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Everything You Need to Know about Canadian Virtual Credit Cards 

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What is a virtual credit card? Why do you need one? Does it make online shopping convenient and safe? So, you have come across virtual credit cards. You want to have one, but you cannot go ahead without clarifying your doubts. We will answer all your queries in the following. 

A virtual credit card can enable you to shop online without revealing your credit card account details. Many of us experience security challenges while making online payments. You can minimize the risk by using a virtual credit card. A virtual credit card will offer the benefits of credit cards without exposing your account details to fraudsters. 

Virtual credit cards work like regular credit cards, but they offer better security. You can expect an added layer of protection. Additionally, you will have many options for virtual credit cards in Canada. You can check the features and benefits before going ahead with one. 

The following guide will cover all the details to enable you to understand a virtual credit card. Also, we will discuss both the positives and negatives. If you feel confident about having one, you can go through the top five virtual credit cards. Check the features and benefits and choose the one that meets your unique requirements. 

What is a Virtual Credit Card?

From the name, you might have realized that a virtual credit card enables users to go digital. Yes, you are right. It is a virtual card that supports your online shopping without posing a security threat. The card will contain a number. That you need to use while shopping online. Once you have this card, you do not need to use your credit card. The virtual credit card issuer will generate a number randomly with a security code and the expiration date. You will have to use them to shop online without using your credit card details. The objective is to get extra protection and minimize security issues. 

If you shop online frequently, you can use a virtual credit card to make payments. You will find the process easy, safe, and smooth as well. You need to enter the 16-digit number, the security code, and the expiry date. The online retailer will process your payment. None of you will experience any inconvenience during the process. 

How Do Virtual Credit Cards Work?

As stated earlier, the objective of a virtual credit card is to make online payments easy and safe. It will work like a credit card while offering the same benefits. However, you will not expose your account details to fraudsters with a virtual credit card. 

Virtual credit cards will come with a spending limit and an expiry date. Also, card issuers will generate many card numbers. Additionally, you can freeze a virtual credit card whenever you want with a single click.

While making any online payment, you will have to log into your account. After logging into your credit card account, you will have to use the virtual card payment details. You will feel like you are using your credit card for payments. But in reality, you will be using your virtual credit card. As you will not use your credit card details, the chance of a security threat will be minimal. The merchant cannot access your credit cred information if you use a virtual credit card. Therefore, the process will be completely safe. 

Benefits of a Virtual Credit Card

You will get all the benefits of your credit card. Also, you will get extra protection, and no one can access your account details that you might experience while using your credit cards. Currently, many are experiencing security issues while using credit cards for online shopping. With a virtual credit card, you can minimize the risk significantly. There will be no fear of losing your sensitive account information. Also, you will have the option to close the account whenever you want. 

You can get more benefits by setting the expiry date and spending limit. Also, most virtual credit cards are free. The reason is that you will use them for your existing credit card. While using a virtual credit card, you can also get the pros of your credit card. More importantly, there will be no waiting time. You can register with the issuer and get a virtual credit card. The best part is that advertisers cannot track your progress. In brief, you can expect a completely safe process while getting all the benefits of credit cards. Here are more details. 

Advanced Security: We can experience security issues in no time while using our credit cards online. If you lose your credit card information, you might face challenges. While using a virtual credit card, you will not face this problem. You do not need to enter the details of your credit card. It is one of the benefits of a virtual credit card. It will protect your credit card from fraudsters. Moreover, you will get a new number if you feel some security issues. Also, you can freeze and lock your card to prevent something unpredictable. You will have a lot of options to get advanced security while using a virtual credit card. 

Spending Limit: Online shopping has become a passion for many. We keep buying even if it is not necessary. Sometimes, we cannot track our expenses. However, you can avoid all these by using a virtual credit card. You can set the spending limit, and once you reach that limit, you cannot make purchases anymore. As a result, you can avoid overspending. Also, you can track your expenses. 

Convenient Solution: A virtual credit card is easy to use. In addition to security benefits, you will appreciate the usage. You will not need your wallet every time while making a purchase. You can access them on your phone when buying something online. Yes, you do not need to enter your credit card information. 

No Waiting Time: After applying for a credit card, you will have to wait for days or even weeks to receive it. However, you will not experience this problem with a virtual credit card. It will be available immediately. Also, you do not need to wait for your credit card to make online payments. You can use your virtual credit card for this purpose.

No Extra Charge: Most virtual credit cards are free. As you will use them for your credit cards, you will not have to spend on annual fees. 

Easy In-store Payments: Many people use digital wallets, including Google Pay and Apple Pay. If you link your credit card to your digital wallets, the virtual card issuer will generate numbers for your purchases. Hence, you will not have to share your credit card information. You will find the process safe and easy. 

