Best Virtual Credit Cards in the UK
Paying by card, whether that’s a debit or credit card, is now the most popular way to spend money in the UK. We’ve all got so used to tapping our contactless cards or phones (for Apple or Google Pay) on the card reader and purchasing our goods without having to type our PINs in during 2020.
However, sometimes even trying to find your card is an inconvenience. Virtual cards have slowly been making an appearance into the UK financial market, with more companies being regulated frequently.
Digital banking is rapidly on the rise too, with less of us doing traditional in-branch banking than ever before.
There is a lot of misinformation out there so we’ve compiled an article offering useful insights and advice, including the best virtual cards on the market right now. If you don’t even know where to start, we’ve also included lots of information about what virtual cards actually are, how to get one and the many benefits of using them.
What Is a Virtual Card?
A virtual card is exactly that, a card that doesn’t have a physical piece of plastic in your wallet or purse. In the UK, virtual cards are predominantly debit or prepaid cards, whereas the US operates more virtual credit cards.
The idea is that it is operated on an app on your phone when out and about and you pay securely for purchases online using random security codes, sent by the app or sometimes via text.
Security is a major issue for card users; with a virtual card, you are able to cancel any cards instantly if you suspect fraudulent behaviour and get a new card automatically. There is no need to wait up to five working days for a new plastic card to be delivered.
Also, virtual cards offer extra security by not disclosing any financial data to any online store you buy from. This means that should the store’s servers be hacked or there’s an internal data leak, your card details will not be stored.
You will use a one-off card number per transaction so there is no need to worry about remembering your card details as they change every time. However, you can have multi-use cards so if you shop on one website often, you would set up a card just for that website, such as Amazon.
However, if a physical store does not accept contactless payments, a virtual card will not work. For the most part, most high street stores accept contactless and many independent stores use mobile card machines, most of which do accept contactless payments.
What Are the Benefits of a Virtual Card?
You may no longer need to carry a purse or wallet around. With a virtual card, all you need is your phone and the banking app. You can check your spending as little or as often as you like, with multiple tools available in-app to help you manage your money.
Virtual cards are great for recurring payments as they allow you to manage subscriptions by setting up a card for each one you have.
You will be able to monitor how many you have, which ones you don’t use enough and if you’ve been overcharged at any point.
Every time you purchase either from an online or physical store, your account details are completely invisible to the merchant. This means that should any data breaches happen to them, your data will not be accessible. Virtual cards offer that extra protection so you can shop safely online.
Not only do you not have to fumble around in a bag for your card, there is also the speed factor if you require a new card. This will happen instantly on the app without having to wait for a delivery, nor will your account be frozen so you’re unable to spend.
Many of these cards offer single- and multi-use cards for frequent visits to the same shop or website. Some also offer currency conversion on your cards so you will no longer have to pay a fee when spending in another currency or with an overseas company.
Top 5 Virtual Cards in the UK
Revolut is one of the most popular virtual cards in the UK with 15 million personal customers and over 500,000 business customers. Launched in 2015, it has since expanded across the world with over 100 million transactions a month taking place.
It offers four different tiers, with more features included with additional monthly fees. The Standard account is free, the Plus account is £2.99 a month, the Premium account is £6.99 a month and the Metal account is £12.99 a month.
The basic card is free; you can open an account within minutes via the app.
- Rounding up transactions to the nearest pound
- Instant payment notifications
- Categorise your spending
- Spend and send money abroad for a low fee
- Set up recurring payments
- Up to £1000 a year free insurance on purchases (Plus account)
- 90 days return window (Plus account)
- Savings Vault for pots of savings (Plus account)
- Worldwide travel insurance (Premium account)
- Unlimited foreign exchange (Premium account)
- Disposable virtual cards (Premium account)
- Earn cashback on certain purchases and access to special offers (Metal account)
Monese is another virtual card opened and operated via a mobile app. You will be delivered a physical card and then customers are able to set up a virtual card per currency. From there, you can choose to pay with a physical card or with Apple or Google Pay.
It is free to move money between Monese accounts, with a small fee to transfer funds to other bank accounts, both in the UK and internationally.
