Did you know that only about half the Canadians create a budget and follow it?
One consequence of poor money management is that you have to borrow money eventually to buy food or meet your necessary expenses. This is where free and good budgeting and money management tools are readily available.
But the “nothing good is ever free” mentality may keep us skeptical of free services and products, especially when it comes to our hard-earned money. Although this attitude saves you from scams and frauds, it may also keep you away from financially transformative platforms like Mogo.
So, I’ve prepared this Mogo Canada review to answer some questions you might have before trying this platform.
Money Management, Identity Protection
Pros of Mogo
- Free credit score
- Free identity fraud protection
- Sustainable spending
- Low-fee bitcoin trading
- Decent loan and mortgage products
- No-fee preloaded Visa Platinum card
Cons of Mogo
- Customer support responds slowly
- Few mortgage options for a brokerage
- Doesn’t allow more crypto options
Table of Contents
What Is Mogo?
Mogo is a Vancouver-based, publicly-traded financial management and mortgage loan company with a market capitalization of about half-billion dollars when writing this.
Mogo’s About Me page effectively sums it up as a platform that allows you to manage your money sustainably. That definition, unfortunately, paints a limited picture of Mogo, so let’s look at a different one.
- Mogo is a money management platform that allows you to meet your financial goals through a prepaid card and financial education.
- It’s Canada’s first—and currently only—platform that offers free identity fraud protection.
- Every dollar you spend with Mogo allows the company to offset one pound of carbon dioxide emissions, making the environment more sustainable.
- It offers free credit score information.
- It provides decent loan products.
- You can invest quite easily in Bitcoin with Mogo.
That’s what Mogo is. And the best part is that it’s all for free.
It might sound too good to be true, but a deeper and more thorough look at the platform’s features might help you decide whether it’s all just bells and whistles or it’s a practical financial management solution.
Mogo: Financial Products, Features, and Benefits
The glamour of having many products and features, especially from a free platform, can be quite alluring. But unless you understand how each product works and benefits you, it’s “all hat and no cattle,” as they say across the border.
Mogo offers six products that you can use by signing up (which only takes about three minutes). There is a seventh product as well, called Mogo Wealth. Still, it’s more a culmination of financial education, investment strategies, and tips that Mogo offers, not a separate tangible product like the other six.
Mogo Free Credit Score
Mogo has partnered with Equifax, one of the two major credit bureaus that operate in Canada to monitor your credit score for free and help you stay on top of your financial health. Since it’s a soft check, it doesn’t impact your credit score. If you want to get your score from the other credit union (TransUnion), you might consider using Credit Karma.
It is updated monthly, which is common with other free credit score sources. The only limitation is that you don’t get your credit report with Mogo, so you can’t investigate the specifics of the finances that are affecting your score.
Why is this helpful?
The free credit score feature helps you keep track of how you appear to potential lenders. Whether you need a mortgage, a car loan, or a personal loan, your potential lenders will look into your credit score, among other things, to decide whether you are a worthy borrower and what’s the appropriate rate you will get.
Mogo’s free credit score doesn’t paint the whole credit picture, but it’s significantly better than flying in blind and crashing into a bad lender.
With a free credit score, you’d know where you stand. Plus, the Mogo platform also educates and guides you on how you can improve your score.
Mogo Protect—Identity Fraud Protection
Identity theft or identity fraud covers a lot of different crimes. But its simplest definition is when someone steals your credentials, log-in details, and even your Social Insurance Number (SIN) off the internet and uses it to steal your money or receive benefits and payments on your behalf.
The identity fraud rate is on the rise in Canada, rising by over 187% between 2010 and 2019. Identity frauds cost Canadians almost $130 million a year. However, relatively few people seek adequate protection against identity fraud because it usually costs them about $10 a month. Even at the low end of the pricing spectrum, you may need to dish out between $80 and $90 every year.
Fortunately, MogoProtect offers identity fraud protection services for free.
It offers just one slice of the whole pie that is identity theft protection. It monitors your Equifax credit activity daily and warns you whenever a hard inquiry is triggered, which may happen if someone applies for a loan or a credit card using your stolen credentials.
