Choosing between a physical card and a virtual card can be confusing. With both options offering different benefits, it’s important to know which one fits your lifestyle better. Here’s a detailed look at the differences between these two types of cards, the benefits of each, and tips tailored for Canadians on how to make the right choice.
What is a Physical Card?
A physical card is a traditional, tangible card made of plastic. It includes credit, debit, or prepaid cards issued by banks or fintech companies. Physical cards have long been a popular option due to their ease of use for both online and in-person transactions.
Key Features of Physical Cards
- Widely Accepted: Accepted at most retailers, both in Canada and internationally.
- Tangible and Durable: Can be used in ATMs, chip readers, and tap payments.
- Back-up for Travel: Essential for international trips, where digital payment methods might not be accepted.
Common Fees
Physical cards can sometimes come with maintenance fees or foreign transaction fees. For example, certain travel credit cards might have lower fees for international use. Check out our guide on travel credit cards to find options that work best for frequent travellers.
What is a Virtual Card?
A virtual card is a digital card that exists solely online. It’s linked to your account and can be used for online transactions or through mobile payment apps like Google Pay or Apple Pay. Virtual cards are gaining popularity due to their enhanced security and convenience.
Key Features of Virtual Cards
- Instant Issue: Often available right after account approval, making it a fast option for new users.
- Enhanced Security: Provides a unique card number for each transaction, reducing the risk of fraud.
- Customizable Limits: Easily adjust spending limits or freeze the card instantly via the app.
Common Fees
Virtual cards generally don’t have additional fees beyond what the account they’re tied to might charge. However, it’s crucial to understand terms like foreign transaction fees if using the card for online purchases from international retailers. For more on avoiding such fees, see our article on credit card fees.
Physical Cards vs. Virtual Cards: A Side-by-Side Comparison
To help you decide which is right for you, let’s break down the key differences between physical and virtual cards:
| Feature | Physical Card | Virtual Card |
|---|---|---|
| Availability | Requires delivery time | Instant issue |
| Security | Susceptible to theft or loss | Unique card number for each transaction |
| Convenience | Better for in-person transactions | Great for online shopping and subscriptions |
| International Use | Widely accepted globally | Can be limited depending on the region |
| Spending Controls | Traditional spending limits | Customizable limits and easy freezes |
Which Card Should You Choose?
When to Use a Physical Card
- Frequent Traveller: If you often travel abroad, a physical card is a must. It’s widely accepted at hotels, restaurants, and ATMs.
- Access to ATMs: You need a physical card for withdrawing cash, which is useful when travelling within Canada or abroad.
- Backup Card: A physical card serves as a great backup if your digital wallet faces technical issues.
When to Use a Virtual Card
- Online Shopper: Virtual cards offer better security for online shopping since each transaction uses a unique card number.
- Subscription Management: Easily create and delete cards for subscriptions to manage payments and avoid unwanted charges.
- Immediate Access: If you don’t want to wait for a card to arrive in the mail, virtual cards are a convenient choice.
How to Get a Physical or Virtual Card in Canada
Steps to Apply for a Physical Card:
- Choose a Card: Decide on a credit, debit, or prepaid card based on your needs.
- Fill Out an Application: Apply through your bank’s website or app.
- Wait for Delivery: Physical cards typically take 5-10 business days to arrive by mail.
- Activate the Card: Follow instructions provided with the card to activate it before use.
Check out our guide on how to choose the best credit card for your lifestyle for more tips.
Steps to Apply for a Virtual Card:
- Choose a Bank or Fintech Provider: Many digital banks in Canada, such as KOHO and Wealthsimple, offer virtual cards.
- Download the App: Most virtual cards are issued through the bank’s mobile app.
- Complete the Application: Provide necessary information and verify your identity.
- Start Using It: Once approved, your virtual card is ready for use instantly.
Key Considerations
- Banking Regulations: Canadian banks follow strict security regulations, making both physical and virtual cards safe. However, it’s essential to understand your card’s coverage and protection policies.
- Digital Payment Trends: Canada has a rapidly growing adoption rate for digital wallets and virtual cards. While physical cards remain essential for some uses, more Canadians are turning to virtual cards for online shopping.
- Travel Tips: If travelling outside Canada, ensure your physical card doesn’t have high foreign transaction fees. Many digital banks offer competitive rates for global use, making them a good alternative. You can explore options like digital banks vs. traditional banks for a better understanding.
Deciding between a physical and a virtual card depends on your lifestyle and financial habits. A physical card is essential for those who need in-person access and international acceptance, while a virtual card is ideal for online shoppers and those looking for enhanced security.
With the right balance, you can leverage the best of both worlds—using a virtual card for online transactions and a physical card for everyday purchases and travel needs. Whichever option you choose, make sure it aligns with your financial goals and habits.
