Pros and Cons of Virtual Credit Cards

Virtual credit cards are digital card numbers you use for online and in-app purchases instead of pulling out a physical piece of plastic.

They can add security and control to your spending—but they’re not perfect for every situation.

KOHO Essential

Your get both a Prepaid Mastercard and Virtual card for everyday spending and online shopping,

With KOHO Essential Plan, you get:

• It has a low monthly plan fee that can be waived when you set up direct deposit or add +$1,000.

• Get your Virtual Card to start spending online right away, securely.

• Use a prepaid Mastercard® for groceries, bills, subscriptions, and travel.

• Grow your savings with a 2% interest savings rate on your entire balance.

• Earn 1% cash back on groceries, eating & drinking, and transportation.

• You can add Credit Building for $10/month, it's an affordable way to build your credit history.

• Enjoy unlimited transactions and free e-transfers (never worry about fees when sending money to someone again).

Pros of Virtual Credit Cards

1. Better Security for Online Purchases

Virtual cards keep your main card number off the internet. If a merchant is compromised, you can:

• Freeze or replace the virtual card

• Keep your core account or main card number safe

This reduces the damage if your details ever leak.

2. Great for Subscriptions and Trials

You can use a virtual card number for:

• Streaming services

• Free trials

• Apps and other recurring charges

If you cancel and don’t fully trust the merchant, you can change or disable the virtual details instead of replacing your entire card.

3. More Control Over Specific Merchants

Some virtual card setups let you:

• Create cards just for one merchant

• Set limits or expiry on that card

That’s helpful if you want tighter control over spending with certain sites or services.

Cons of Virtual Credit Cards

1. Not Always Ideal for In-Person Purchases

Virtual cards are mainly for:

• Online checkouts

• In-app purchases

• Sometimes tap-to-pay via a mobile wallet

If a merchant doesn’t accept mobile wallets or you need to insert/swipe, you’ll still need a physical card.

2. Phone- and App-Dependent

Because virtual cards live in your:

• Phone

• Banking or fintech app

• Digital wallet

You’re relying on battery + connectivity to access details or make changes. If your phone dies, you lose access until it’s charged.

3. Doesn’t Fix Overspending by Itself

Virtual cards help with security, but they don’t automatically fix:

• Overspending

• Carrying balances

• High interest debt

If they’re tied to a traditional credit line and you’re not careful, you can still end up with big balances and interest charges.

When Virtual Cards Make the Most Sense

They’re especially useful when you:

• Shop online frequently

• Try lots of subscriptions and trials

• Don’t want your main card number stored everywhere

• Like being able to shut down one card without touching your whole account