Virtual Cards in Neobanks: Benefits and How to Use Them

Virtual cards have become a staple feature in modern neobanks, offering a digital payment solution that lives inside your banking app. Unlike physical cards, virtual cards exist only in digital form, with a unique card number, expiry date, and CVV. They are designed for online transactions and can be generated instantly, giving you greater control and security over your spending.

Key Benefits of Virtual Cards

Enhanced Security

The primary advantage of virtual cards is their ability to shield your main account details. Each virtual card has its own credentials, so even if a merchant is compromised, your primary account remains safe. Many neobanks allow you to lock, freeze, or delete a virtual card with a single tap in the app, preventing unauthorised use immediately.

Budgeting and Control

Virtual cards can be set with spending limits, expiration dates, or restricted to specific merchants. This makes them excellent tools for sticking to a budget. You can create a card with a predetermined balance for a project or a month's entertainment, ensuring you never overspend.

Subscription Management

Use a dedicated virtual card for each subscription service. If you want to cancel a subscription, simply delete or freeze that card instead of jumping through cancellation hoops. This approach prevents unwanted recurring charges and gives you a clear overview of your subscriptions.

International Use

Many neobanks offer virtual cards in multiple currencies or with competitive exchange rates. You can create a card in the local currency of a country you're purchasing from, avoiding foreign transaction fees and getting better rates. Some neobanks even allow you to generate virtual cards with different billing addresses, helpful for region-locked services.

How to Use Virtual Cards in Neobanks

Creating a Virtual Card

Most neobanks let you create a virtual card directly from their app. Navigate to the cards section, tap 'create virtual card', and choose your preferences: spending limit, expiry date, or merchant restriction. The card details are generated instantly and shown on screen. You can copy them or add them to your mobile wallet for easier use.

Using It for Online Payments

When checking out at an online store, select credit card as payment method and enter the virtual card details. For added security, some neobanks offer a one-time CVV or require biometric confirmation in the app for each transaction. If the merchant supports it, you can also save the card for future purchases, but be aware that this reduces its disposable nature.

Managing and Deleting Cards

Keep track of your virtual cards in the app. You can view transaction history, change the card's limits, or freeze it temporarily. When you no longer need a card, delete it permanently. Unlike physical cards, there is no need to wait for a replacement; a new card is only a tap away.

Tips for Maximising Virtual Card Benefits

• Create a separate virtual card for each online store or subscription to isolate potential breaches.
• Use a virtual card with a low limit for free trials that require credit card information, so you won't be charged if you forget to cancel.
• For international purchases, generate a card in the local currency to avoid conversion fees.
• Regularly review your virtual cards in the app and delete those you no longer need.
• If your neobank offers it, enable transaction notifications for every virtual card to detect fraud early.

Virtual cards are a powerful feature that enhances both security and convenience in digital banking. By leveraging them wisely, you can protect your finances, manage subscriptions, and make international payments without extra costs. Explore your neobank's virtual card options today and take control of your online spending.