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Top virtual credit cards UK
With fraud on the rise, find out how a virtual credit card could protect your financial details when you shop online.
If you regularly shop online, using a virtual credit card can offer a safer shopping experience and reduce the risk of you becoming a victim of fraud. This guide explains how virtual credit cards work, who offers them and whether they are worth it.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
What is a virtual credit card and how does it work?
A virtual credit card is a temporary credit card number that you can use when shopping online. It does not exist as a physical card and you cannot use it to withdraw cash at an ATM.
Just like a standard credit card, your virtual card will have a randomly generated 16-digit card number, a CVV code and an expiry date.
Once you’re ready to pay for your items online, you simply enter your virtual credit card details and pay as normal. Your card will be linked to your physical credit card or your bank account so the payment will show up on your account statement as usual.
Virtual credit cards are designed to protect you from having your credit card information stolen. No financial data is disclosed to the merchant, which means your bank account or credit card details won’t be stored by the online retailer. This means that should the retailer become a victim of a cyber attack, for example, fraudsters will not be able to access your personal or financial information.
Some virtual cards give you the option of being able to lock them after each use to prevent any further transactions. Others are designed for one use only so the card will no longer be valid once you’ve made a purchase.
Depending on your lender’s definition, virtual cards are sometimes classed as cards that you can add to your phone’s wallet or cards that you can use to pay directly through an app.
Are virtual credit cards available in the UK?
A number of digital-only banks now offer virtual cards, but note that these are debit rather than credit cards. These include Revolut, Monese, Monzo and Starling Bank.
With Revolut, you can choose between a standard and a disposable virtual card. The Revolut virtual card works in the same way as your regular Revolut card and you can freeze or unfreeze it as you wish. The Revolut disposable virtual card is for single use only.
At Monese, every customer can set up 1 virtual card per currency account which you can lock immediately after each transaction and unlock again when you need it. You can also link your virtual card to Apple Pay and Google Pay for ease of use.
If you hold a Monzo Plus or Monzo Premium account, you can also create virtual cards in the app and have up to 5 at any time. The money you spend comes from your balance, just as it does with the physical Monzo card.
Starling Bank also lets customers add digital (or virtual) cards to their digital wallet through the Starling app.
Another option you could consider is Bits. This is a virtual credit card, but you can only use it to make purchases in the Bits store. Each month, you’ll be charged a subscription fee to your card and your card will then automatically pay off the fee. This payment will be reported to credit reference agencies with the aim of helping you build up a credit history. You can find out more in our Bits review.
How do I get a virtual credit card?
Because virtual cards are only offered by digital banks in the UK, you will typically need to create one in your provider’s app.
There will usually be a “cards” section within the app where you may instantly create at least 1 virtual card. It’s here that you can also freeze and unfreeze your card whenever you need to.
How does PayPal Credit work?
PayPal Credit is a credit limit attached to your Paypal account that lets you spread the cost of online purchases in monthly instalments. It works like a virtual credit card as you won’t receive any plastic in the post.
With PayPal Credit, you’ll benefit from a 4-month interest-free period on each eligible purchase – simply select PayPal Credit as your funding source at the checkout. Provided you have sufficient available credit, you’ll get the 0% for 4 months each time you make a purchase. However, the big catch is that you will need to spend £99 or more either in 1 transaction or on your checkout basket total. Any purchases under this amount will be charged interest.
What are the drawbacks of a virtual credit card?
Perhaps the biggest drawback to using a virtual credit card is that it can only be used online, not in-store. You also won’t be able to use a virtual card for cash withdrawals, although this isn’t generally recommended for standard credit cards either.
Virtual credit cards can also be problematic if you are using them to book a hotel room or flights as you might be asked to show the purchasing card as proof of identification when you arrive.
Similarly, if you need to return an item you’ve bought online, it can be difficult to get a refund as some retailers will only put the funds back on the card used to make the original purchase. This will be impossible if the card has expired or you used a single-use virtual card and you may need to accept store credit instead.
What are the benefits of a virtual credit card?
One of the main benefits of using a virtual credit card is that it adds a layer of security between yourself and identity thieves when shopping online.
When you use a virtual credit card, your financial details are invisible to the merchant, which means there’s little risk of a fraudster being able to access them. If a hacker gets hold of your virtual card details, you simply close the card without it affecting your entire account.
Virtual credit cards are not connected to your personal information either, such as your email address, address or phone number, making them better from a data protection point of view.
In addition, most virtual cards allow you to set a spending limit so it can be easier to budget.
Pros and cons of virtual credit cards
- Adds a layer of security between yourself and identity thieves
- You can often set a spending limit, making them ideal for budgeting
- Your personal data is better protected
- You can only use them for online purchases
- It can be difficult to provide proof of purchase
- If the card has expired or you’ve used a single-use card, it can be hard to get a refund
Would a standard credit card be better?
This will depend on personal preference and what you’re planning to use your credit card for. But there is nothing stopping you from having both a virtual card and a standard credit card.
If you need to make purchases in-store or you’re booking accommodation or flights, using a physical credit card will likely be the better choice.
However, if you’re shopping online, you want to keep an eye on your budget and if you’re concerned about online fraud, a virtual credit card might be a worthy addition to your virtual wallet.
Virtual credit cards have an important part to play in the world of online shopping. As well as reducing the risk of fraud, they are also safer from a data protection point of view. However, at the moment, they are still a relatively new concept and will not be suitable for all types of transactions. For this reason, it can be a good idea to have both a virtual and a physical card.
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