Credit Card Benefits: As mentioned above, virtual credit cards are free. Yes, you will not have to pay extra for having one. But you can get the benefits of your credit cards while making payments with your virtual credit cards. For example, if you have a cashback credit card, you can get cashback benefits while using your virtual credit card. The same is about the zero-ability benefits. That you get while using Mastercard and Visa for unauthorized transactions. 

Apart from all these, the credit bureau will track all the virtual credit card transactions. Therefore, the expenses can improve the credit score of users. 

You can expect all these benefits from a virtual credit card. It will make your online expenses safe. Also, it can enable you to minimize spending.

Drawbacks of Virtual Credit Cards

Yes, there will be some downsides. Even if virtual credit cards are easy and safe to use, you can consider using your physical credit card under certain circumstances. For example, if you need to prove your identity while receiving any product, you will have to use your regular card. The reason is that your credit card number and the virtual card number will be different. You can experience the same problem while using your virtual credit card for car or rental reservations. 

Also, you cannot use the number after expiry. Hence, you will have to know the expiry date and get a new number to ensure hassle-free usage. Otherwise, the bank will suspend your subscription. 

Moreover, you can only use your virtual credit card for online shopping. You cannot use it in physical stores. You will need your regular credit card while buying from physical stores. Here are the downsides in detail.

Cannot Use in Physical Stores: Most physical stores do not consider digital wallets. In that condition, you will have to use your regular credit card. The risk of losing your account details will be the same. 

Inconvenience While Returning: If you use a virtual credit card to buy a product, you might experience challenges while returning it. The retailer will ask you for the credit card number, and you might not provide the number while using virtual credit cards. Hence, if there is any chance to return the product, you can avoid using your virtual credit card. 

Renewal: Many consider using a single-use virtual credit card. If you have one, you will have to renew your virtual credit card after every use. If you fail to do so, your bank might suspend the card. 

Security Risk: There is no doubt that a virtual credit card makes transactions safe. However, you can experience a security risk when a fraudster accesses an active card number. But you can freeze or cancel your virtual credit card in that condition. You can also claim for any unauthorized charges. However, you do not need to change your credit card.

How To Get a Virtual Credit Card

There are many ways to get virtual credit cards. You can get one with your debit card or credit card. Here are more details. 

Get a Credit Card: Yes, if you want to get a virtual credit card, first, you will have to apply for a credit card. Banks and credit card issuers, including CLBC, TD, BMO, RBC, and Scotiabank, offer credit cards. Before applying for a credit card, you can check the features. You will have to ensure that they provide a virtual credit card to support your online shopping. For example, if you have an RBC business account, you will have the option to get multi-use or single-use virtual credit cards. You can use the card for online shopping. You can use it to pay your suppliers and employees as well. 

Have a Prepaid Credit Card: You can also get a virtual credit card with a prepaid credit card. More importantly, these virtual credit cards are easy and free to use. Also, you can have one even with a poor credit score. We can take the example of the KOHO. It is one of the best virtual credit cards. Besides, you can expect cashback and other benefits.

Consider Having a Debit Card: You can apply for a debit card and get a virtual credit card. You can use your virtual credit card while shopping online. The best example of such type is an RBC Virtual Visa Debit Card. 

Get a Digital Wallet: Your credit card provider might not provide you with a free virtual credit card. But you can create one. You can add the credit card to your digital wallet and create a virtual credit card number. 

Best Virtual Credit Cards in Canada

1. KOHO Prepaid Visa Card

 

If you are looking for the best virtual credit card, you should not look beyond KOHO Prepaid Visa Card. It is the best prepaid virtual credit card available in Canada. You can get a free virtual credit card and use it for online shopping. Also, you can add it to the digital wallet. You can get 0.50% cashback on all your expenses. Additionally, you can get up to five percent cashback while making payments at some selected merchants. You can get all these benefits for free. Yes, this virtual credit card is free. Moreover, you can expect the following benefits.

  • You can make 1.20% savings interests with a direct deposit. Also, you will get the interest on the entire balance.

  • 1.5% transaction fees on foreign currency transactions.

  • With a Canadian bank account, you can make unlimited Interac e-transactions.

 

Furthermore, you will have the option to upgrade it to a premium account. With a premium account, you can get more benefits. There will be no monthly or annual charges. Also, you will get a $20 promotional bonus while making the first purchase. The downside is that there will be a $4,000 per transaction limit and a $20,000 monthly load limit. The daily ATM limit is $600.

 

2. KOHO Premium Prepaid Visa Card

 

You can expect more benefits with KOHO Premium Prepaid Visa Card. You can also have a virtual credit card by using its mobile app. You can get cashback benefits, but you will have to pay an annual or monthly fee. Here are the pros of the KOHO premium card. 

