Virtual credit cards

By   |   Verified by Debbie Duncan   |   Updated 5th August 2022

  • Differences between virtual credit cards and digital wallets.
  • Finding the right virtual credit card to fit your needs.
  • Financial institutions that provide virtual credit cards and digital wallets.

The use of virtual credit cards and digital wallets in Australia has soared, surpassing cash payments on in-store purchases.

Choosing the right virtual credit card or digital wallet for your needs can be determined by several factors: your credit history, financial status, and whether the card is for business or personal use.

What is a virtual credit card?

Virtual credit cards are digital versions of conventional credit cards and are accessible to those with a pre-approved line of credit. These virtual cards can be accessed from multiple digital devices, including:

  • mobile phones;
  • laptops;
  • tablets;
  • desktop computers.

Examples of Australian virtual credit cards

MONEYME Freestyle Virtual Card

Highlights

  • Use virtual card instantly once approved (typically within 60 mins)
  • Tap n Pay with up to 55 days interest free
  • Use credit to transfer money to anyone
  • Exclusive perks & many more features
  • Thousands of 5-star customer reviews

Bank promo

  • Get MONEYME's lowest advertised rate EVER of 14.99% p.a.
  • Annual fee of $0 to $149 p.a. based on credit limit plus a monthly fee of $5 for balances over $20.
  • Be eligible for deals and credit back offers at over 1,400 participating stores thanks to MONEYME Perks, powered by Cashrewards. Terms and conditions apply.

Pros

  • Available to use immediately after approval.
  • Money can be transferred to your bank account.
  • Get cashback at participating stores with Cashrewards.

Cons

  • The maximum credit limit is comparatively low.
  • Combination of annual and monthly fees can be quite expensive for the highest credit limit.
  • There is a 1.5% withdrawal fee.
Bankwest Breeze Mastercard

Highlights

  • Enjoy 0% p.a. on balance transfers for 15 months (0% BT fee, 9.90% p.a. thereafter).
  • 0% p.a. for 15 months on purchases (reverts to 9.90% p.a.)
  • First-year annual fee waiver. $49 p.a. thereafter.
  • New customers only. Limited time. Other fees and charges, T&Cs apply.

Pros

  • 0% p.a. on balance transfers for 15 months.
  • 0% p.a. for 15 months on purchases.
  • First-year annual fee waiver. $49 p.a. thereafter.

Cons

  • There are no rewards on this card.
Westpac Flex Card

Highlights

  • 0% interest and $0 late payment fee.
  • $10 monthly fee, or no outstanding balance, $0 fee.
  • Access to Westpac Extras and Rewards.

Pros

  • No interest charges.
  • Pay no monthly fee if you do not have any outstanding balance.
  • Choose to repay monthly or twice a month, plus pay back more at any time.
  • No late payment fees.

Cons

  • Low credit limit.
  • No balance transfers or cash advances.
  • Lacks the ability to earn rewards.

How do virtual credit cards work?

Just like the physical credit cards we are all familiar with, virtual credit cards have their own unique, 16-digit numerical sequence, including a CCV code and an expiration date. They can be used online to make a purchase, pay a bill, or transfer funds. Additionally, they can be added to a digital wallet such as Apple Pay or Google Pay.

When a virtual credit card has been issued, it can be used immediately. This compares favourably to having to wait several days for a plastic card to arrive in the mail. Since details are stored online or in an app (depending on the issuer), the risk of your card being lost or stolen is reduced.

Most physical credit cards issued by banks in Australia can be added to digital wallets too.

Digital wallets vs virtual credit cards

A virtual credit card is added to a digital wallet such as Apple Pay or Google Pay. The virtual card can then be used to make purchases in physical or online stores where these digital wallets are supported. As well as virtual credit cards, debit cards, prepaid cards, and gift cards, digital wallets may also store loyalty program membership details, boarding passes, and photographic ID such as your driver's licence.

Pros and cons

When searching for a virtual credit card, whether for business or personal use, knowing the pros and cons is key to the decision-making process.

Pros

  • Virtual credit cards provide access to your funds without the need for a physical card.
  • Cards can be created online within seconds, allowing for instant payment options.
  • You can earn points for purchases, travel incentives, and discounts for certain retailers just as you would with a traditional credit card.
  • There are options for single-use virtual credit cards, meaning once the credit limit is reached, the card becomes void.
  • It’s easy to cancel a card if it becomes compromised, and you can create a new card to start using immediately.

Cons

  • Virtual credit cards can still get you into debt when used irresponsibly.
  • Virtual credit cards are still susceptible to hacking and fraud.
  • Returns can be complex with single-use virtual cards. Once the card is used, the details then expire, and you may not be able to return an item or receive a refund. The best way to avoid this is to create a virtual card using a pre-existing credit card or use a different purchase form for certain items.