Virtual Credit Card – Additional Security For Your Online Shopping

The vast majority of Australians hold at least one credit card. However, not many Aussies know how to utilise a virtual credit card. Virtual credit cards aren’t permanent. However, they can offer your finances an extra level of security when shopping online.

If you’re an avid online shopper, it may be worth reading up on how a virtual credit card Australia can help protect you.

Please note, specific ideas and products presented in this article may not be on offer by Monzi nor the lenders we work with. This article presents only general information. Consider seeking professional financial, taxation, legal or other advice to check how the information and ideas presented on this website relate to your unique circumstances.

What is a virtual credit card?

Virtual credit cards are also known as a ‘controlled payment number’ because they aren’t physical cards, despite functioning similarly to a regular credit card. In reality, they are a 16-digit number that randomly generates for the sole use of online payments. This number links to your existing credit card; however, it serves to make it more difficult for criminals and dodgy vendors to commit fraud while you’re shopping online.

When the time comes to pay, all you have to do is enter the 16-digit number where you would usually enter your credit card number and continue your regular check out process. You typically manage your virtual card through a digital wallet such as Apple Pay. Depending on which company provides your card, you may also have the option available to you to set a new credit card limit for your virtual card, along with an expiry date for a little more protection.

Are virtual credit cards legal?

Not only are virtual cards legal, but they’re also encouraged. As Australia moves towards an increasingly cashless society, there has been a rise in credit card fraud. The government and several fintech companies are currently working to prevent credit card fraud. Although, in the meantime, you should take steps to protect yourself.

Being actively cautious about which sites you interact with and purchase from is always wise. However, this alone doesn’t protect your bank account. So, it may be in your best interest to obtain a controlled payment number if you enjoy shopping online.

Virtual credit card for PayPal

PayPal is one of the companies offering a virtual credit card. The Paypal virtual credit card is called the PayPal key. Currently, the PayPal Key is only available to US citizens; however, this service will likely extend to international consumers in future.

Visa is another company offering a virtual credit card. You can use your virtual credit card if the site you are shopping on allows you to pay with Visa or Mastercard, which most should. However, again, this service may not yet be available outside the US. If you aren’t a US citizen, there are other options available. Consider looking into one of the other vendors that offer a virtual credit card, such as participating banks or fintech apps designed specifically for virtual credit.

Instant virtual credit card

Almost all applications for a virtual credit card can result in a near-instant outcome. You aren’t guaranteed approval; however, the application process is usually short and doesn’t require too much information to complete.

Once you receive approval, some companies will let you access your new virtual credit card straight away. Others may require a waiting period. To work out which virtual card will suit your needs, it may be a good idea to use an online credit card comparison tool to see all your options in one place.

Virtual debit cards

If you can’t apply for or don’t believe in credit cards, you also have the option available to obtain a virtual debit card. More Australian banks offer the option of a virtual debit card than a credit card. Ensure a virtual debit card will suit your needs before applying.

You should note that prepaid virtual debit cards limit the amount of money you can put on the card. If you opt for a digital debit card, you will be able to use it in-store; however, your purchase limit may be limited to $100 per transaction. If you choose the virtual option, you may be able to link it to a PayPal account (if you have one) to broaden where you can make purchases.

Compare virtual credit cards

There are several free online tools that will let you compare the virtual credit cards available. A quick Google search for ‘virtual credit card calculator’ should bring up a site that compares the options available to Australians.

One of these comparison tools should tell you any applicable information regarding balance transfers, purchase rates and annual fees. Aside from this, they may also give you a rundown of each card’s highlights, pros and cons, which may be highly useful in your decision-making process.

Can you get a free virtual credit card?

Most virtual credit cards allow you to apply for free. However, as they are just an extension of your regular credit card, you will still need to pay your annual fees to keep your account open. If you don’t currently have a credit card but think you may struggle with the interest and repayments, it might be better to avoid opening an account.

An excellent alternative to this is to apply for a virtual debit card. This will still permit you to shop safely without the stress of falling behind on your repayments.

Can you take cash from a virtual credit card?

No, you can’t get cash out with a virtual credit card as they only support online shopping. You also typically cannot cash out a prepaid Visa or Mastercard gift card. If you are desperate to convert a card you got for your birthday into cash, you may have to negotiate with friends or family to trade that card in exchange for the equivalent cash.

