Virtual Credit Cards and Digital-First Banking: Canada's Modern Credit Solution

Below, we’re going to explain what virtual credit cards are, how they work, why they’re worth considering, and how digital-first banking is changing credit access in Canada.

Get approved and start using credit the same day…plastic optional.

Let’s quickly review what a virtual credit card is.

What Are Virtual Credit Cards?

A virtual credit card is a credit card that exists digitally rather than as a piece of plastic. It has all the same components as a physical card: a 16-digit card number, expiration date, and security CVV code, but no physical card is issued.

Instead, you access the card through a mobile app or digital wallet on your smartphone (for example, by adding it to Apple Pay or Google Pay).

Virtual cards are one of the newer options among the different types of credit cards Canadians can choose from.

Importantly, a virtual credit card isn’t a prepaid or limited-use number; it’s a real credit account from the issuer, just like any other credit card.

Purchases on a virtual card are reported to credit bureaus to build your credit history, the same as a traditional card.

While many providers will mail a physical card if you request one, a virtual card lets you start using your credit immediately without waiting for the mail.

Virtual cards give you all the power of a standard credit card, but they’re combined with the convenience of instant, digital access.

How Virtual Credit Cards Work in Canada

The process of getting and using a virtual credit card in Canada is pretty straightforward.

You’ll find the basics you need to get started below:

Quickly Apply Online

Getting a virtual credit card is fast and fully online. You apply on the provider’s website or app and often receive a decision within minutes. Once approved, your new card details (number, expiry, CVV) appear instantly in the app.

You can then add the card to Apple Pay or Google Pay right away and start spending.

For example, the Earna Visa* Credit Card often approves applicants in about 60 seconds. No waiting for the mail, and your virtual card is ready to use immediately.[1] 

Start Using Your Virtual Card

Once the card is on your phone, you use it just like any credit card. For online purchases, enter the card’s number, expiry date, and CVV at checkout. For in-store shopping, simply tap your phone at the payment reader.

With over 80% of Canadian merchants now accepting contactless payments, a virtual credit card will work at almost all places you shop.

Manage Everything via an App

Virtual credit cards also give you extra control over your account. Through the issuer’s app, you can check your balance, see transactions in real time, and get instant alerts for each purchase.

You can freeze the card if something seems off and unfreeze it just as quickly, without ever calling customer service.

You’ll also pay your credit card bill through the app. (Earna’s virtual card is fully managed in-app, so you never have to visit a branch to handle your credit.)

Virtual vs. Physical Credit Cards: Key Differences

Security Benefits of Virtual Credit Cards

Protecting your financial information is critical, and virtual cards offer big security advantages. (Canadians lose over $700 million to credit card fraud annually, so these protections matter.)

Key security features include:

• There’s no physical card to steal.

• You are instantly alerted if something looks suspicious, so you can freeze your card on the spot.

• They offer tokenized payments (a secure token (random substitute number) is used instead of your actual card number).

• They’re easy to replace.

Practical Uses for Virtual Credit Cards

Virtual credit cards shine in many situations:

1. Online Shopping: Use it on any website where you’d use a regular credit card – with extra security since you’re not entering your actual card number online.

2. Contactless Payments: Tap your phone to pay for in-person purchases. It’s fast, and you don’t need to carry a wallet.

3. Building Credit Immediately: Because you receive card details immediately upon approval, you can start using it (and building credit history) right away instead of waiting for a card to arrive in the mail.

4. Travel: No physical card to lose on trips. Pay abroad with your phone wherever contactless is accepted. You can disable the card remotely if needed for safety.

5. Subscription Management: It’s easy to keep an eye on subscriptions with the help of an app, and you can freeze or cancel them quickly if needed.

Where They Don't Work Yet:

As expensive as the use of virtual cards has become, there are still a few places you can’t use them:

• You can’t withdraw cash at ATMs without a physical card.

• Some merchants with outdated terminals still don’t accept mobile wallets.

• Certain car rental agencies or hotels also require a physical card for deposits or ID verification.

Earna Feature Spotlight Box

Start Building Credit Today, Not Next Week: Earna's digital approach means instant virtual card access upon approval. Apply in 60 seconds, get an immediate decision, add to Apple Pay, make your first purchase within minutes. No waiting. No branches. Real unsecured credit with $500-$3,000 limits reporting to both major credit bureaus.

Are Virtual Credit Cards Right for You?

If you have yet to decide if a virtual credit card is the way to go, we’ve provided a handy decision framework for you below.

Perfect If You:

• You already do most of your spending online or by tapping your phone to pay.

• You want to start building credit immediately rather than waiting weeks for a physical card to arrive.

• You value extra security features and instant control over your account.

Consider Physical Too If:

• You travel to places where contactless payments aren’t common.

• You frequently withdraw cash from ATMs.

• You often rent cars or stay at hotels that insist on a physical credit card at check-in.

(If you’re working on improving a low score, check out our picks for credit cards for building credit.)

For most people, a virtual card covers the majority of everyday needs. You can always get a physical card later for rare cases, but why wait to start building your credit now?

Join thousands building credit the modern way. Apply for Earna's virtual card in 60 seconds. [Link: Check Eligibility]

Frequently Asked Questions

Can I use a virtual credit card everywhere?

Almost! You can use virtual cards for any online purchase and at most stores that accept tap payments.

Only a few situations (like very old payment terminals, ATM cash withdrawals, or certain hotel/car rental check-ins) still require a physical card.

Are virtual cards as secure as physical?

Yes. In fact, virtual cards are often more secure because there’s no plastic to steal, and they use tokenization (merchants never see your real card number).

You’ll also get instant transaction alerts and can quickly freeze the card via your app for extra security.

Do virtual credit cards build credit the same way?

Absolutely. A virtual credit card is an unsecured credit account (see our secured vs unsecured comparison), just without the plastic.

Your payments and usage are reported to the credit bureaus no differently than with a traditional card, so responsible use will build your credit history.

Can I get a physical card if I have a virtual?

Most providers will also send a physical card upon request, and some do automatically.

This means you can have a physical card as a backup for places that require one if you’re in a pinch.

What if I lose my phone?

Your virtual card is protected by your phone’s security (PIN, fingerprint, etc.), so even if someone finds your phone, they can’t easily use it. If your phone is lost, you can log in to your account on another device (or call the issuer) to freeze or disable the card.

Are there fees for virtual cards?

Having a virtual card doesn’t cost more than a traditional credit card; any interest or annual fee is just the standard terms of the card itself.

How do I add to Apple/Google Pay?

Most issuers provide a one-tap option in their app to add your new card to Apple Pay or Google Pay. You can also add a card manually by opening your phone’s Wallet app and following the instructions for entering the card details from your account.

SOURCES:

•  https://www.bankofcanada.ca/wp-content/uploads/2024/07/swp2024-25.pdf

• https://www.canada.ca/en/department-finance/programs/financial-sector-policy/updated-assessment-inherent-risks-money-laundering-terrorist-financing-canada.html