A virtual credit card is a unique one-time-use number that's generated by the issuer of your existing physical credit card. That way, if the card information is stolen, your entire credit card account isn't compromised because hackers can't reuse the number.
Online shopping remains very popular, but there are risks. Fortunately, there are ways to layer your security to reduce the risk of your account falling victim to data breaches or hackers. Using a virtual credit card is just one of these layers of defence.
This article lays out the differences between virtual cards and digital wallets, plus explains how to access your own virtual credit card.
Key Takeaways
- A virtual credit card is a single-use card number generated by your card issuer when you make an online purchase.
- Masking your true credit card number protects it from fraud.
- Virtual credit cards aren’t the same as virtual wallets, which store your actual credit card number for digital transactions.
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What are virtual credit cards?
A virtual credit card is a unique credit card number that's generated by your credit card issuer so that you can make an online purchase. It masks your true credit card number and only works once, keeping your account secure from data breaches, fraudulent use, and other compromises.
If you're concerned about your digital security, you'll naturally want to know if virtual credit cards are safe. Since they're only used once and not directly tied to your credit card, they're actually safer than using your true credit card number. The merchant never has access to your real credit card number, expiration date, or CVV code.
How virtual credit cards work
When you shop online, you can use your virtual card instead of a physical credit card. Your credit card issuer will generate a single-use number for the transaction. This way, if the merchant is hacked, your credit card won't be compromised.
Tap the virtual card to get the details you need to complete your purchase. You can also freeze these cards quite easily if you're not using them.
Here are a couple of examples from KOHO and American Express. Amex is a true virtual card, while KOHO is a physical card in a digital wallet.
The Amex card shares a virtual account number with the merchant when you make a purchase using your mobile wallet.
Virtual credit card vs. digital wallet
We should be clear – even though the terms are often used interchangeably, a virtual card is not the same as a digital wallet.
A digital wallet is a place to store any number of personal finance cards, such as credit cards, debit cards, and rewards program cards. They can also carry items such as airline boarding passes and even vaccination records.
Unlike virtual card numbers, the card numbers in your digital wallet are the same as the ones on your physical cards.
A virtual card has its own unique number, different from your physical credit card, even though it's tied to the same account. When you make an online purchase, the merchant never has access to your actual account number – they only see the virtual credit card number generated specifically for that transaction.
Both of these products are designed to offer an extra layer of security; they just protect your account in different ways.
How to get a virtual credit card
You can choose to get a virtual credit card by applying for one – the KOHO Essential Mastercard or Wealthsimple Prepaid Mastercard are two top options. These are prepaid credit cards, as most virtual credit cards are. As noted above, they're also technically digital wallets.
All of Neo Financial's cards come with virtual credit cards, and approved users are given access to their virtual card immediately.
Aside from prepaid cards, some credit card issuers provide a temporary virtual card for you to use once you've been approved for a typical card. Different issuers have different policies about this, but Wealthsimple offers instant approval and near-instant access to your virtual credit card. Your physical card will be sent to you in the mail.
There are also a few banks and issuers that provide virtual credit cards only for commercial and/or business clients. RBC, for instance, has an RBC Commercial credit card program that allows clients to create single or multiple-use virtual credit cards for their employees.
Even if your credit card issuer doesn't offer a virtual credit card, you almost always have the option of adding it to a digital wallet.
Pros and cons of virtual credit cards in Canada
As you can probably guess, there are benefits and drawbacks to using virtual credit cards. Here are some things to keep in mind:
- You can often begin using the virtual card as soon as your account is opened
- Your account is more secure when you're shopping online
- You don't have to worry about data breaches when using the card
- You can set spending limits
- You can still enjoy credit card rewards, track your spending, and enjoy purchase protections
- You can't use virtual cards for in-store purchases (but you can use your mobile wallet)
- Only select financial institutions/issuers offer virtual credit cards
Who offers virtual credit cards in Canada?
While almost every issuer's cards will have a virtual version generated when they're added to your Google Pay, Apple Pay, or other digital wallets, most don't allow you to generate your own virtual credit cards on demand.
There are a few options that offer virtual cards that can be added to your digital wallet, but they don't generate one-time use numbers the way a true virtual credit card does.
