A CPA Canada’s 2020 Fraud Survey found that 18% of its respondents suffered from credit card fraud. It’s understandable to be a bit anxious about using your regular credit card for online shopping or travelling.
Fortunately, virtual credit cards have become a popular method to enjoy the convenience of credit cards while minimizing the exposure you have to fraudsters.
It also allows those with bad credit scores a way to obtain a credit card.
As someone who travels outside of Canada extensively, I wanted to find a simple solution to this problem of safe credit card use.
I did a lot of research into the best virtual credit cards in Canada, which you can find below.
Top Picks for the Best Virtual Credit Card in Canada
Best Free Card
|KOHO Card||Get KOHO For Free|
Best Paid/Travel Card
|KOHO Premium Card||Get KOHO Premium|
See the other picks below.
What Is A Virtual Credit Card?
As its name suggests, a virtual credit card is a digital credit card that you can use 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 allow users to protect their identity or personal information while making purchases without worrying about their data falling into the wrong hands.
Virtual credit cards are attached to your main account, but protect your account information from data breaches, fraudulent uses, and other compromises.
The card will usually come in a physical form as well, which will be mailed to you after you register. You can also set up your virtual credit card on your devices such as Apple Pay or Google Pay (for most companies), so you won’t have to physically carry the card.
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.
Pros and Cons of Virtual Credit Cards
- No Credit Check Needed
- Better Protection Against Fraud
- Easy to Sign Up
- Can’t Borrow Money
- Can’t Build Credit (Unless it’s the KOHO card, see below)
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 – Best Free Overall Card
Prepaid Visa Card
- 0.5% Minimum CashBack
- 1.5% Foreign Exchange Transaction Fee
- Earn High-Interest Savings
- Credit Build Option
- No Credit Check Needed
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.
One killer feature I love about KOHO is that it has high-interest savings, where you can earn 1.20% on your savings and spending account. This is over 30 times as much as many of the big banks in Canada.
Another fantastic KOHO option is that you can build your credit, by signing up for its Credit Builder feature for $7/month. This is a great option for those who can’t obtain a regular credit card due to poor credit, and want to build it back up.
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 also send unlimited e-transfers from your KOHO account, and earn rewards bonuses for shopping with select merchants.
KOHO has so many features that go above and beyond the normal virtual credit card, which is why I made it my #1 pick.
2. KOHO Premium Prepaid Visa – Best Paid Card
Prepaid Visa Card
- 2.0% CashBack on Groceries, Restaurants, and Transportation
- 0.5% CashBack on everything else
- Low $9/Month Fee
- 0% Foreign Exchange Transaction Fee
- Credit Build Option
- No Credit Check Needed
The KOHO Premium card has all of the fantastic features of the regular KOHO card, but it costs $9/month (or $84/year). So what do you get for this extra cost? Quite a lot.
Main differences between Koho Regular and Koho Premium:
Instead of 0.5% Cashback for all transactions, you get 2% CashBack on all grocery, gas, restaurant, and transit purchases. The card also offers you 0.5% cashback on all other purchases.
Instead of a 1.5% foreign exchange transaction fee, with KOHO premium you get 0% foreign exchange transaction fees.
Based on these upgrades, this means that if you are planning to spend about $600 per month on your KOHO card, it’s probably worth it to upgrade to Premium.
And if you are planning to travel outside of Canada and use your credit card, I would say that it’s almost always better for you to choose KOHO premium because of the 0% foreign exchange transaction fee, which is a huge bonus as this can add up.
These two additional features push KOHO premium to my top choice for the best paid virtual credit in Canada.
3. Wealthsimple Cash Card – Best Free CashBack
- 1% CashBack
- 0% Foreign Transaction Fee From Wealthsimple (Visa will still charge you a fee)
- No Annual Fees
For a free cashback card, Wealthsimple Cash is great. It gives you 1% cashback on all purchases made. A nice feature is that you don’t need to take it in cash if you don’t want to. You can choose cash, invest in stocks, ETFs, or crypto.
Note that a lot of other reviews about this card claim that there are no foreign exchange transaction fees, but this is a bit misleading.
You will get charged by Visa for FX fees if you use it outside of Canada, so it isn’t a true no FX fee credit card.
Because of this, I don’t think it’s the best card for travel, but it’s great if you just simply want some cashback.
4. Wise Card – Best For Sending Money Abroad
- Send and receive money in over 50 currencies
- Very cheap way to send money to over 200 countries.
- Transparent transfer fees
- 2 free ATM withdrawals overseas, up to $350 CAD/month
- No foreign transaction fees
Wise Card is a great alternative to having a bank account overseas. You can send and receive money in local currencies in almost any country you travel to, and you can withdraw in local currencies as well.
Start by opening up a Wise account, deposit some money in, and convert to any currency you want for a very transparent fee. Comparing it to other alternatives such as big banks or Paypal, your currency exchange fees will be much lower.
There’s no cashback though, so if you were looking for that this card won’t have it.
Wise Card is like a hybrid between an international bank card, and a prepaid Visa credit card. It’s great for travelling also, as there are no foreign transaction fees.
Start by opening up a Wise account for free here, then request the credit card.
5. MogoCard – Best Security Card
- Free identity fraud protection
- Free credit score monitoring
- Freeze your credit card instantly if lost or stolen
- Unique rewards such as tree planting
If you’re worried about security, MogoCard is a great choice. It comes with security features such as credit score monitoring, identity fraud protection, and you can also instantly freeze your card using the app.
There are also unique rewards such as one tree being planted for every transaction you make on the card.
However, it doesn’t have cashback and has high FX fees, so for me, the main reason to get this card would be for security and credit score monitoring. You can sign up for Mogocard here.
6. Stack Prepaid Mastercard – Former Best Travel Card
- No-fee prepaid card
- Offers instant cashback with over 140 retailers
- Offers zero liability protection
Stack 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.
I used to have Stack a lot higher in the rankings, but they have removed their no-fee foreign transaction feature. This was a killer feature, and it was unfortunate to see them remove it.
It’s a cautionary tale that credit card features can change, so keep an eye out for the ones you use.
7. RBC Virtual Visa Debit Card
- 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.
Compared to other cards on this list, I’d only recommend this card if you already have an existing RBC bank account.
Virtual credit card is a bit of a confusing term, as it usually can be used both as a physical card in person, and online.
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 will get an expiration date for your virtual card and can also 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.
- Preload your card with money.
- 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.
- You can also connect with Apple Pay and Google Pay for most of the 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.
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.
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 like Apple Pay 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.
Most virtual credit cards come free of charge because they are linked to your existing bank accounts.
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.
1) Where can I use virtual credit cards?
You can use your virtual credit card for online purchases with any online retailer that accept the payment method in Canada and other countries.
2) Can I use my virtual credit card in Canada like a normal credit card?
Yes, in most cases you can use a virtual credit card like a normal credit card, as a physical card will be shipped out to you.
3) What information does my virtual credit card contain?
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.
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.
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.
If you’re interested in other regular credit cards, check out this Tangerine Cashback No-Fee Credit Card review.