If you didn’t trigger the inquiry yourself, Mogo would guide you on how to follow up on the identity fraud threat and how to prevent it.
The paid identity fraud protection services offer a much larger umbrella of relevant protections. However, if you don’t intend to invest in identity fraud protection, this free protection can be your solid ally.
MogoSpend is where money management features of the platform and saving the planet comes together.
It’s essentially a prepaid Visa card that you fund with your own money. It’s not a viable replacement for a checking account because you can’t make direct deposits, send or receive e-transfers, or write checks via this card. But it does come with some helpful features and benefits:
- You get to save the planet with every dollar you spend with your Mogo card.
- You get 1% to 2% cashback in Bitcoin, although it comes with a few stipulations. For example, you must have referred someone to Mogo.
- Spending insights helps you become more careful with your money.
- You can automate your budget. By itself, it won’t keep you from overspending. However, if you combine it with good spending habits like only taking care of certain expenses with your Mogo card, you might be able to stay true to your budget.
- You can also set daily, weekly, and monthly spending goals that remind you to stay within your budget.
The card and Mogo spending account come at no fee. However, while the features are decent and helpful enough, especially when they don’t cost you a penny, the Mogo platform ‘s spending feature might not be able to hold out on its own compared to other free alternatives. The cashback is nice, but it’s oriented more towards investing (since it’s in Bitcoin) and less so towards spending.
However, in the context of what else comes with it when you become a member of the Mogo platform, it’s worth a try. If you are already on your way to becoming more financially disciplined, MogoSpend will likely help you.
Important Note: Mogo Visa card might be free, as in you don’t have to pay any monthly fee, but it’s not entirely free. There is a $1.5 ATM withdrawal fee apart from the ATM owner levies and an inactivity fee.
If you don’t use your Mogo Visa card for 365 consecutive days, you will pay a $1.99 per month fee that will continue until your card balance is zero. There is also a $25 dishonoured payment fee.
Mogo offers loans to borrowers from all credit score backgrounds through its lender partners. The loans are for:
- Emergency needs
- Debt consolidation
- Home renovation/moving expenses
- Small business expense
- Other reasons
The total amount you can get a loan for is between $500 and $35,000.
There is a pre-approval test that Mogo runs with the information the platform already has on you. This tells you whether you qualify and what rates you will get.
Currently, Mogo is working with two lender partners:
Lendful: It offers personal loans from $5,000 to $35,000 for up to five years, with an annual percentage rate (APR) between 9.9% and 21.5%.
easyfinancial (goeasy Ltd.): The platform offers MogoLiquid Personal Loans in association with this partner. They can be from $500 to $15,000 and rack up a much higher APR between 29.99% and 46.96%. The loan terms are usually up to five years, while the rate you will land will be based on your credit history.
MogoMini is a line of credit you can get for a higher rate. You can get up to $3,500 at an assumed interest rate (AIR) of $47.42%.
For instance, if you borrow a total amount of $3,500 and pay it within a year, you will be paying $1,659 extra, which might seem criminally high compared to a regular personal loan. However, it’s significantly cheaper than a payday loan (about 88%, as per Mogo’s claim).
The range of mortgages that Mogo offers as a brokerage firm is somewhat limited. You only get three-year, fixed mortgage loans, five-year, fixed mortgage loans, and five-year, variable mortgage loans. But, as the platform proudly claims, you get significantly better rates compared to the big banks.
You can get a mortgage if:
- You live in BC, AB, MB, ON, NB, NS, PE, and NL.
- You have a credit score of at least 640.
- You can pay 5% or more in the down payment.
Remember that Mogo is a mortgage broker and not a lender. It matches you up with the best lenders and helps you get the best rates, but it doesn’t fund the mortgage funds by itself.
The terms it currently offers are relatively limited, so it might not suit most borrowers looking to get a long-term mortgage.
Crypto, or more accurately, Bitcoin investing, is where the Mogo platform goes all out.
You can place up to $1,000,000 in your MogoCrypto account to trade Bitcoin. It also prides itself as the only Bitcoin trading platform that the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) regulates and publicly trades on both the Toronto Stock Exchange (TSX) and National Association of Securities Dealers Automated Quotations (NASDAQ).
