These prepaid stored-value cards aren't true "credit cards", even though they are Visas and Mastercards. They are, however, processed just like their credit card counterparts, and look just like them too.
Be sure to check out some of my other articles on Canadian prepaid cards, and alternatives for the typical prepaid card user:
- CIBC Has Launched Canada's First Debit Visa Card, which may be an
excellent option instead of a prepaid Visa or prepaid Mastercard.
- But watch out, CIBC's Advantage Debit Visa doesn't seem to work very well online yet.
- More and more prepaid Visa cards and Mastercards are coming out on the Canadian Market. Check out my 2012 Prepaid Card Recommendations here. (Still relevant, but slightly old 2011 Guide to The Top 5 Prepaid Mastercard and Visa Cards in Canada here)
- My article on Secured Credit Cards in Canada, including comparisons to prepaid cards, and how a secured card can help you build your credit rating is now ready for reading.
In theory, these cards should, but don't always, work everywhere. You may have to register an address with the cards online, even if nothing is being shipped. Companies can choose to reject all prepaid cards if they want to. The BMO reloadable prepaid card, which you have to apply for, and is registered with your name/address/etc should have no problem working everywhere, but it can still be an issue, so read some comments! In this article, I'll go over which ones are best.
Necessary Background Information on Prepaid Visa/Master Cards in Canada
- Good for Privacy, those that can't get a credit card, security (while doing online transactions)
- Often not accepted at hotels/motels/rentals (read for more details)
- Should not contribute to your credit rating. Some do check for identity verification, or because you could go into debt with non-instantly processed payments (Request your FREE Credit Reports at least YEARLY!)
- Not a bad way to carry money if you don't have a credit card while travelling
- Accepted most places where a Mastercard or Visa card are accepted
- Many of the prepaid cards available, in a word, suck. Watch out for monthly fees&what happens to expiring balances (sometimes they're lost entirely like with the RBC Prepaid Visa)
- The zero-liability policy that Visa and Mastercard have applies to these prepaid cards just like regular Visa and Mastercards.
- Reloadable cards always require ID and some kind of application process
- Non-Reloadable cards are usually more anonymous, but pricier (probably for the convenience factor).
- Most cards on the market charge fees, usually to load up the card with money, but sometimes also to call and check your balance, inactivity fees, fees when you use it at an ATM, fees when you use it, fees when you don't use it, etc. So I'll go over which card is the best in common situations.
- Even though some cards are non-reloadable, you can make purchases with the remaining balance, and make up the rest of the payment in cash/debit/other credit card at most retail stores.
- Some cards, like the Vanilla card cannot be used at gas pumps, though you can pump and pay inside with them.
- Not CDIC Insured, so watch out for unknown/unheardof financial institutions
The Best Canadian Prepaid Mastercard and Visa Cards
BMO Prepaid Mastercard is Canada's Best Reloadable "Credit Card"
The BMO Mosaik Prepaid Travel Mastercard is the best choice for most people. Check out my (very) short and readable review of the card here. The card is $6.95/year and good for three years. The card can always be reloaded for free through on-line bill payment by anyone, or in-person at BMO, even with cash, if you're a BMO account holder. Expiry date is 36 months and there are NO charges for each purchase you make, nor with checking your balance online, through an ATM, over the phone or through an agent. So, the customer service is very good, and I think you can trust BMO. There is an inactivity fee if you go more than 12 months without using it. BMO also has a rather decent nationwide presence.
BMO actually charges you if you want a paper statement, so it is a good pseudo-anonymous card, since you will need to formally apply for the card and it'll have your name on it.
Some cards are available for an initial price of $2, but their monthly fees start after the 7th month of issuance, which isn't good for most people, so I won't go into those, but they are available from Vancity credit union.
Royal Bank Visa Gift Card (Best Card for Many Situations)
I've written a summary of the Royal Bank Visa Gift Card here, take a read!
You must buy these cards at an RBC branch, no forms are even required! The cards cost just $3.95 to buy and come in amounts of $25 to $500. Watch out though, if you still have a balance after 6 months, they start charging you $1.50 per month. If the card expires and you have money on it still, they charge a "fee" of whatever you have left, ie: you lose it. I believe these card do NOT have your name attached to them at the get-go, and they are not reloadable. You do have to show 2 pieces of ID to buy one however. I'm not sure to what degree they document your info (or just look at it to verify your age and let you go). You can register the card online so that it does have a name (and address I presume) attached to it and use it for online purchases though, or claim it lost/stolen.
RBC isn't forthcoming with what their expiry date is on their website, but rest assured, the cards do have an expiry date.
Vanilla Prepaid Mastercard - The Privacy-filled "Gift-box" Cards
These cards do NOT require you to sign up, so they're pretty much 100% anonymous (though things like what you use to pay for it and/or which computer you used to check your balance online might be trackable). You will still have to sign the actual card and sign receipts at merchants.
For good reason, they "recommend that you write down the Card number and the customer service number on a separate piece of paper in case the Card is lost or stolen."
The Vanilla Prepaid Mastercard Customer Service Number is 1-800-652-9174.
Shoppers Drug Mart sells the "Vanilla" Prepaid Mastercard, as do tons of other retailers. This is actually the People's Trust Mastercard, so it's really a product of a financial institution, not Shoppers themselves. They're not reloadable, and they start charging a monthly fee after 6 months. The initial cost is only $3-$6, but when the monthly fee kicks in, it's $2.50 per month, and the whole card expires after 12 months. Boo-urns!
Visa Prepaid Card Options
Citizens Bank offers a Prepaid Visa Gift Card.
They don't provide too much info on there website at https://www.citizensbank.ca/Personal/Products/VISACards/VISAGiftCard/ but their load fee is just $2, but then they nickel and dime you a bit. For an automated balance inquiry over the phone, they charge $0.50. I'm not sure of any monthly or inactivity fees, you'll have to call them at 1-800-611-8472.
Canadian Prepaid Visa Card&Prepaid Mastercard Conclusions
I think the BMO option is the cheapest and best prepaid option for those that want a cheap card for themselves with their name attached to it. Certainly, you should try applying for a real credit card if you can get one, such as the Studentawards Credit Card application here. Apply today! No annual fee beats monthly fees! For those that want a bit more anonymity and need a card now, without filling out an application and all that, the Royal Bank Visa Gift Card seems like the way to go, just make sure you spend your money quickly, or you'll start paying monthly fees. For most people, a real credit card is the best option, but it all depends on your circumstances. I'd say that dealing with your own regular credit card company will be easier to deal with than one of these prepaid cards if your card gets compromised, but for some things, these cards are a good option. I will say that internet credit card fraud is rather rare, and that you're usually also vulnerable when you shop at a regular retail store as well, since they often process transactions over the very same networks.