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?
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 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 Cards 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.
KOHO Account
Koho offers four different accounts with virtual cards. Depending on your needs and finances, one account may be better suited to you than the others.
KOHO Easy Account
The KOHO Easy 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 you’d be hard-pressed to find elsewhere, all with no annual fee.
- Fees. There are no annual fees for the KOHO Easy Account.
- Cash Back – Earn 1% cash back on groceries and transportation (gas, parking, rideshare apps, etc.). Plus, up to 5% extra cashback with participating merchants.
- Low FX fee. You’ll pay just 1.5% in foreign currency transaction fees instead of 2.5%, which is the standard cost with most other credit cards.
- Earn interest. Earn 0.50% savings interest on your entire KOHO account balance.
- Free app. KOHO’s app comes with budgeting tools and transaction insights to help you better manage your spending.
- Credit building service. When you open a KOHO Easy Account, you can subscribe to KOHO’s Credit Building service for a monthly fee of $10. It can help you build your credit history which may positively affect your credit scores.
KOHO Essential Account
For a monthly fee of $4 or an annual fee of $48 annual, you can upgrade to the KOHO Essential Account. With this account, you’d get the same benefits as the first plus the following perks:
- More Cash Back – Earn 1% cash back on groceries, transportation (gas, parking, rideshare apps, etc.), and eating and drinking. Plus, earn 0.25% cash back on all other purchases and up to 5% extra cash back with participating merchants.
- Higher Interest – Instead of 0.50% savings interest, you’ll earn 1.5% on your entire balance.
- Credit Building Service Discount – With the KOHO Essential account, you’ll be able to subscribe to the credit building service at a discounted rate of $7 a month.
KOHO Extra Account
For a monthly fee of $9 or an annual fee of $84, you can upgrade to the KOHO Extra Account. With your virtual KOHO Extra Account, you’ll be able to enjoy the same benefits as the other two KOHO accounts, plus other perks including:
- Higher Cash Back – Earn 2% cash back on groceries, transportation (gas, parking, rideshare apps, etc.), and eating and drinking. Plus, earn 0.50% cash back on all other purchases and up to 5% extra cash back with partnered merchants.
- Earn Interest – You’ll earn 2% on your entire balance.
- Credit Building Service Discount – Same as the KOHO Essential account, you’ll be able to subscribe to the credit building service at a discounted rate of $7 a month.
- No FX fees. The foreign currency transaction fee is completely waived with this account.
- Free monthly international ATM withdrawals. Get 1 free international ATM withdrawal every month.
KOHO Everything Account
For a $19 monthly fee, you can upgrade to the KOHO Everything Account. With this account, you’ll be able to take advantage of even more perks.
- High Cash Back Rate – Earn 2% cash back on groceries, transportation (gas, parking, rideshare apps, etc.), and eating and drinking. Plus, earn 0.50% cash back on all other purchases and up to 5% extra cash back with partnered merchants.
- Earn More Interest – You’ll earn 4% on your entire balance.
- Credit Building Service Discount – You can subscribe to the credit building service at a discounted rate of $5 a month.
- No FX fees. The foreign currency transaction fee is completely waived with this account.
- Free monthly international ATM withdrawals. Get 1 free international ATM withdrawal every month.
STACK Prepaid Mastercard
The STACK Prepaid Mastercard is a free virtual card that lets you load funds onto your account and use it to shop similar to the same way you would use a regular credit card. With the STACK virtual prepaid Mastercard, you can earn cash back rewards with participating retailers. Moreover, there are no annual or monthly fees and you can have your foreign currency transaction fees waived if you spend a minimum of $350.
There’s also the STACK Prepaid Mastercard mobile app available that lets you keep tabs on your spending and manage your finances, as well as a unique savings feature that allows you to automatically put aside a small amount into a savings account.
STACK Prepaid Mastercard Features
- Cash back. Earn cash back rewards at more than 140 retailers.
- No FX fees. Avoid paying foreign currency transaction fees when abroad, as long as you spend at least $350 per month.
- Free spending tracker. Keep your finances in check with STACK’s free spending tracker feature.
- Automatic savings feature. Set a little money aside every month automatically to help boost your savings.
- Early access to your paycheque. Get paid from work 2 days early, as long as you have direct payroll in your account.
- Fees: $0
- Transaction Limits:
- Maximum $20,000 card balance
- Maximum $2,500 per bill payment
- Maximum $500 per ATM transaction
Check out the difference between the STACK Mastercard and KOHO Visa card.
RBC Virtual Visa Debit
RBC clients can apply for the RBC Virtual Visa Debit Card, a no-fee card that exists on your mobile device and is used to make purchases online or in-store. Since it’s a debit card, all purchases are directly charged to your account, so you won’t be at risk of racking up credit card debt.
Virtual Visa Debit Features
- Security. RBC Virtual Visa Debit includes security features like Zero Liability, Visa Secure, and address verification.
- Recurring payments. Set up recurring payments with your RBC Virtual Visa Debit card.
- Fees: $0
- Transaction Limits. Your daily limits are detailed in the letter you get with your reference card
Wealthsimple Cash Card
The Wealthsimple Cash Card is a no-fee prepaid Visa card that can be used with the Wealthsimple Cash App to instantly send money transfers in Canada. You’ll earn 1% cash back on all purchases and add your earnings to your balance; otherwise, you can invest it using your Wealthsimple Trade account. Add the Wealthsimple virtual card to your Apple Pay, Google Pay or Samsung Pay wallets for convenient in-store spending.
Wealthsimple Cash Card Features
- Cash Back. Earn 1% cash back on all purchases when you use your card to pay for purchases.
- ATM Withdrawals. Use the physical Wealthsimple Cash Card like a debit card to withdraw funds at ATMs.
- Compatible With Popular Digital Wallets. The Wealthsimple Cash Card works with Apple, Google Play, and Samsung.
- No FX Fees. There are no foreign currency transaction fees when you pay using currencies other than CAD.
- Fees: $0
- Transaction Limits
- Maximum $10,000 spending limit per day
- Maximum $500 per ATM withdrawal and $1,000 per day
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, which is why it’s a great option for those who travel a lot. The card can’t be lost or stolen and can easily be freezed.
Probably the feature that makes the Wise virtual card stand out among the competition is it’s available to hold up to 50 currencies at once. Users will have a Wise account and be able to 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
- 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.
- Compatible With Apple Pay And Google Pay. The Wise Virtual Card can be integrated with your digital wallet to make shopping convenient.
- Freeze Your Account. If you notice any suspicious activity, quickly freeze your account with one simple click of a button.
- Fees: $0
- Transaction Limits
- Maximum $2,650 ATM withdrawal limit per day
- Maximum $17,500 limit for online payments per day
Additional Reading
Pros And Cons Of Virtual Credit Cards
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.
Pros
- 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.
Cons
- 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.
- 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.
Virtual Credit Card FAQs
What’s the difference between a virtual and regular credit card?
Are virtual credit cards safe?
Do any of the big five banks offer virtual credit cards?
Do I need a digital wallet to use a virtual credit card?
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.
