How great would it be to complete an online payment without having to reach for your wallet to grab your credit card? With a virtual credit card, you can quickly and easily shop online without the need for a physical credit card. And if you add your virtual card to your digital wallet, you can shop in person, too.
So, how does a virtual credit card work, and is it something you should consider using when you shop? In this article, we’ll go over some of the virtual credit card options available in Canada.
What Is A Virtual Credit Card In Canada?
A virtual credit card is a unique credit card number that’s automatically generated and can be used for payment while keeping your physical credit card number safe. While designed for online shopping, virtual credit cards can also be used to shop in-store when added to a digital wallet.
How Does A Virtual Credit Card In Canada Work?
When you make a purchase, your credit card issuer will automatically generate a random and temporary credit card number and expiration date to facilitate the payment, instead of your using your actual credit card information. While you use the virtual card, the transactions will still appear on your credit card account as they normally would when you use your credit card.
Best Virtual Credit Card In Canada
There are plenty of virtual credit cards available from banks and fintech companies in Canada. Here are some of the best ones, along with their features, fees, and transaction limits to help you decide which one best suits your
needs.
| Annual Fee | Best Features | |
| KOHO Essential | $48 yearly or $4 monthly | – 1% cash back on groceries, eating & drinking, and transportation – Up to 50% extra cashback from select merchants – Earn up to 5% savings interest – Optional credit building feature for $10/month |
| KOHO Extra | $84 yearly or $9 monthly | – 1.5% cash back on groceries, eating & drinking, and transportation – Up to 50% extra cashback from select merchants – Earn 5% savings interest – Optional credit building feature for $7/month |
| KOHO Everything | $19 monthly | – 2% cash back on groceries, eating & drinking, and transportation – Up to 50% extra cashback from select merchants – Earn 5% savings interest – Optional credit building feature for $5/month |
| Wealthsimple Prepaid Mastercard | $0 | – Earn 1% cash back, stock or crypto – No FX fees |
| Joker Prepaid Mastercard | $7.95 (one time purchase charge) | – Earn up to 5% cash back |
| RBC Virtual Visa Debit Card | $0 | $7.95 (one-time purchase charge) |
| Wise Virtual Card | $0 | – No FX Fees- Freeze your card anytime |
KOHO Essential Account
The KOHO Essential Account is a free spending and saving account that can be accessed virtually via KOHO’s app. Users can use this virtual card to shop, save, budget and earn cash back. Plus, it comes with a variety of other features that benefit many Canadians.
Use code LOANSCANADA when you sign up for a KOHO account and get $40 FREE when you add funds to your account.
KOHO Essential Account Features
Annual fee: $48 yearly or $4 monthly
- No monthly fee if you set up a direct deposit or contribute $1000 per month.
Cash back earn rate:
- Earn 1% cash back on groceries, transportation (gas, parking, rideshare apps, etc.), and eating and drinking.
- Earn up to 50% extra cash back with participating merchants.
Extra features:
- Earn 3.5% savings interest on your entire KOHO account balance.
- Subscribe to the credit building service at a discounted rate of $10 a month.
- Get your credit score for free in-app.
KOHO Extra Account
The KOHO Extra Account also has a monthly fee but comes with even more perks than the Essential Account.
Annual fee: $84 yearly or $9 monthly.
Cash back earn rate:
- Earn 1.5% cash back on groceries, transportation (gas, parking, rideshare apps, etc.), and eating and drinking.
- Earn 0.25% cash back on all other purchases.
- Earn up to 50% extra cash back with partnered merchants.
Extra features:
- Earn 4% savings interest on your entire KOHO account balance.
- Subscribe to the credit building service at a discounted rate of $7 a month.
- No foreign currency transaction fees.
- 1 free international ATM withdrawal every month.
- Get your credit score for free in-app.
KOHO Everything Account
The KOHO Everything Account comes with the highest monthly fee but also comes with the most features and benefits.
KOHO Everything Account Features
Annual fee: $19 monthly
Cash back earn rate:
- Earn 2% cash back on groceries, transportation (gas, parking, rideshare apps, etc.), and eating and drinking.
- Earn 0.50% cash back on all other purchases.
- Earn up to 50% extra cash back with partnered merchants.
Extra features:
- Earn 5% savings interest on your entire KOHO account balance.
- Subscribe to the credit building service at a discounted rate of $5 a month.
- No foreign currency transaction fees.
- 1 free international ATM withdrawal every month.
- Get your credit score for free in-app.
Wealthsimple Cash Card
The Wealthsimple Cash Card is a no-fee prepaid Visa card that allows you to spend money directly from your Wealthsimple Cash account. You can use the digital card via your Wealthsimple app to spend money in-store, online or abroad, so long as the merchant accepts Mastercard.
Moreover, you’ll earn 1% cash back, stock or crypto on all purchases and earn 4.5% interest on your account balance (if you meet their account balance threshold of $100,000).
