4 Best Virtual Credit Cards in Canada: Go Digital (2022)

Nowadays, it seems like you can buy just about anything online. Considering the convenience that comes with online purchases, I don’t expect myself to go to the store to make most of my purchases anymore.

Unfortunately, online shopping comes with the drawback of security issues. Cybersecurity threats and data breaches have increased in recent years. While most banks offer top-notch security, identity theft is becoming rampant.

A CPA Canada’s 2020 Fraud Survey found that 18% of its respondents suffered credit card fraud. It’s understandable to be a bit anxious about using your regular credit card for online shopping.

Fortunately, virtual credit cards have become a popular method to enjoy the convenience of online shopping while minimizing the amount of personal information you share online.

Virtual credit cards allow users to protect their identity or personal information while making online purchases without worrying about their data falling into the wrong hands. Several financial institutions are offering virtual credit cards in Canada. The only question is: Which one is the best?

This post will tell you what you need to know about virtual credit cards and provide a list of the best virtual credit cards in Canada to help you make a well-informed decision.

Best Virtual Credit Cards in Canada

What Is A Virtual Credit Card?

As its name suggests, a virtual credit card is a digital credit card that only exists online. It is a unique credit card that lets you make online transactions on your credit card without sharing your primary credit card information.

Virtual credit cards ensure your information’s safety. While limited to online use, virtual credit cards are an excellent safety measure that helps to reduce the risk of fraud.

Virtual credit cards are attached to your main account, but protect your account information from data breaches, fraudulent uses, and other compromises.

How Do Virtual Credit Cards Work?

Most online retail stores and merchants store their customers’ payment information. Merchants and retailers store the information to make the shopping experience more convenient for their customers. By storing the payment information, online merchants can eliminate the process of reentering information for each transaction.

As convenient as that can be, it leaves the data vulnerable to hackers who are always looking to gain access to this data. In the event of a data breach, hackers can steal information pertaining to your identity and credit card and use it to commit fraud.

Virtual credit cards provide an ideal solution to this problem. As an online shopper, each time you make an online purchase, the virtual credit card provides you with unique and dynamic credit card information for each online transaction you make.

Since each transaction has its own generated set of numbers, the storage and theft of this information are completely useless to hackers.

The Best Virtual Credit Cards In Canada

Virtual cards have been available in Canada for several years now. You might be able to get a virtual credit card through the bank or financial institution that issued your regular credit card, provided that they offer virtual credit cards. Several major e-commerce sites also issue and accept virtual credit cards.

Another way you can get a virtual credit card is through a third-party card service provider. This section of my guide will give you a list of the best virtual credit cards in Canada that you can use to protect your primary credit card and personal information from data breaches and hackers.

1. KOHO Prepaid Visa

KOHO logo
  • Offers 0.5% cashback on all purchases
  • Rewards bonuses for shopping with select merchants
  • Offers savings on foreign transaction fees
  • Free of charge
  • Accept e-transfers into your Koho account

The KOHO Prepaid Visa card is a free virtual card that lets you earn cashback on all your spending and it awards you bonus rewards when shopping from selected merchants. The KOHO Prepaid Visa card comes with a flat 0.5% cashback on all your purchases made using the virtual card.

The card also lets you save some money on foreign transaction fees because the card only charges 1.5% instead of the typical 2.5%. You can create a virtual Visa card using your KOHO account to facilitate online purchases without exposing your personal identity and primary credit card information.

2. KOHO Premium Prepaid Visa

KOHO logo
  • Offers 2% cashback on select purchases
  • Offers 0.5% cashback on all other purchases
  • Offers 0% foreign transaction fees
  • Offers the opportunity to create a high-interest savings account
  • Accept e-transfers into your Koho account

The KOHO Premium Prepaid Visa card is one of the best prepaid credit cards in Canada that comes with a variety of useful features. You get 2% cashback on all grocery, gas, restaurant, and transit purchases. The card also offers you 0.5% cashback on all other purchases. The KOHO Premium Prepaid Visa card comes with 0% foreign transaction fees.

You can also opt into KOHO Earn Interest that turns your KOHO account into a high-interest savings account that pays you at a high-interest rate. The card also lets you create a virtual credit card that you can use for online purchases instead of entering your primary credit card information on merchant websites.

3. Stack Prepaid Mastercard

stack logo
  • No-fee prepaid card
  • Offers instant cashback with over 140 retailers
  • Comes with zero foreign transaction fees
  • Offers zero liability protection

The Stack Mastercard is a no-fee prepaid card that also gives you access to a virtual prepaid credit card. This is a simpler prepaid card that does not earn base rewards for all your purchases. However, you can earn bonus rewards with over 140 select Stack Mastercard retail partners.