Can you transfer money from a virtual credit card?

You cannot transfer money from a virtual credit card as it is not the same as a prepaid card. Virtual credit cards operate the same as a traditional credit card. You are not spending money that is yours. Instead, you are borrowing money from your bank.

You also cannot transfer from a prepaid credit card. If you are given one of these cards as a gift, it would be wise to use them as marked.

Can I use a virtual credit card in-store?

No, a virtual credit card serves to protect you from fraud when you are shopping online. If you are shopping in a legitimate store using a functioning point of sale (POS) machine, your purchases should be safe.

To identify whether the online store you are shopping in is legitimate, look for the site’s contact information. If they are an honest company, they should have an address, email and phone number to reach them. Another method is to check for spelling and grammar errors; this can be key in identifying a legitimate business. One other way is to use sites that offer secure payment options covered under a security giant like McAfee.

How to apply for a regular credit card?

If it is a physical credit card that you are after, start by comparing all the cards on the market and choosing one that you think appeals to your needs the most. During this research, take the time to read up on any aspects you don’t understand. It may not be wise to open a credit account without fully understanding the terms you agree to. Once you’ve read the fine print, you can place your application.

Typically, in Australia, to open a credit account, you will need two pieces of identification. Usually a driver’s license, passport, or a Medicare card. On top of this, you will also need to be an Australian citizen and over 18 years of age. They will request some of your details and proof of income to demonstrate that you can afford any repayments.

You can complete this process online, or you can go into the branch to apply. Make sure you bring all the required documents with you to ensure an easy application.

How does a standard credit card work?

A standard credit card works by allowing you to use the bank’s money to make purchases. As you would with a cash loan, you have to make the repayments on your credit card each month to retain a healthy credit report.

If you don’t pay back the total required balance by the due date each month, the bank will charge you interest on this amount until you repay it. There is, however, a minimum repayment amount. If you only repay the minimum amount, you will have interest; however, you’ll avoid incurring missed or late payment fees.

Each credit card comes with a credit limit. If you have an average credit score, your bank may set this limit for you based on their impression of your creditworthiness. If your credit score is above average, you may be entitled to the option of setting your credit limit.

Can you get rewards from virtual credit cards?

One of the big motivators for using a credit card is the rewards offered on certain cards. A virtual credit card functions as an extension of your regular credit card, meaning any purchases you make with your virtual card have the potential to go towards whatever deal your card offers. For example, frequent flyer points. You can also return and exchange when using the virtual credit card, just as you would normally.

That said, remember that policies may vary depending on the virtual credit card company you are dealing with.

Pros and cons of virtual credit cards

There are pros and cons to any financial transaction, and virtual cards are no exception. The biggest positive is the security benefits. Once you have used the virtual card number for a transaction, it disposes of itself, and you cannot use it again. Hence, hackers typically don’t bother with virtual cards as they expire before they can be of use. You also don’t need any special software as it is merely a number to input at the checkout.

In terms of the disadvantages, if you use your temporary number for tickets (for travel or movies etc.) and end up needing to show your credit card for proof, the numbers may not match. However, this most likely won’t be a common problem. It may also be a hassle if you plan to make multiple online transactions within a sitting, as your number can expire and force you to generate a new one.

Woman shopping online using a virtual credit card

Pros and cons of physical credit cards

Traditional credit cards have their positives too. One of which is that they may be helpful in an emergency. If you are between paycheques and need to cover an urgent service, credit is an easy way to remove this stress from your shoulders. Another is the rewards you can build up. These rewards may provide you with cashback on certain purchases or save you money on flights. Depending on your lifestyle, such rewards can be very worthwhile.

The most apparent negative of using a credit card is that it gives you room to create debt and harm your credit score if you aren’t careful. Another negative are the annual fees and credit card interest you may end up paying. A standard credit card is also more susceptible to fraud, unlike its virtual counterpart. One good way to improve your credit card usage is to look for cards that offer interest-free periods to avoid paying more than you had hoped.

What are the five C’s of credit?

Regardless of whether you use a physical or virtual credit card, it is in your best interest to use it to its full potential and let it aid your credit score. When seeking a larger loan, such as a home loan, your lender will consider the five C’s of credit when making their decision. If you use your credit card haphazardly, you could be decreasing any future chances of approval. Here are each of the credit C’s and how they influence your approval rate:


Your character often reflects your credit score. It is your level of willingness and responsibility when it comes to making your repayments. Your credit report details many things, although your lender looks at your past loans and credit card usage information first. If you aren’t diligent with your repayments, this will reflect in your credit report, and your lender may not be willing to process an approval.