Wealthsimple Cash Card Features
Annual Fee – There are no annual or monthly fees.
Compatibility – You can add the Wealthsimple virtual card to your Apple Pay, Google Pay or Samsung Pay wallets for convenient in-store spending.
Extra Features
- Earn Cash Back. Earn 1% cash back, stock or crypto on all purchases when you use your card to pay for purchases.
- ATM Withdrawals. Use can use the physical Wealthsimple Cash Card like a debit card to withdraw funds at ATMs.
- No FX Fees. There are no foreign currency transaction fees when you pay using currencies other than CAD.
Joker Prepaid Mastercard
The Joker Prepaid Mastercard comes in both a physical and digital format. You can use the virtual one to make purchases online wherever Mastercard is accepted. To make a purchase online you’ll need your 16-digit card number along with your CVV2 code and expiry date.
Joker Prepaid Mastercard Features
Annual Fee – There is a one time purchase fee of $7.95.
Compatibility – You can only use the card to make online purchases by inputting your card details during checkout.
Extra Features
- Cash back – When you purchase a select stores, you can earn up to 5% cash back.
- Safe – There’s very little data needed to get a virtual Joker card. This makes it incredibly secure as there’s no risk of your data being stolen when you use the card to shop online.
- No debt – Since this is a non-reloadable prepaid Mastercard, you don’t have to worry about going over budget or into debt. The amount you load onto your card is the maximum you can use.
RBC Virtual Visa Debit
If you have an RBC bank account, you can apply for the RBC Virtual Visa Debit card. With it, you can make purchases online like you would a regular credit card. However, since it’s a debit card, all purchases are directly charged to your RBC bank account, so you won’t be at risk of racking up credit card debt.
You can access your virtual card through the RBC mobile app and use it to make purchases anywhere Visa is accepted.
RBC Virtual Visa Debit Features
Annual Fee – There are no annual or monthly fees.
Compatibility –
Extra Features
- Security. The RBC Virtual Visa Debit includes security features like Zero Liability, Visa Secure, and address verification.
- Recurring payments. You can set up recurring payments with your RBC Virtual Visa Debit card.
Wise Virtual Card
The Wise virtual card exists only on your mobile device or laptop and can be used to shop online, in-store, and even abroad. The virtual card is a safer alternative to a traditional physical card, as you can freeze it after any purchase. This makes it a great option for those who travel a lot.
The feature that makes the Wise virtual debit card stand out among the competition is its ability to hold 40+ currencies at once. Users can use the Wise app to convert currencies in real time. Use their Wise virtual card to make purchases directly in the currency of your choosing, so you save on currency conversion fees.
Wise Virtual Card Features
Annual Fee – Free for all users with Wise accounts.
Compatibility – You can add your Wise card to Apple Pay and Google Pay in Canada. The Wise Virtual Card can be integrated with these digital wallets to make shopping convenient.
Extra Features
- No FX Fees. Make payments directly in over 50 currencies to avoid foreign currency transaction fees.
- Multiple Virtual Cards. You can have as many as three virtual cards at a time.
- Freeze Your Account. If you notice any suspicious activity, you can quickly freeze your account through your Wise account.
Looking for the best credit card options?
Advantages And Disadvantages Of A Virtual Credit Card In Canada
Virtual credit cards come with a few key perks, including the ability to spend without carrying a physical card. But there are also a couple of drawbacks to consider before swapping your regular cards for something digital.
Advantages Of A Virtual Credit Card In Canada
- Quick Use. Once you apply for a virtual credit card and are approved to start using your account, you can start making purchases right away rather than wait around for days for the physical version to arrive.
- Safer. Since there’s no physical card involved, there’s no chance of losing your virtual credit card. And if you believe that your account has been compromised, you can freeze your account right away with one click.
- Credit Card-Like Benefits. Use your virtual credit card much like you would a traditional card while taking advantage of similar perks, such as cash back rewards (depending on the card).
- Good For Budgeting. Certain virtual credit cards place spending restrictions on accounts, so when you reach your limit, you can’t access funds through the card anymore. This helps you prevent overspending and keeps your budget in check.
- Often Free. Unlike many traditional credit cards, virtual credit cards don’t typically charge an annual fee.
Disadvantages Of A Virtual Credit Card In Canada
- Some Won’t Help Build Credit. If your virtual card is a prepaid credit card, it won’t help you build credit.
- Can’t Use In-Store Unless You Have A Digital Wallet. Virtual credit cards are meant to make online purchases, which means they can’t be used directly in-store. If you want to use it in-person, you’ll need to add it to a digital wallet.
- May Expire Sooner. Unlike regular credit cards that tend to expire after 3 to 4 years from the date of issue, virtual credit cards typically expire up to 1 year after it’s been created.
Final Thoughts
Virtual credit cards make it easy to shop online and in-store through a digital wallet. Even if you forget your wallet at home, you can still make payments when out shopping in-store with your mobile device.
