Have you ever looked at your debit card and thought, “You know, I wish this thing was more like a credit card, but without the debt.”?
If you have, well, it turns out you're not alone. There are a handful of companies now looking to fill this exact gap in the market, and one of the big players in Canada is called KOHO.
In this in-depth KOHO review, I'm going to break down what Koho is all about, how it works, who it's made for, and more.
If you've been debating getting a Koho card for a while now, read through this review before diving in.
KOHO Review Overview
- Customer service
If you're a Canadian looking for a prepaid reloadable Visa card, KOHO is a good choice. The free plan is generous, the KOHO app has a ton of nice extra features to help you manage your money, customer service is quick and helpful, and the only fees you have to worry about are foreign transaction fees and a 13-month inactivity fee (which is easy to avoid).
- Great customer service
- Minimal fees
- Good app design and functionality
- Quick deposits + multiple ways to fund your account
- Unlimited free e-transfers
- Good purchase detection
- Multiple features that encourage saving
- Doesn't help improve credit score
- Only available in Canada
- Can't handle every transaction
- FX fees for free users
Heads up: This Koho review is really long and in-depth. Use the table of contents below to skip to different parts.
What is Koho?
Koho is a financial app thought up by Daniel Eberhard, who launched Koho in 2014. His goal? To challenge traditional banking by making things simpler and more affordable.
Told you it was weird. Let's move on…
Who Can Use Koho?
Before you read this Koho review any further, I'll let you know right now that Koho is currently only available in Canada.
I believe they have plans to expand into the United States and other countries in the future, but I haven't heard a set date for that yet.
How Does Koho Work?
Koho bundles a reloadable prepaid visa card with extra functionality, including budgeting, saving, cashback, and more (see ‘Koho features' below).
On the surface, Koho works exactly like a debit card. You load it with cash first, and then you have that amount to spend however you like using your Koho credit card.
Once you run out of money on your card, that's it. You can't spend more until you reload it. If you try to spend more than what's on your card, the transaction will just get declined. There are no insufficient fund charges, or any fees at all really (more on fees later).
Reloading your card is easy and can be done in two ways:
- Interac e-transfer from another bank account; or
- Direct deposit from an employer (you can have your entire paycheck or just a part of it deposited)
Now, even though Koho functions similarly to a debit card, it does have some differences. Koho is technically a prepaid visa card, so you can use it anywhere Visa is accepted (e.g. online). Your Koho card also comes with perks a regular debit card doesn't, like cashback rewards.
On top of all that, the Koho app adds even more functionality to your card. Within the app, you can:
- Access your online chequing account balance
- Set up savings goals
- Configure automatic roundups
- Send unlimited e-transfers; and more.
I've been with Koho for a long time now, and in the beginning, their app was pretty simple. Not a ton of features, but enough to support the basic goal they were going for (easy budgeting and spending with no fees).
Over time, they've added a lot of new features and they continue to add more and more. To see their roadmap (future features) go here.
For now, here's a list of some current Koho features:
Virtual and Physical Cards
When you sign up for Koho, not only do you get to choose a cool physical card (they offer a ton of different looks and colors you can choose from) but you also get a virtual card right off the bat.
Your virtual card can be used for online purchases and it comes in handy more often than you may think.
0.5% Cash Back
This is easily one of the top reasons to use Koho as your choice of prepaid Visa. It's the only reloadable card in Canada I know of that offers cashback, and while 0.5% isn't a TON, it's not bad for a reloadable card.
Also, this cashback amount can be increased by referring users to Koho or subscribing to Koho's premium plan (more on both of these below).
The 0.5% cash back offered by Koho is the main PowerUp, but they also have other ones with stores they partner with. For example, at the time of writing this, if I use my Koho card at Frank and Oak (online or in-store), I'll earn an extra 5% bonus cashback. Cool.
That's not the only offer either. They have a list of stores with similar offers like this, which you can find under the ‘PowerUps' section in your Koho account. Offers are added and removed all the time.
If you've used Mylo, Acorns, Wealthsimple, or another app that offers RoundUps before, Koho does it the exact same way. You can set it up to round up every purchase to $1, $2, $5, or $10. As you make purchases, you'll automatically save money.
