Virtual debit cards (or instant debit cards) are becoming increasingly popular. Is it any wonder? They are quick and easy to use on the go, and you never have to worry about spending money you don’t have access to.
But what should you look for in an online bank account with an instant debit card, no deposit? Ideally, you’ll need to find a service that’s trusted by the masses – but doesn’t skimp on the features, either.
In this article, we’ll walk you through what virtual cards are, why they are so popular, and which online banks you should consider when opening your own virtual card.
Best online bank accounts with virtual and instant debit cards
While multiple online banks provide virtual and instant debit cards, three particular services stand out to the PFF team (which we’ve covered elsewhere on the blog, if you’re a regular reader)!
Let’s take a quick look at why Wise, Chime, and Revolut score highly when it comes to finding the best online banks with virtual or instant debit cards.
Wise is one of our favourites here at PFF as we use it regularly and love its functionality.
Although Wise is a UK-based fintech, they partner with licensed banks in each of the countries that they operate in, so you are not dealing with some nebulous entity. A great advantage is that a Wise customer in the US is also FDIC-insured.
You can easily set up a free online account with Wise in the US. As you might have guessed, it also comes with a virtual card!
Unlike Chime, you can have up to three virtual cards at once, and it is fully compatible with Samsung Pay, Apple Pay, and Google Pay. Much like Chime, you can also set your own spending limit and block the card online.
One of the biggest reasons people use Wise as a free online service is thanks to the fact you can hold money in one of up to 40 different currencies, and if you ever want to change currency online at short notice, it typically only takes a few minutes.
Want to send money home to your relatives in another country, say India or Mexico? No problem! Are your kids traveling in Thailand and out of money? No problem! Got a property in Spain where you’re collecting rent and want to easily bring the money back to the US? No problem!
Wise tends to be popular with travelers and people who run businesses with international customers. There is a physical card option available should you prefer to make cash withdrawals while you’re abroad, but it’s the virtual option that appeals to most people.
I use Wise personally and I am a big fan of their service. If you want to learn more, please do check our detailed review about Wise.
Chime’s virtual card is easily one of its best features, and the few requirements you need make this a must-try if you’re living and making money in the US. That said, it always pays to read the terms and conditions.
Much like Wise, Chime also technically isn’t a bank. They’re a modern fintech that partners with boring old banks to provide the core banking functionalities. They provided the sexy features on top.
Unlike most physical banks, Chime has no minimum balance requirements, along with zero monthly fees and no credit checks. It’s great as that means you can open an online bank account for free with Chime!
A general Chime checking account comes with a VISA debit card, mobile check deposit, instant transaction alerts, and even an optional savings account.
And, should you need it, Chime can offer you an optional credit builder card, and, yes, it can work as a virtual card, too.
You can easily set your own spending limits, block the card online, and have two virtual cards (maximum) at one time, and the app is compatible with Apple Pay and Google Pay.
All you need to sign up for Chime is your personal information, including your social security number. Chime tends to score pretty well with users across the US, largely because it has very few restrictions.
You can read more in our article containing a detailed discussion on Chime.
Again, like Wise and Chime, Revolut is not quite yet a bank, at least in the US and the UK. Therefore, it is best used as a spending assistant rather than a bank account. It’s a fintech standard that’s grown rapidly over the past few years, to the point where it’s already a household name with millions.
Revolut doesn’t demand monthly charges from its users, and provides an instant virtual debit card that’s ready to go when you are.
With Revolut, you can create and hold up to 20 virtual cards at a time, set your own spending limits, block spending, and share functionality through multiple smart pay apps (such as Apple Pay, Google Pay, and Garmin Pay).
Revolut’s customer service standards and fees tend to get quite highly rated, meaning it’s one of the more appealing to users new to the idea of virtual cardholding.
If you do like some of Revolut’s tech-forward features – and there are a number of them – I would urge you to limit the amount of money that you have inside your Revolut account at any time.
What is a virtual debit card?
As you might have guessed from the name, a virtual debit card exists entirely online (i.e. via website or app login) and not on your person.