But like any other Bitcoin trading platform, it has both strengths and weaknesses that you should know about.
The good part is that:
- There are no fees for opening a trading account with Mogo and no monthly and annual fees.
- The trading fee is relatively low at 1% while competing platforms charge relatively more. However, this fee is different from the money you “lose” in the spread.
- Ninety-five percent (95%) of the Bitcoins under the company’s supervision are stored in safe, cold storage offline, which can be impervious to cyber-attacks.
- You can get 0.5% cashback on trades over $10,000.
- It is a decent trading platform.
- You get a $5 bonus when you sign up.
- You get $5 to buy your first bitcoin.
The not-so-good things about MogoCrypto include:
- You can’t trade any other crypto asset, only Bitcoin.
- You can’t transfer Bitcoin out to your own cold/hot wallet. Neither can you transfer a Bitcoin into your MogoCrypto from another wallet or platform.
- There is no Bitcoin community or expert advice that you can get from the platform.
You don’t need to buy the whole Bitcoin or unruly denominations since MogoCrypto allows you to invest in and keep “Satoshis”. Satoshi is the smallest denomination of Bitcoin, and at the time of writing this, you can buy a million Satoshis for about $630. This “micro” investment in Bitcoin is called stacking Satoshis.
The social proof doesn’t paint a very flattering picture of Mogo. The Google and Apple store ratings are acceptable at 4.2 and 4.3, respectively, based on thousands of reviews. However, its Trustpilot and BBB reviews/ratings are in shambles. The platform only has 6 Trustpilot reviews and a 2.4 rating.
The company is not accredited with BBB. It has a 1.17/5 rating and 21 complaints in the last three years. Most of the complaints find the customer support lacking, with communication going through chatbots. This is something that most people find annoying and led to other unresolved issues.
Simply put, people who use the platform for its basic credit score and protection features seem relatively happy. However, borrowers and Bitcoin traders have some very specific complaints about the platform.
Is Mogo Safe and Legit?
Yes. It’s a publicly listed company with 500 million market capitalization. The balance sheet has gotten a bit weak in the past few quarters, but nothing too out of proportion. It’s accredited and associated with the proper regulatory bodies for the financial products and services it offers, and it partners up with well-reputed lenders.
Alternatives and Competitors
Mogo has a decent spread when it comes to different financial products. Few of its competitors and alternatives offer all the products and services that it provides.
Koho offers spending accounts and cards that are akin to Mogo. Its no-fee account comes with 0.5% cashback and roundup features. It also charges fewer fees on foreign ATMs at 1.5%, compared to Mogo’s 3%.
Another good thing is that you get part of your government payments early on. Plus, you can easily save your money and create a budget. However, it doesn’t allow you to invest, although it offers a free credit score and free identity fraud protection.
For free credit score, Credit Karma is Mogo’s alternative. It offers a free credit score from a different bureau, but it goes one step up and offers free reports as well. It, therefore, offers more detailed information.
You can also hunt for credit cards, mortgages, and personal loans on Credit Karma. It can connect you to about 30 lenders and help you get higher loan amounts of up to $50,000, compared to Mogo.
Wealthsimple is an investment management and trading platform that offers a few things that Mogo doesn’t.
The only significant overlap is that both platforms allow you to invest in Bitcoin. However, there’s a difference: Mogo charges 1%, while Wealthsimple charges 1.5% transaction fees. Wealthsimple also lets you trade Ethereum.
Mogo offers a lot of features and financial products. Nonetheless, if it were to introduce a robo-advisor, a commission-free trading platform, and a few other things, it may emerge as a comprehensive and complete financial solution for Canadians.
Even if for nothing else, you might want to have the Mogo app on your phone for a free credit score and identity fraud protection.
We hope this review has helped you decide whether Mogo is the ideal fit for you or you should look into a different solution.
All in all, Mogo gets a Wealth Awesome thumbs up. It would have gotten double thumbs up, though, if it weren’t for its online reviews and customer service complaints. You can check it out here.