This is a really nice way to save a bit of spare change here and there, but I wouldn't rely on it as your only source of savings as it's not very consistent.
Koho's mission is to help you save, and this was one of the main features on the app when it was first released. You can input a goal name into the app (or multiple), the desired amount you want to save, and the date by which you want to accomplish your goal.
You can then set up a recurring contribution to your goal, which can be daily, weekly, bi-weekly, semi-monthly, or monthly.
Once you're fully set up, Koho will automatically calculate your recurring contribution amount to make sure you hit your goal in time. For example, if I set up a goal in Koho to save $1,500 in, let's say, 365 days, it would automatically calculate that I need to save at least $4.11 every day to hit that goal.
Note that if you miss a contribution or have extra cash in your account, Koho notices that too. If that happens, you can choose to either have Koho move the end date up or push it back while keeping contribution amount the same, or you can have Koho automatically increase or decrease the contribution amount while keeping the goal end date the same.
This savings goal feature is great for saving up for fun things, but it can also be used to build an emergency fund or to automatically contribute to sinking funds.
Have you ever looked at your monthly credit card statement only to find weird transactions that make no sense (e.g. SFWYGRNVL12)? Sometimes I have to Google certain transactions just to remember what they were actually for (maybe that's just me).
Anyway, that problem doesn't really happen with Koho. I find their purchase detection to work extremely well. If you make a purchase at Safeway, it will be reported as Safeway, simple as that.
Within the Koho app, you can go to the “Activity” section to see your recent transactions (pictured above), and you can tap a transaction to see more info and to add custom tags:
Your purchases are automatically categorized by Koho as well, but you can update categories if they're wrong. This also feeds into the next feature…
Spending and Savings Insights
To help you keep track of your finances and goal progression, Koho breaks down your monthly, weekly, and daily spending and savings.
For spending, they'll show you where your money went (based on categories or tags):
And they'll compare your current spending to past months with a spending breakdown:
For savings, they'll show you which goals you contributed to and give you a comparison month-over-month as well, similar to the spending insights above.
Thanks to my girlfriend for kindly sharing her insights with me for this Koho review 🙂
Withdraw Cash from ATMs
Koho is partnered with Visa so you can withdraw money from any Visa Plus ATM. Just look for their logo:
Keep in mind, you may be charged a $2-$3 fee for using an ATM with your Koho card. Still, this is better than the cash advance fees you'd typically be charged using a credit card at an ATM.
You can use your Koho account to pay bills like your credit cards, cell, internet, hydro, utilities, etc. Just add the payee through the app. Learn more here.
On the home page of the app, you may notice some “exclusive offers”. These are basically just ads, but some of the offers end up being pretty useful anyways.
This is one of the main ways Koho makes money – they partner with other brands (sometimes they'll advertise their own stuff here too).
Lock Your Card Anytime
Koho allows you to lock your cards whenever you want, which is pretty handy. You could use this feature to protect your funds if you lose/misplace your card or to restrict your spending to stop yourself from wasting money.
If your bank doesn't already offer free e-transfers, KOHO will reimburse you the e-transfer fee for any transfers over $20.
Note that you can only be reimbursed for up to 30 transfer fees in any given calendar month, and the max reimbursement amount can only be $3.
Speaking of investing, if you want to get a BIT more out of your savings than you would with a regular savings account, Koho Save is something you may be interested in.
Koho save is completely free, with no extra fees, and offers 2% interest on all your savings.
If you choose to opt-in, Koho will open an account for you with Canadian ShareOwner, a federally regulated and CIPF insured broker. ShareOwner will then deposit your money for you in a trust account with a Schedule 1 Canadian bank.
This basically means your money is protected and insured, and if anything were to happen to Koho, you'd be able to receive your money from ShareOwner.
Other than that, your money and account will look the same in the Koho app, you'll just receive a higher interest rate on your savings. Everything else stays the same.
Koho has a pretty sweet referral program. Once you sign up, you can find your custom Koho referral code in the Koho app.