This is where your lender evaluates your capacity to pay back a loan. For your lender to calculate this, they will look into your income source and stability first. For example, are you a salaried employee or self-employed? Do you work for a young or a well-established company? Then they may calculate your total debt service ratio, the ratio of all your existing debts divided by your gross monthly income. Comparing this information allows your lender to gauge whether you are a trustworthy borrower.


Your lender examines your capital to understand how serious you are about the proposed investment. If you have a high net worth (what you own vs what you owe), this will indicate good budgeting and savings habits. A reasonable home loan deposit on a mortgage is also a viable way to demonstrate your capital.


With certain loans, it might be wise to put down some collateral to display your intentions. Also known as security, collateral can be an existing home’s equity or a vehicle. Doing this decreases your risk and may permit your lender to approve your loan. However, if you default on your secured loan, then your lender may take steps toward repossession.


Your repayment amount, interest rate and the purpose of the loan are just a few of the conditions your lender may evaluate. Being upfront with your lender about what you intend to use your money is important. Dishonesty on any part of your application may result in your application being unsuccessful.

How do credit cards affect your credit score?

Whilst different bureaus have different score ranges, the rule of thumb is that any credit score over 650 is considered ‘good’. Credit cards do have the potential to influence this, mainly through applying for credit cards. Opening one credit account is unlikely to impact you heavily. However, multiple applications for cards within a short period is likely to alter your credit score. This is because applying for a credit card or a loan is noted as an enquiry. And, as your credit report displays any enquiries for five years, these applications are factored into your score.

To ensure your credit cards aren’t hurting your credit score, do your best to keep them active and open with low balances. The better your credit score, the better the credit card you will be able to access. Potentially meaning you will have access to greater rewards. From there, you may be able to use a virtual credit card online.

How long does it take to raise your credit score?

How long it takes you to repair your credit score depends on what information is currently on your credit report. Here are the typical listing time frames for certain credit behaviours:

Two years

  • Your repayment history

Five years

  • Overdue accounts listed as defaults
  • Credit enquiries
  • Bankruptcy (depending on the severity)
  • Court judgements

Seven years

  • Any overdue accounts listed as a serious credit infringement
  • Fraud

Your biggest ally when it comes to credit repair is time. Consider developing new habits in the meantime so that when one of these defaults does remove itself from your report, you will replace it with healthy practices. Hopefully, you’ll start to see some improvements.

What is a credit card limit?

Credit limits are not a tricky concept to wrap your head around. If your credit card has a $9,500 limit, you cannot have more than $9,500 in debt on that card. Your credit limit calculates on many factors. Namely, your credit history, the card itself, your existing debt, income, and employment. Income is how much you earn, and employment being how consistent your employment is. When you apply, this calculates for you. If you want to change your current limit or don’t believe your limit is high enough, you will need to submit a request with your provider to have it increased or decreased.

With some cards, you can exceed your credit limit, although you may receive one of two consequences. Typically, you will either be charged a fee or the transaction will decline. If you do get charged an ‘over the limit fee’, it could be as high as $40 per transaction. Before setting your credit limit consider your circumstances and plan accordingly. It’s always best to act in a responsible manner when dealing with debt and credit.

Do you even need a virtual credit card?

There are many misconceptions surrounding credit cards, the most popular of these being that you need one to build good credit. Whilst a credit card may make it easier, you don’t need to rely on credit to build your credit score. You can instead do this by paying any debt and car payments on time, building your assets with cash purchases, and working a well paying, stable job for a good debt-to-income ratio.

Another credit card misconception is that you need one for emergencies. One way to avoid this is to establish a substantial emergency fund in a separate account that you can fall back on, should you need to.

Credit cards have their positive aspects, if you use them correctly. However, they can create temptation and potentially lead to overspending. After all, in a sense, you’ve received approval to spend up to a predetermined limit. As a result, you must do what you can to manage your card effectively. In other words, it might be best to keep it for emergencies only.

