Benefits of Using a Prepaid Mastercard

A prepaid Mastercard lets you make everyday purchases without borrowing money.

You load money onto the account first. You can then use the card for in-store purchases and online shopping.

It can also be useful for recurring payments and travel. Since you are spending your own money, you do not pay credit card interest on your purchases.

KOHO Prepaid Mastercard

KOHO Prepaid Mastercard lets you spend money you already have.

With KOHO Prepaid Mastercard, you can:

• Get instant approval with no credit check

• Spend only the money you load onto your account

• Pay no interest on your purchases

• Earn up to 2% cash back

• Use your card for in-store purchases, online shopping, and recurring payments

You Can Control How Much You Spend

One of the biggest benefits of a prepaid Mastercard is spending control.

You generally cannot spend more than the money available in your account. This can make it easier to stick to a budget.

For example, you could load $500 for monthly discretionary spending. Once that money is used, you know you have reached your planned limit.

KOHO also lets you track spending in real time through its app.

You Don't Pay Credit Card Interest

A prepaid Mastercard does not give you a traditional revolving credit balance.

You spend money you already have. This means there is no unpaid credit card balance collecting interest from your purchases.

This can be useful if you want the convenience of a card without the risk of carrying expensive credit card debt.

You Can Shop Online

A prepaid Mastercard can be used for online shopping wherever accepted.

You enter your:

• Card number

• Expiry date

• Security code

• Billing information

You can use it much like a traditional card at checkout.

You Can Use It for Everyday Purchases

Prepaid Mastercards are designed for regular spending.

You can use them for expenses such as:

• Groceries

• Transportation

• Restaurants

• Shopping

• Bills

• Subscriptions

You Can Avoid a Credit Check

Some prepaid cards do not require a credit check because you are not applying to borrow money.

This can make prepaid cards accessible to people with limited credit history.

It can also be useful if you simply do not want another credit inquiry.

You May Be Able to Earn Cash Back

Prepaid does not necessarily mean giving up rewards.

KOHO offers up to 2% cash back depending on your plan and spending category.

Cash back lets you earn a portion of eligible purchases back as money in your account.

Check the categories and reward rate before choosing a card.

Prepaid Cards Can Be Useful for Travel

A prepaid Mastercard can also be useful when travelling.

This can make it easier to control your travel budget.

Some KOHO plans also include no foreign transaction fees.

Is a Prepaid Mastercard the Same as a Credit Card?

No.

A credit card allows you to borrow money up to a credit limit.

A prepaid Mastercard uses money you have already added to the account.

The cards may look similar. They can also be accepted at many of the same merchants. The way the money works behind the scenes is different.

Does a Prepaid Mastercard Build Credit?

Usually not on its own.

Prepaid card purchases do not normally involve borrowing money. Your regular spending therefore is not usually reported as credit activity.

If your goal is to build credit, look for a separate credit building product that reports payment activity to the credit bureaus.

Is a Prepaid Mastercard Worth It?

A prepaid Mastercard can be useful if you want card convenience without borrowing money.

It can help you control spending. You avoid credit card interest on purchases. You can also shop online and use the card for everyday expenses.

For someone who wants many of the practical features of a credit card without carrying a traditional credit balance, a prepaid Mastercard can be a strong alternative.