Every digital card has information, i.e. card number, CVV and expiry date, just like a physical card. Unlike the plastic card in your wallet, a digital version can only be used for online and contactless transactions. Naturally, you cannot use these cards for transactions where you may need to swipe or insert the card.
Virtual cards, as you might imagine, are often used to make payments online. That said, in some cases, you can use instant or virtual cards to make payments at physical terminals too using the tap functionality on your phone. We discuss it in greater detail below, but if your virtual card provider lets you add the card to a wallet like Apple Pay or Google Wallet, you should be able to use tap to pay at a terminal.
Traditional banks with their legacy technology systems may not be able to provide virtual and instant cards. There are of course always exceptions, but you may need to look around. Lately online banks and new fintechs have been quick to embrace this technology. So if you’re looking for a virtual card, keep reading to look at some our recommendations.
Why use a virtual debit card?
Virtual debit and credit cards are technically safer to use than traditional bank cards. That is to say that with virtual cards, there is no risk of physical theft. You don’t have to worry about a card getting stolen from the gym locker room!
If for whatever reason you believe that your card details have been compromised, you can quickly and easily disable the card through your provider’s app or website. The best part is you can instantly create a new card and start using it right away.
Another great thing about instant and virtual debit cards is you are less reliant on your bank. In many cases, you can change the currency on your card as needed, set opening limits, and select where you want the card to work (for example, which merchants you are more likely to purchase from).
And, when you do not want to use the card for a while, you can pause or even close it on demand. It’s a great option if you’re worried about overspending or want to control some of your shopping habits.
You can do all this without booking an appointment or spending hours on the phone with your bank!
Another, maybe obvious, bonus of using a virtual debit card is that you do not have to worry about bringing your wallet with you everywhere you go. And, even if you forget, lose, or have it stolen, you can easily access money from your phone.
Virtual cards tend to be popular with travelers as they only need to have access to their smartphones – which is precious enough to look after, let alone a card or two!
While not everyone will be completely comfortable with using an app over a physical card initially, this could be a sign we’re moving closer toward a digital banking future. Now’s the time to take a closer look!
What is a single use virtual card?
As the name implies, a single-use virtual card can only be used once. The card details such as your card number, the expiry date, and the CVV (the 3-digit security code) become invalid after being used once. New details are automatically generated for you so they’re ready for your next use. Your account meanwhile stays the same, just the particulars of your card are updated for security purposes.
Such a card would be very secure and you could feel comfortable using it for situations where you may want to be extra careful with your financial security. Currently Revolut offers such a functionality. They also offer a plugin for Chrome that takes care of the annoying part of entering in the new card details each time you transact online.
The nice thing is that refunds can be processed as well with your card even though you don’t have the same card details.
This is very new technology and so there are not too many companies out there that offer this. If this becomes successful, this could potentially reflect the direction in which all cards head in the future!
How to set up a virtual debit card
Typically, you’ll only need an internet connection and a few personal details to set up a virtual debit card. Thankfully, if you choose any of the three card providers listed above, you can expect to get started within minutes.
Start by researching a few online banks, and choose the one that best suits you. Signing up at your chosen bank or online service will usually demand verification, in which case your new provider will ask for your personal information and ID.
It can take a few hours or even a few days to be verified, but, generally speaking, it’s pretty quick.
As soon as you have received verifications, you can start using your virtual card, whether or not you are still waiting for a physical edition.
Remember, verification standards will vary from service to service, so don’t be too surprised if the process described here looks a little different when you come to register and use your new service for the first time.
Can I transfer money from a virtual debit card to a bank account?
In most cases, you should be able to transfer money from your virtual debit card to a bank account. Regardless of the service you’re using, look for “transfer” in the list of options provided.
However, do remember that not all virtual debit cards arrive with transfer functionality. It is always worth checking with your provider that they support such terms.
That being said, should you need transfers above all else, apps and e-wallets such as PayPal will also allow you to transfer between banks and cards – though you’ll need a physical card to make this transaction.
by Jon Craig
I am the creator of Project Financially Free and I started this journey to both educate myself and share my insights on personal finance. I’m passionate about financial literacy and I invite you to join me on this transformative path. See more.