Simply send that code/link to your friends or family members and if they sign up for Koho through your unique code, you'll both get an extra 1% in PowerUps (aka cashback) for 90 days. The 90 days kicks in when your referral makes their first purchase.
The only thing I don't like about the Koho referral program is that they limit you to a maximum of 10 referrals.
If you want to sign up with my Koho Referral code, it's IAUF0VGB.
Koho Card Limits
Now that you know the features, let's talk about the limits of your Koho card/account. I won't go over all of them, but here are the ones you should know about:
- Max card balance – $20,000
- Spending limit – $3,000 daily, $30,000 monthly
- Max transactions/day – 15
- Daily ATM limit – $600 (max withdraw of $300 at a time) (max of 5 withdrawals/day)
- Monthly ATM limit – $3,000
- Max loads/deposits – 20/day, 60/month (includes both direct deposit and e-transfer)
- Max deposit amount – $10,000/day, $40,000/month (includes both direct deposit and e-transfer)
- e-Transfer sending limit – up to $3,000/transfer, $3,000 max/day
- Koho to Koho sending limits – up to $1,000/transfer, $2,000 max/day, $20,000 max/month
- Koho to Koho transaction limits – 10 transfers max/day, 60/month
- Pre-Authorized debit limits – 20/month
If you're using Koho pretty casually, none of these limits should affect you very much, but it's good to be aware of them. Learn more here.
Koho Joint Account
Along with personal accounts, you can also open a Koho Joint account with a friend, sibling, significant other, or whoever. Upon creation, you'll both get your own joint card in the mail and you'll each have access to the account through the Koho app.
The joint account works just like a personal account, meaning you can have joint savings goals, roundups, and cashback.
Another neat feature is that when one person makes a purchase with a joint card, both account owners are notified. For example, when I make a purchase with my joint card, the app notifies both me and my girlfriend with a “Dylan spent X amount at X place”.
The best part about having a joint account though? Easy purchase splitting. No dealing with bank transfers, cash, or anything like that.
One thing to keep in mind that I found a bit weird at first with joint accounts is transferring money into them. You can't directly do an Interac e-transfer into your joint account. Instead, you need to e-transfer money into your personal account, and then use the app to transfer that cash to your joint account. Just one extra step.
That being said, direct deposits CAN go directly to your joint account, so no worries there.
Joint Account Limits
Koho Joint accounts have almost the same limits as free accounts. The only differences are the max card balance, and the Koho to Koho sending limits.
Your joint card can have a max balance of $40,000 (versus $20,000) and you can send up to $1,500/transfer with K2K (versus $1,000) and up to $2,500/day (versus $2,000)
Along with the regular free Koho accounts and Koho Joint accounts, there are also Koho Premium accounts. Koho Premium is for anyone who wants to get even more out of their Koho card.
It's a paid subscription, so it's definitely not for everyone, but having it as an option is nice. To get started, Koho Premium will cost you either $9/month on the monthly plan or $7/month if you pay annually ($84/year).
So, is it worth it?
Well, take a look at the extra perks and features and decide for yourself:
- More cash back – Premium Koho users get 2% cashback (versus the 0.5% regular users get) on these categories:
- Eating & drinking
- Groceries; and
- No foreign transaction fees – Free users are charged a 1.5% FX fee.
- Financial coaching – Premium users get free access to a financial coach in the Koho app. Just tag your message #coach through the in-app chat to get started.
- Price matching – Snap a picture of your receipt from supported merchants and Koho will look for price match opportunities. This is similar to Paribus.
- More PowerUps – Koho premium users get access to more PowerUps, which means more cashback.
- Higher card limits – Premium cardholders can carry a higher balance, have higher transaction limits, can withdraw more from ATMs, have higher load limits, and more.
- One free international ATM withdrawal per month.
- Special Koho Premium Card
So, back to the question: Is Koho Premium worth it? That really all depends on how much you plan on using your card. Here's the math:
Koho Premium users get 1.5% more cashback than free users, so in order to earn back the $7/month, you'll have to spend about $467 every month.
If you're on the monthly plan, you'll have to spend about $600/month to earn back that $9/month.
Is Koho Safe?