 

  • 2% cashback on transportation, groceries, and restaurants

  • 0.5% cashback on all expenses

  • No FX fees 

  • One monthly international ATM withdrawal for free 

 

You can use the virtual KOHO premium card to make quick online payments. Also, you can add this card to the digital wallet. The monthly fee is $9, and you will have to pay $84 for an annual fee. The maximum per transaction limit is $4,000. The maximum monthly load is $60,000. The Interac e-Transfer limit is $5,000, and the daily ATM limit is $800. However, it offers a promotional 20% bonus on the first purchase.

 

3. STACK Prepaid Mastercard 

 

You can use this prepaid credit card without any annual fee. Also, there will not be a currency conversion fee. That makes the Stack Mastercard the best choice for regular travelers. You will get cashback at more than 140 participating retailers. Moreover, its mobile app will enable users to manage their finances and spending. You can expect many benefits from its virtual credit card as well. Here are the advantages in detail.

 

  • Cashback at 140 retailers 

  • A free app that helps to track spending

  • No FX fees

  • Free bill payments

 

Users can view their virtual credit cards in the app, and they can freeze the card whenever needed. You can also add the virtual card to Google Pay, Samsung, Fitbit, and Apple digital wallets. As mentioned earlier, there will be no foreign exchange, annual, or monthly fee. However, you will have to make a minimum of $350 purchases to avoid paying foreign exchange fees. The promotional bonus is $5, and you can get it when you have a minimum $300 fund in your account. 

 

4. RBC Virtual Visa Debit

 

It is a debit card, and you will not have to pay any annual or monthly fee. But you can get a virtual credit card when you have an RBC chequing account. The process will be easy and less time-consuming. While using your virtual credit card, you will have to enter the security code, expiry date, and virtual debit number. Here are the benefits of the RBC virtual visa debit.

 

  • Online purchases

  • Instant cash deduction from the bank directly

  • A safe way to pay for mail and telephone orders

 

The card can be the best for all those who shop online. They will not have to use credit cards anymore for online shopping.

 

5. Wise Virtual Card 

 

You might be aware of Wise. Yes, it is a leading international money transfer company. You can apply for a Wise debit card to get a virtual credit card. You will get a virtual credit card while applying for a debit card. Also, you can use your virtual credit card to make online payments. Besides, you can expect many other benefits. Here are the features and benefits of a Wise virtual card. 

 

  • You can access more than fifty currencies through a multi-currency account. Therefore, you can pay in the local currency directly. There will be no FX fees. 

  • One can have around three virtual cards at a time.

  • You can freeze the account with one click.

  • You can get new card numbers and your payment details instantly.

 

It is worth mentioning that you can get a virtual credit card for free with a business or personal Wise account. Also, there will be no monthly or annual fees. However, there will be some transaction limits. The daily online payment limit is $17,500, and the monthly limit is $55,000. The daily withdrawal limit for ATMs is $2,650. The limit might not be the same for all accounts. Therefore, you will have to know your account type to have an accurate idea. You can get standard credit card protection if you link your virtual credit card to your Wise account or Wise debit card.

Virtual Credit Cards Vs. Digital Wallets

There will be many similarities between digital wallets and virtual credit cards. Digital wallets, including Google Pay and Apple Pay, will enable users to save their credit card details. Therefore, they can make payments without using their physical cards. A digital wallet can protect the credit card details, like a virtual credit card. 

We can take a simple example. You have Apple Pay on your iPhone. While making payments at a physical or online store, you can scan the phone. Your digital wallet will create a single-use token or a unique number. Hence, it will not reveal the credit card numbers of users. More importantly, a digital wallet can store many debit and credit cards information. Besides, users can add their virtual cards to digital wallets.

Who Should Get a Virtual Credit Card?

Virtual credit cards can be the best for all those who shop online. You can use a virtual credit card to make online purchases without using your credit card details. Also, you can consider having one if you are a frequent global traveler. You can check the features and benefits of cards to find a suitable one.

Are Virtual Credit Cards Safe?

Yes, a virtual credit card is safe. You can get similar features to your regular credit cards. It will feature zero-liability protection and offer additional security while making online purchases. 

Author Bio

User
Mohamed Konate

Mohamed Konate is a personal finance expert, blogger, and marketing consultant based out of Toronto. He is a former financial services professional who worked for many years at major Canadian financial institutions where he managed the marketing strategy around various financial products ranging from credit cards to lines of credit. Mohamed is passionate about personal finance and holds a Bachelor in Business Administration from the University of Quebec (Montreal) and a Master in International Business from the University of Sherbrooke (Quebec).He is also the author of the Canadian Credit Card Guidebook.

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