You can also use the STACK Finance app on your smartphone to see your weekly spending habits and get a better picture of your finances, allowing you to manage your spending much better. The card comes with zero liability protection and you get the ability to freeze your account at any time.

4. RBC Virtual Visa Debit Card

rbc bank logo
  • Made by a reputable financial institution
  • A safe and secure method for online payments
  • Funds are debited directly from your RBC bank account.

The RBC Virtual Visa Debit card is a smart and safe way for you to pay for online, telephone, and mail order purchases by debiting funds directly from your RBC bank account. It requires the prerequisite of being a customer with RBC bank. Issued by one of the most significant financial institutions in Canada, it is an ideal way to shop online with the added peace of mind that your information is safe and secure.

The RBC Virtual Visa Debit card does not come with the benefits of credit card transactions like cashback or discounts with select retailers. However, you can use the virtual card for all online retailers that accept Visa payments.

How To Use Your Virtual Credit Cards

An important thing to remember about virtual cards is that they are designed to be used online or over-the-phone transactions. It means that whenever you are checking out of a merchant’s website for your online purchases, you will need to open your virtual credit card issuer’s website. Some virtual credit card providers offer provisions for browser extensions that support virtual credit cards.

You are expected to log into the website and generate a one-time password. This contains a unique credit card number and security code. You can set an expiration date for your virtual card and set a spending limit on the card.

Here is a quick look at what you effectively have to do to use your virtual credit card:

  • Sign up with a virtual credit card issuer of your choice to obtain your virtual card details. The details include your card number, validity date, and CVV.
  • Make your online purchases and use the information provided by the virtual credit card issuer when you check out instead of the normal credit card details.
  • Submit the payment and complete your transactions.
  • The funds will automatically be deducted from the account linked to your virtual credit card.

What Are The Benefits Of Using Virtual Credit Cards?

This section of my guide to the best virtual credit cards in Canada will discuss the benefits of using virtual credit cards to help you understand why they present you with a much safer alternative to regular credit cards.

Avoid Issues With Data Breaches

Virtual credit cards add another layer of security to protect your identity and payment information on the merchant’s website. Virtual credit cards come with the same security features as physical credit cards, so they offer adequate protection. In case hackers manage to breach the data for online merchants you shop from, any information that they steal will be effectively useless.

Easy In-Store Shopping

When you add a credit card to your digital wallet on your smartphone or smartwatch, it is typically in the form of a virtual card. Using digital wallets for in-store purchases is convenient because it can be as simple as tapping your device on a terminal. The transactions are secure, straightforward, and easy, and they don’t require you to carry a physical credit card with you.

Free Of Charges

Most virtual credit cards come free of charge because they are linked to your existing bank accounts.

Instant Delivery And Use

Regular credit cards take a long time before they are made and delivered to you. Virtual credit cards offer the advantage of instant registration and you don’t have to wait for the delivery of a physical card before you can start using it. You can receive the virtual card number almost instantly after completing the process to sign up for it and use it to make payments.

FAQs For Virtual Credit Cards In Canada

Q. Where can I use virtual credit cards?

A. You can use your virtual credit card for online purchases with any online retailer that accept the payment method in Canada and other countries.

Q. Can I use my virtual credit card in Canada like a normal credit card?

A. Virtual cards are in digital form. The reference card does not come with a pin, chip, or magnetic strip. It means that you cannot use it as a physical credit card directly for in-store shopping or ATMs. You can use it only for online, over-the-phone transactions, or mail order transactions.

Q. What information does my virtual credit card contain?

A. The information on your virtual credit card includes:

  • A 16-digit virtual credit card number
  • Expiry or validity date
  • 3-digit CVV2 code
  • Name of the account holder

This is all the information you need to enter on merchant websites when you’re making online purchases. Since the virtual credit card offers you unique and dynamic information for your online transactions, any data breach that allows hackers to get access to this information will keep your personal and account information safe.


best virtual credit cards in canada Infographics

Virtual credit cards provide you the benefits of stress-free online shopping, particularly when you’re shopping with a merchant that you are not sure you can entirely trust. You can enjoy the convenience of online shopping with credit cards without the risk of identity theft or data breaches impacting your financial health.

An underrated advantage of virtual credit cards is the ability to set spending limits. This feature is available with most virtual credit cards in Canada and it lets you get better control over your spending habits.

Do you want to learn better ways to save your money? Check out my guide on How To Save Money in Canada to learn how to improve your savings habits.

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Author Bio - Christopher Liew is a CFA Charterholder with 11 years of finance experience and the creator of Wealthawesome.com. Read about how he quit his 6-figure salary career to travel the world here.

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