Good question. Moving your money somewhere new can be a bit nervewracking but I can assure you that Koho is safe. They've taken measures to ensure your money is protected and insured even if something were to happen to them.
In fact, Koho never even touches your money at all. Here's how they explain it in their own words:
“Koho holds no funds, all funds are held by Peoples Trust, which is a CDIC-insured bank. This means if Koho were to cease to exist, your money would be safe and accessible through Peoples Trust.”
On top of that, your Koho Visa card is insured under Visa’s Zero Liability Purchase Protection Plan, meaning you’re protected against fraudulent transactions and unauthorized use of your card or account information.
Benefits of Using Koho Over a Regular Credit Card
One of the big benefits of using Koho over a regular credit card is that it's impossible to overspend with a Koho card. If you try to spend more than what's in your Koho account, the transaction will just get declined.
Now, of course, this could be seen as a con as well. Using a credit card is easy because you don't have to worry about having money on the card. However, for people trying to avoid debt, this is definitely a good thing.
Another benefit of using Koho over a regular credit card is all the features it comes with. A lot of credit cards/brick and mortar banks still don't offer things like roundups, spending insights, savings goals, and things like that.
Koho is all about reducing fees and being as affordable as possible, but there ARE still a couple of fees to be aware of as a Koho user:
- Foreign transaction fee – Free Koho users are charged a 1.5% FX fee but premium users get this waived.
- Inactivity fee – If after 13 months of card activation your card goes unused for 90 days, there will be a $1/month inactivity fee
How Does Koho Make Money?
Is all of this sounding too good to be true? Don't worry, Koho is pretty transparent about how they make money:
- Interchange fees – This is the one most people are unaware of, but it's one of the biggest revenue sources for Koho. Whenever you make a purchase with your Koho card, the merchant pays a fee in order to accept your payment. Koho splits this fee with Visa, and then gives you a bit of it through the PowerUp feature. It's sort of a win-win for Koho users and Koho.
- Premium – This is a pretty obvious one. Premium users pay a monthly/yearly subscription.
- Affiliate marketing – Each time you take advantage of an exclusive offer through Koho, they make some money.
- Exclusive cards – Koho offers some limited edition cards for a fee for users who are interested. They recently offered a fancy metal card for a $159 one time fee.
Koho is owned and operated by CEO Daniel Eberhard who founded Koho in December of 2014.
Yes, KOHO is a legitimate company.
Nope. Opening and using a KOHO card will never affect your credit score as Koho does not report any of your activity to Canadian credit bureaus.
Koho is NOT a licensed bank, and that's why they don't hold any of your funds. Instead, Koho is a fintech company that has partnered with Peoples Trust, a CDIC insured Trust Company, and Visa, in order to provide the services they provide. Peoples Trust holds the funds, and Visa handles the spending.
Mostly. Koho has two free accounts – the regular spending account and the Koho joint account. However, they also have a paid account, known as Koho premium, which costs $9/month or $84 annually. The premium account is completely optional though.
You sure can! Koho is a great travel card and you can use it anywhere Visa is accepted, which includes a lot more places than just the states. Just be aware that unless you're a Koho Premium user, you'll be charged a 1.5% fee on all foreign transactions.
Koho Pros and Cons
- Great customer service – I've had nothing but good experiences using the Koho app support service. One time in particular was especially nice – Koho had trouble sending my Joint card when I created a new joint account with my S/O so they gave us both $5 just for the inconvenience. I love free money!
- Easy to use – The Koho app is designed very intuitively, it looks nice, and it's super easy to use.
- Helps you save money – With roundups, savings goals, and PowerUps, Koho does a great job of helping you save money.
- Quick loading + multiple options – Loading funds into my Koho account with e-transfer has never taken more than 5-10 minutes. And, although I don't use it, having direct deposit as a funding option is nice.
- Unlimited free e-transfers – If you need to take money out of your Koho account or send cash to a friend, having unlimited free e-transfers is a nice perk. My bank offers this too, but I know a lot of banks charge a fee once you hit a certain number of e-transfers in a month.
