit cards

At checkout, prepaid cards like KOHO can look similar to traditional credit cards, but they work quite differently once you look past the surface. Those differences affect how you spend, whether you're borrowing money, and how much control you have over your balance. For many people, the decision comes down to choosing between access to credit or sticking to spending the money they already have.

KOHO vs. traditional credit cards: key differences

No interest charges and prepaid spending
With KOHO, you're not borrowing money. KOHO is a prepaid card, so you load funds first and spend from your available balance. There's no revolving credit balance and no purchase interest, unlike traditional credit cards, which charge interest if you carry a balance.

Spending limits vs credit limits
KOHO spending is limited by the amount of money in your account. Once your balance runs out, transactions stop. Traditional credit cards work differently, using a credit limit that lets you spend now and repay later, sometimes with interest.

Safety and fraud protection
KOHO uses the Mastercard network and includes in-app security tools that let you monitor transactions, manage your card, and lock it if needed. Traditional credit cards also offer fraud protection, but spending with prepaid funds can reduce the risk of overspending or carrying unexpected debt.

Building credit with KOHO and credit cards

Credit building works differently here than it does with a credit card. While a credit card builds credit through borrowing and repayment, KOHO offers a separate feature designed specifically for credit building.
KOHO Credit Builder
Credit Building is an optional feature designed to help you build or rebuild your credit history. When you sign up, you're given a 225 CAD credit line⁴ that reports your payment activity to Equifax. Rather than using this credit for everyday spending, you set a low utilization amount in the app and make consistent monthly payments, which are then reported to help build your credit history.
You don't need to put down a large upfront deposit, and there's no purchase interest to worry about. Because this feature isn't used like a regular credit card, it also doesn't affect your credit utilization in the same way. Credit Building is offered as a subscription, with lower pricing available depending on your KOHO plan, and you can cancel it at any time.
How this differs from a traditional credit card
Traditional credit cards build credit by letting you borrow money and repay it over time. Interest can apply if you carry a balance, and missed payments can quickly increase what you owe.
KOHO Credit Building works differently. It isn't a credit card and doesn't involve everyday borrowing. Instead, it focuses on making consistent, interest-free payments that are reported monthly, offering a more controlled way to build credit without the risk of high-interest debt.
KOHO vs credit cards

Fees and costs: a closer look at KOHO

Fees depend on the plan you choose and how you use your account. While the core prepaid card doesn't charge interest on spending, there are some monthly plan fees and usage-based costs to be aware of.
Monthly plan fees
KOHO offers three main plans.⁵ The Essential plan starts at 0 CAD per month and can remain free if you set up a direct deposit or add at least 1,000 CAD each month. Extra costs 12 CAD per month, while Everything costs 14.75 CAD per month. Higher-tier plans include increased cashback rates, higher interest on balances, travel perks, and discounts on add-ons like Credit Building.
Loading fees
You can add money to your KOHO account in several ways. When using the in-app Debit Card Load feature with a Visa Debit or Mastercard Debit, a 3 CAD fee applies to each load, unless you're an Everything plan member.⁶ Loads are typically processed in under a minute and have a maximum daily limit of 1,500 CAD.⁶
ATM fees
KOHO doesn't operate its own ATM network. Cash withdrawals are made using ATMs on the Mastercard Cirrus network, and most withdrawals may include an out-of-network ATM fee of around 2 CAD to 3 CAD charged by the ATM provider.⁷ Extra and Everything plan holders receive one free ATM withdrawal outside Canada each month, and international ATM fees may be reimbursed if you contact support.
Foreign transaction fees and overlimit charges
For purchases made outside Canada, KOHO charges a 1.5% foreign exchange fee⁸ on non-Canadian transactions. Extra and Everything plans waive this fee entirely.⁵ Because KOHO is prepaid, there are no overlimit fees and spending stops once your balance reaches zero, removing the risk of accidental overspending or interest charges tied to exceeding a credit limit.
KOHO plan comparison

Applying for your KOHO card

Opening an account is designed to be quick and fully online. There are no credit checks for the prepaid card, and approval is instant, which makes KOHO accessible if you're new to Canada or prefer a simpler setup than a traditional bank.