Note that you can add any Neo Financial credit card to your digital wallet, but we specifically wanted to showcase the best Neo card here.
| Credit card | Annual fee | Rewards | Special features |
|---|---|---|---|
| KOHO Essential Mastercard | $48 | * 1% cash back on groceries, restaurants, and transportation | * Earn bonus rewards at select merchant partners * Low 1.5% foreign transaction fee on non-CAD purchases * Earn 2% interest on your balance |
| Wealthsimple Prepaid Mastercard | $0 | * None | * No foreign transaction fees * Earn up to 2.25% interest on your balance |
| Neo World Elite Mastercard | $125 | * Average of 5% cash back at partner retailers * 5% cash back on groceries, up to $1,000 spent monthly * 4% cash back on recurring bills, up to $500 spent monthly * 3% cash back on gas and EV charging, up to $1,000 spent monthly * 1% cash back everywhere else | * Earns up to 5% back with retail partners * Redeem cash back whenever you like |
Koho virtual card: KOHO Essential Mastercard
$80 GeniusCash + Up to 1% cash back on purchases + 2% interest on your balance.*
The KOHO Essential Mastercard is a top prepaid credit card in Canada, with a number of useful features. First, you'll earn cash back on all your spending, including:
- 1% cash back on groceries, restaurants, and transportation
You can also earn bonus rewards when shopping with KOHO merchant partners, which can boost your earn rate and help you save even more.
Once you have a KOHO account, you can subscribe to KOHO Earn Interest. This service turns your KOHO account into a high interest savings account where you'll earn 2% interest on your account balance.
Wealthsimple virtual card: Wealthsimple Prepaid Mastercard
×1 Award winner 
The Wealthsimple Prepaid Mastercard keeps things, well, simple. While it doesn't earn any annual rewards, it's a great card for making purchases in currencies other than Canadian Dollars, as it doesn't charge foreign exchange fees.
You can also earn up to 2.25% interest on your balance. Your exact rate will vary depending on whether you have set up direct deposit and how much money you have with Wealthsimple.
Neo virtual card: Neo World Elite Mastercard
While all Neo cards give you access to a virtual credit card that can be added to your digital wallet, the Neo World Elite Mastercard is the best of the bunch. Users earn an average of 5% cash back from Neo partners, and this can be redeemed at any time. The card also comes with premium World Elite benefits, like concierge service and exclusive event access.
Keep in mind that Neo doesn't generate a single-use virtual credit card. However, if you choose a Neo credit card, you can freeze and unfreeze the virtual card in your wallet at any time, or even deactivate it.
FAQ
How do I get a virtual credit card?
You can get a virtual credit card by applying for and getting approved for a prepaid credit card. You may also get one by applying for and being approved for a typical credit card that provides a virtual option while you wait for the physical card to arrive in the mail. Some banks offer virtual cards for corporate clients.
Are virtual credit cards a good idea?
Yes, since virtual cards use a randomly generated card number that's only valid for that one transaction, they provide an excellent way to protect your unique credit card details. Adding layers of security to online purchases is always a good idea.
Are virtual credit cards safe?
Yes, virtual cards are very safe. In fact, it's safer to use a virtual credit card for online transactions since the issuer generates a one-time-use number in order for the transaction to process. This way, merchants don't get your actual card details.
Are there any instant virtual credit cards in Canada?
When you apply for a new credit card, many issuers give you immediate access to a virtual card that you can add to your digital wallet. However, if you want a truly virtual card with a one-time use number, you'll typically have to use a prepaid card, like the KOHO Essential Mastercard or Wealthsimple Prepaid Mastercard.
What banks offer a virtual card?
Most big banks don't offer virtual credit cards. Instead, they might allow you to connect your credit card account to your digital wallet, which stores your exact credit card details. You can use these virtual cards to pay for online purchases, or tap your phone to pay for in-person purchases.
Can I get a virtual credit card from RBC?
RBC offers a true virtual credit card for commercial or business purposes – unfortunately, you can't get a single-use virtual card for a personal credit card account. You can add your RBC credit card to your digital wallet, though.
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