Credit cards and buy now pay later schemes

A similar method to paying by credit card is using a buy now pay later scheme (BNPL). In case you haven’t heard the term before, BNPL allows you to purchase an item and pay it off over time through a series of small instalments. Generally, the costs are divided into four fortnightly instalments. Best of all, you receive the item upfront.

BNPL is becoming more and more common in Australia and, if you want to become a user, you will have to create an account through the service provider rather than a bank. BNPL can be helpful in some cases as, unlike with credit cards, payments do not incur interest. Moreover, you get the item today, while dividing the costs over a period of that’s manageable for you. However, late fees may apply if you fail to make your payments on the scheduled dates.

Your BNPL habits may not affect your credit score, so long as you make your payments on time. However, they could impact your instant loan approval chances if you have a history of missed or late payments.

Virtual credit cards, BNPL and personal loans

The service you opt for to obtain a little extra credit depends on your circumstances. If you already have a credit card and have a large amount of online shopping to do, yet are worried about potential credit card fraud, a virtual credit card may be the right choice for you.

If you don’t have a credit card and need to get a little bit of shopping done between paycheques, a buy-now-pay-later service could be perfect for you. However, before you embark down the BNPL road, ensure you are ready to deal with the repayments and that you don’t overspend just because the sum looks smaller.

Finally, if it’s a more significant sum you’re chasing to cover a one-off expense, you may require a personal loan. There’s a loan for everything and everyone these days, and if it’s a personal loan that you need, Monzi might be able to help you. Apply from $300 to $10,000 now. You might cover anything from car repairs to last-minute travel.

Does Monzi work with virtual credit cards?

Here at Monzi, we don’t provide virtual credit cards, or any other payment methods like Paywave. Instead, we work with lenders offering quick cash loans from $300 to $10,000. And our service is completely free!

All you have to do is hit ‘apply now’ to get started. Tell us a little about yourself, and then it’s over to us to try and find a lender that’s willing to assess your application.

We’re 100% online, meaning you can apply for loans 24/7. So, when you need us, we’ll be a touch of a button away!

Let’s be friends!

Keep us in your back pocket…literally. Apply for cash on your mobile or follow us on Facebook, Instagram, Twitter and Pinterest.

If you have any questions concerning our services, feel free to get in touch with the friendly team at We’d love to hear from you!

Finally, for more information, check out Moneysmart’s guide to personal loans to learn more.

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You won't use a penny to apply for our lender-finding service, but here's some costs you could expect from a lender

Loan amount

$300 - $2,000


12 months (minimum)

12 months (maximum)


20% upfront establishment fee

+ 4% monthly fee


Loan Amount of $1,000 over 6 months repayable weekly (25 weekly repayments). $1,000 (Principal Amount) + $200 (20% Establishment Fee) + $240 (fees based on 4% per month over 25 weeks) = $1,440 total repayable in 25 weekly installments of $57.60.

Under the current legislation, most small personal loan providers don’t charge an annual interest rate (you’ll know this as an APR) %. The maximum you will be charged is a flat 20% Establishment Fee and a flat 4% Monthly Fee. The maximum comparison rate on loans between $300 and $2000 is 199.43%. The minimum and maximum loan term is 12 months. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

Loan amount

$2,001 - $4,600


13 months (minimum)

24 months (maximum)


48% Annual Percentage Rate (APR)

67.41% Comparison Rate p.a.


Loan Amount of $3,000 over 18 months repayable weekly (78 weekly repayments). $3,000 (Principal Amount) + $400 (Establishment Fee) + $1,379.06 (reducing interest) = $4,779.06 total repayable over 18 months with weekly installments of $61.27.

The Annual Percentage Rate (APR) for Secured Medium Loans is 48%. The Typical Comparison Rate is 67.41% p.a. The minimum loan term is 13 months and the maximum loan term is 24 months. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan. Click here to see a worked example.

Loan amount

$5,000 - $10,000


13 months (minimum)

24 months (maximum)


21.24% Annual Percentage Rate (APR)

48% Comparison Rate p.a.


Loan Amount of $10,000 over 24 months repayable weekly (104 weekly repayments). $10,000 (Principal Amount) + $5,577.12 (Interest) = $15,577.12 total repayable over 24 months with weekly installments of $149.78.

The Annual Percentage Rate (APR) for Secured Large Amount Loans is 48%. Maximum Comparison Rate is 48% p.a. The minimum loan term is 13 months and the maximum loan term is 24 months. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan. Click here to see a worked example.