What you need to apply for a KOHO card

To apply for a KOHO account, you'll need to be a Canadian resident with valid identification and complete the verification process directly in the KOHO app before accessing all features. There's no requirement for an existing credit history and no upfront deposit to get started. Once approved, you'll get access to a virtual card right away.

Spend money in Canada and 140 other countries with the Wise card

While KOHO works well for everyday spending in Canada, the Wise card is designed for those who regularly spend, send, or receive money across borders. With the Wise card, you can hold and manage 40+ currencies in one account and spend in Canada and 150+ countries without needing separate cards.

The Wise card helps you spend like a local. You can spend from your main currency at the mid-market rate or convert your money to the local currency before spending, with no hidden costs.

What's more, you can get your virtual card right away or get your first physical card for free after you open a Wise account!

You can withdraw up to 350 CAD in 2 free withdrawals each month using the Wise card when you're abroad. After this, you are charged a small fee per withdrawal.

While Wise will not charge you for withdrawals within these limits, independent providers might charge you separate fees when you use their ATMs.

If you regularly move money internationally or want clearer pricing when spending abroad, the Wise card can complement or replace a prepaid spending card like KOHO.

How to apply online for a KOHO card

You can apply for a KOHO account directly through the KOHO website or mobile app. The process typically takes just a few minutes.
Step-by-step setup

1. Choose a KOHO plan that best suits your financial needs, starting from the Essential plan.
2. Create your account and complete verification in the app.
3. Get approval in minutes and access your virtual prepaid Mastercard immediately.
   After verification, your virtual card is ready to use for online and in-store purchases through mobile wallets like Apple Pay and Google Pay. You can manage your card, view transactions, and add funds directly in the KOHO app. If you want a physical card, you can order one in-app, and it will arrive by mail after verification within 10 days.⁹ Both the virtual and physical cards draw from the same balance but have separate card numbers for added security.

Is a KOHO card right for you?

If you want day-to-day spending without relying on credit, a KOHO card could be a good option. Designed for people who prefer using their own money, the card tracks spending in real time and avoids interest charges. Whether it's the right fit comes down to how you spend, whether you need access to credit, and how much you value features like cashback or credit building.

Pros and cons of using a KOHO card

Pros

• No purchase interest, since you're spending prepaid funds
• Instant approval with no traditional credit check
• Cashback on everyday categories like groceries and transportation
• Interest earned on your entire balance
• Built-in budgeting, spending insights, and savings tools in the app
• Optional Credit Building feature to help build or rebuild credit history
  Cons
• Not a credit card, so you don't get a borrowing limit by default
• Monthly plan fees apply for higher-tier plans
• Foreign transaction fees apply on the Essential plan
• ATM withdrawals may include out-of-network fees

Who should consider a KOHO card?

A KOHO prepaid Mastercard may be for you if you want more control over your spending or prefer to avoid taking on debt. It can also work well if you don't qualify for a traditional credit card, or if you're newer to Canada or rebuilding your credit
With cashback and app-based budgeting tools, KOHO suits people looking for a simple, everyday spending account. If you also spend or hold money in more than one currency, combining KOHO with a multi-currency card like Wise can give you extra flexibility for international use.

1. Is KOHO a credit card or debit card? – KOHO
2. Earn cash back rewards – KOHO
3. KOHO Essential – KOHO
4. How does Credit Building work? – KOHO Help Center
5. Open an account online – KOHO
6. Debit card loading – KOHO Help Center
7. Using ATMs with your KOHO card – KOHO Help Center
8. How much is the foreign exchange fee? – KOHO Help Center
9. Can I get a physical card? – KOHO Help Center
   Sources verified on 11 March 2026