There are quite a few good virtual credit cards out there, but some stand out above the rest for their cash back rewards, low-to-no foreign exchange fees, and even the option to earn cash back on purchases abroad. I constantly keep up with the latest promo rates and make my recommendations below based on years of experience.
I recommend the KOHO Mastercard Prepaid Card as the #1 virtual credit card in Canada due to its no annual fees, complimentary financial advice, and bonus cash back on online purchases when you refer friends. It is one of the most flexible cards, even abroad, offering cash back on all purchases and zero foreign exchange fees.
What Is A Virtual Credit Card?
Virtual credit cards are temporary, digital credit cards that can be used a limited number of times (usually once) or for a limited amount. To use a virtual credit card, you have to request your credit card issuer to generate for you an Issuer Identification Number (credit card number), an expiration date, and a security code. This number generated is different from your real, physical credit card, and can be used as a credit card. It's a great way to make online purchases without sharing your real information, giving virtual credit cards additional benefits that existing online payment providers like PayPal cannot offer.
Virtual credit cards can be linked to your main account or function as prepaid cards. The most customizable cards allow you to set up spending limits or a number of uses, so you can treat them as disposable cards. This type of card can be a great addition to your credit card collection for extra security when purchasing online, and some virtual cards even offer cash back benefits and discounts on select merchants.
Without further ado, here are the best virtual credit cards Canada has to offer:
The Best Virtual Credit Cards In Canada
- KOHO Mastercard Prepaid Card: Best for promotional cash back rates and no annual fees
- KOHO Premium Reloadable Prepaid Mastercard: Best for no foreign exchange fees and saving tools
- STACK Prepaid Mastercard: Best for travel rewards and CDIC insurance
How Do Virtual Credit Cards Work?
Not all credit card issuers offer virtual credit cards. Virtual cards are functionality that some credit card issuers offer their cardholders; they’re usually designed to be used once for security purposes, so if you make a purchase over an unsecured network, your physical credit card number won’t be compromised. Virtual credit card numbers can’t be traced back to your original credit card number or your bank account.
Most virtual credit cards are compatible with digital wallet services like Google Pay and Apple Pay, and some function like reloadable cards and allow for multiple uses. Some virtual credit cards can be used in-store as well as online.
Pros & Cons Of A Virtual Credit Card
Pros: Why A Virtual Credit Card May Be Worth It
- Virtually immune to fraud; virtual credit cards can’t be stolen or cloned
- Start using your virtual credit card before your physical card is issued
- Create single-use virtual cards, and don’t worry about data breaches
- Easy to generate new virtual card numbers
- You can set spending limits and expiration dates for your virtual card
Cons: Why A Virtual Credit Card May Not Be Worth It
- When requesting a refund, some retailers may have the policy to return the funds to the same account that made the purchase
- Some merchants may require you to verify your credit card number more than once
How To Choose A Virtual Credit Card In Canada
Features And Customization
If you’re specifically looking for a virtual credit card – as opposed to a physical credit card that offers virtual card functionalities – you want it to be as customizable as possible. The best virtual credit cards allow you to set spending limits, a number of uses, or even an expiration date. Virtual cards can help you budget; in that respect, they’re similar to prepaid cards.
If you’re looking to pay off debt, the last thing you want is an annual fee. Some cards offer cash back or other perks to attract customers. Still, those perks usually encourage spending – and if you’re shopping for a balance transfer credit card, you’re probably looking to reduce your spending. Look for a card that charges no annual fee; you can always apply for a dedicated rewards card that will offer better perks.
Personal Or Household Income Requirements
Some credit cards may come with an income requirement ranging from $60,000 to $80,000. These cards tend to require a higher credit score and come with the best benefits. However, this is not the norm: most cash back credit cards have no-or-very-little income requirements.
How To Apply For A Virtual Card In Canada
In Canada, the minimum age to request a credit card is the age of the majority. Teenagers under that age can’t get approved for credit cards but can be added as authorized users to one of their guardian’s or parent’s credit cards. For reference, the age of the majority in Alberta, Manitoba, Ontario, Quebec, Prince Edward Island, and Saskatchewan is 18 years old. In all other provinces, the age of the majority is 19.
Proof of Identity
You will need to provide information verifying your identity. In this step, you can provide a photo of your Canadian passport, a driver’s license, a military ID, a health card issued by a province, or an employee identification issued by the federal government.
Canadian credit cards are available to Canadian residents, work Visa holders or Canadian citizens. If you’re not either, you will need to register with Equifax or TransUnion before signing up for a credit card. You may also be required to visit a physical bank branch.
Some credit cards in Canada require a minimum credit score. For example, you usually need a good credit score for an Amex Cobalt, while you need an excellent score for the Platinum Card. The higher your credit score, the more likely your application will be accepted. The cards with the best intro bonuses, rewards, and benefits usually have higher credit score requirements.
Personal Or Household Income Requirements
This is not the norm, but some credit cards require a minimum annual income of at least $60,000 for individuals or $100,000 for households to apply. These cards tend to require a higher credit score as well.
Virtual Credit Card FAQs
Are Virtual Credit Cards Worth It?
Virtual cards might be worth it for you:
- If you make a lot of online purchases and would like to add a layer of security
- If your credit card application was approved, but the physical credit card hasn’t been issued
- If you need to make a purchase but your physical credit card was stolen, and you haven’t received your new one
Virtual cards might not be worth it for you:
- If you don’t make a lot of online purchases
- If you purchase only at the biggest stores that are unlikely to be breached by a vulnerability
Keep in mind you are never forced to use a virtual credit card – it’s just a benefit some credit card issuers provide.
What Is The Best Free Virtual Credit Card In Canada?
The best free Virtual card in Canada is the KOHO Mastercard Prepaid Card. This card doesn’t charge annual fees, offers up to 10% cash back when purchasing online at partner stores, and has a base 0.5% cash back on all other purchases.
How Do I Get A Virtual Credit Card In Canada
To get a virtual credit card in Canada, your first need to apply for a credit card that supports virtual cards. Here are the steps:
- Log into your credit card account or credit card app
- Set a limit on the number of purchases, money spent and uses
- Generate a virtual credit card number
- Use your virtual credit card information to make a purchase
Do Virtual Credit Cards Affect My Credit Score
No, virtual credit cards do not affect your credit score. Virtual credit cards are separate entities from credit cards; you can think of virtual cards as no-fee prepaid cards that you can use whenever you want, without credit card checks or interests.
Which Banks Allow Virtual Credit Cards In Canada
The Royal Bank of Canada (RBC), the Toronto-Dominion Bank (TD), the Bank of Nova Scotia (Scotiabank), the Bank of Montreal (BMO), and the Canadian Imperial Bank of Commerce (CIBC) offer virtual cards. Many other smaller banks do so as well.