- Free payments and transfers within the UK
- Set up recurring payments
- Send money internationally for free (Premium plan) or a small fee (Simple and Classic plans)
- Budgeting tools – Set goals, record expenses, detailed transaction alerts, categorise payments
- Save money in up to 10 pots
- Cash deposits at any Post Office or PayPoint
- Security – Log in with Face ID, Touch ID or Fingerprint Scanner, one-time codes texted to you for every online purchase
- ATM withdrawals – £200 on the Simple plan, £900 on the Classic plan and unlimited on the Premium plan
- Foreign currency card spending – £2,000 free on Simple plan (2% fee over that), £9,000 free on Classic plan (2% fee over that), unlimited with no fee on Premium plan
Skrill is slightly different to both Revolut and Monese. It’s a virtual prepaid card with Mastercard, for one-off or ongoing transactions, but it also has a physical Mastercard product too.
It offers three levels of accounts:
- Skriller – The basic account assigned to anyone who sets up an account
- True Skrillers – Fully verified customers, must have deposited via credit/debit card or bank account, have downloaded and logged into the mobile app
- VIP Skrillers – Additional features, premium rewards, lower fees, can have multi-currency accounts, a free physical card (this account also has silver, gold and platinum levels within it for even more offers/rewards)
- Security – Make purchases and cancel your card at any time
- Control – You can decide how long you would like the card to be valid for
- Online-only usage, not valid offline or at ATMs
- Free transactions – Purchases, receiving money into your account, sending money to international banks using transfers
- Loyalty programme (Knect) – Earn points for transactions and trade them for cash rewards
- Buy and sell cryptocurrency
The iCard Visa debit account is run by the Bulgarian National Bank. With the basic account, you receive one free physical card as well as one free virtual card.
Again, there are three accounts to choose from with iCard:
- Standard – Free account, comes with a physical card, free transfers to other iCard account holders, one virtual card allowed, fully online bank, pay with Apple Pay
- Infinite (€9.99 a month) – All of the above as well as free travel insurance abroad, 24/7 support via the app, Visa offers
- Metal (€13.99 a month) – All of the above as well as up to 1% cashback on transactions, unlimited ATM cash withdrawals, extra offers
- Used in over 30 European countries
- Available in seven currencies – GBP, US Dollars, Euros, Swiss Franc, Romanian Lei, Bulgarian Lev and Croatian Kuna. You can have multiple virtual cards in one account but can order more physical cards in other currencies if need be.
- Digitise your loyalty cards so they’re all in one place
- Virtual cards can be used for any transaction – Services, subscriptions, one-off purchases
- Receive notifications of transactions and set spending limits
- Freeze and unfreeze your cards in the app
- Security – Fingerprint login
- Pay with Apple or Google Pay
5. US Unlocked
If you’re someone who spends a lot on American websites or visits often, US Unlocked could be the card for you.
This virtual prepaid card is designed to by-pass extra fees that UK banks charge for overseas transactions and allow customers to reduce their fees for delivery when buying from the US.
US Unlocked works with reshipping partners as well as VPNs to allow you to receive US products and services in the UK.
There are fees for initial opening ($15) and loading (currently $3.50 plus 3.5%), $0.50 per transaction and a $3.50 monthly maintenance fee; however, this can still be cheaper than the exchange rates on UK-based bank charges.
- Apply with government-issued ID for verification online
- Set up a virtual card for each vendor or purchase, including subscriptions
- Set spending limits for businesses or categories
- Pause subscriptions from the app
- Given a US billing and shipping address
- Currently working on a browser extension for desktop
While virtual cards are fairly new to the market, they can be worth it for people who purchase online frequently. It is important to look at any hidden fees and do your research before applying for an account with any virtual bank.
It is also worth remembering that none of these are covered by the Financial Services Compensation Scheme, meaning your money is not safe if the company goes under.
However, for everyday, smaller purchases, virtual credit and debit cards are a great alternative if you prefer to do all of your banking via your phone.
Most virtual banks offer budgeting tools to help you manage your money, including setting spending limits on certain brands or categories, managing any subscriptions and setting goals for both income and expenses. As some are prepaid, you can only spend the amount on the card, which is great for those who have problems with budgeting.
Virtual debit cards will continue to rise within the financial market so it could be great to get on board first.
WikiJob does not provide tax, investment or financial services and advice. The information provided is for general reference and you should not rely on it to make (or refrain from making) any financial decisions. Personal situations will vary. Always seek independent financial advice when choosing how to manage your finances.