- Good purchase detection – Koho is very good at categorizing and describing your purchases. For example, if you buy something from Tim Hortons, Koho will say “Tim Hortons” in the activity section of your account. My brick and mortar bank sucks at this.
- Low fees
- Doesn't help or improve your credit score – Using your Koho card doesn't build credit history.
- Foreign transaction fees – Free users are charged a 1.5% FX fee. This is waived for premium users but it would be nice to have no FX fees for free users as well (the Stack Mastercard offers this).
- Only available in Canada – Not a huge con if you're Canadian, but it would be cool to see Koho expand.
- Can't handle every transaction – I tried signing up for one of those ‘free trial' offers with my Koho card, it didn't work. Your Koho card obviously won't work in places Visa isn't accepted either.
Koho vs. Stack
The Stack Mastercard is one of Koho's top competitors, and the services are both very similar. So which one is better? Well, let's break down the big differences:
First, Stack is a Mastercard, not a Visa. Mastercard is slightly more widely accepted than Visa so that's a plus for Stack.
The next big benefit of Stack is that there are NO FX FEES for all users. This is pretty huge if you're looking for a travel card. However, Stack does not offer 0.5% cashback as Koho does, so it's a tradeoff.
I still have yet to user Stack myself, so keep an eye out for my Stack review which will be coming soon.
Koho Review: My Personal Thoughts
Ok, now that you know how Koho works, whether it's safe, and all that good stuff, it's time to get to the real review part of this Koho review.
Personally, I think Koho is an awesome service, but for me, it's not a credit card replacement. Instead, it's more of an extra tool in my personal finance toolkit.
For example, when I go traveling, I like to use my Koho card because the foreign transaction fees are less than my bank charges. My girlfriend has a premium card as well so she has no FX fees.
Also, I LOVE my Koho Joint Account. It's fantastic being able to share a spending account with my girlfriend.
So, while Koho isn't going to have me cutting up my credit card anytime soon, it's still something I'm going to use and enjoy.
Does that mean Koho CAN'T be a credit card replacement? Well, yes and no. It's definitely capable of replacing your credit card, I just don't recommend it.
Instead, I recommend keeping your traditional credit card, even if you just use it to build your credit score. To do this, you can put basically all your transactions on your Koho card, and then just use your credit card for a few small transactions a month.
Just make sure to pay off the credit card debt you incur by doing this every month to build good credit history and avoid interest charges.
If you're someone who is unable to pay off your credit card debt every month, this strategy is pointless. Speaking of, let's transition into our next topic…
Who Should Use Koho
If you need a credit card but you're afraid/not ready/trying to stay away from debt/credit in general (or you simply CAN'T get approved for a Visa), Koho is a good choice. It's not the only prepaid Visa out there, but it's definitely one of the best.
Also, if you're an overspender or shopaholic and you have trouble controlling your spending with a credit card, Koho is perfect. My girlfriend, for ages, would build up a huge credit card bill, pay it off, and then repeat the cycle. It didn't seem like there was a fix. She's now a Koho Premium user and she's loving it. It's helped her budget and control her spending a ton.
Who else is Koho good for? Budgeters in general! Even if you have no problem paying off a credit card bill, sometimes it's just nice to keep different purchases separate. Your Koho card can be a bit like a virtual cash envelope budget. For example, you could keep money in your Koho account for fun spending.
Also, even if you have no interest in a Koho personal account, the joint account feature is still really handy. I opened a joint account with my girlfriend and we use it as a date fund and for other joint purchases. It's made it so much easier for us to budget and save up for things together.
How to Open a Koho Account with a 1% Cashback Bonus
Opening a Koho account and receiving your card is as simple as downloading the app and creating an account. Once you set everything up your card will come in the mail within 10 business days and you'll just have to activate it by following the steps they send you.
Koho is great. Their mission to create a simpler, more transparent and more affordable banking service is awesome, and I think they're doing a great job with it so far. I'm excited to see how they continue to grow and innovate over the coming years.
If you enjoyed this Koho review:
Sign up for KOHO here and get an extra 1% cashback for 90 days! (I'll get a bonus too, so thanks for the support!)
What are your thoughts on Koho? Leave your own mini Koho review in the comments below!