The 5 Best Virtual Credit Cards in 2024

Though we increasingly manage business expenses and routine transactions online, one payment processing segment hasn’t quite fully caught up to the times – physical credit cards. Often subject to loss, theft, leaks, hacks, and fraud, physical credit cards are increasingly a liability for business owners of all sizes and types.

Virtual business credit cards step in to bridge the gap between physical card management and credit accounts and full-blown digitization through payment apps or digital wallets. This means you can maximize physical credit card advantages like rewards and ease of use with virtual credit card benefits, including improved security and employee spending management.

What is a Virtual Credit Card for Businesses?

Practically speaking, a virtual credit card for businesses operates much like a physical credit card for businesses – but virtually. Their digital nature means virtual credit cards can be used for select or individual transactions and effectively discarded.

For example, when using a virtual credit card provider, you can generate a one-time card number, expiration date, and security code if you must enter billing data for a software subscription trial period. In this case, the virtual credit card acts as a protection against unauthorized billing after the trial period ends and reduces the time forced to dig through monthly statements or cancel unused accounts.

Oftentimes, your virtual credit card is linked to a physical card. This further helps prevent fraud, as the physical card details can be reserved for specific circumstances while the virtual, generated card information can be used for most day-to-day, non-recurring expenses.

Virtual Business Credit Cards vs. Payment Apps vs. Digital Wallets

Though the terms may seem interchangeable and do admittedly describe very similar tools, there are distinct and important differences between virtual credit cards, payment apps, and digital wallets:

Digital wallets, like Apple Pay, Google Pay, and PayPal, store your card information securely. When you make an in-person or digital purchase, the digital wallet generates a unique, one-time authentication and communicates that alongside transaction data to the recipient or payee. In this case, though your enrolled physical card is charged, no actual card data is exchanged between buyer and seller.

Payment apps like CashApp or Venmo function much like digital wallets but also tend to include features similar to banking platforms. For example, you can carry a balance on your Venmo account to pay vendors, whereas digital wallets only tap into existing physical cards. However, payment apps are increasingly offering physical and virtual cards, so there tends to be a fair amount of overlap between payment apps and virtual credit cards.

Virtual credit cards are digitally generated credit card information that’s used for specific and (generally) non-recurring transactions. Virtual credit cards can be tied to physical cards or exist solely in the digital space. Virtual credit cards can be used for non-recurring transactions like subscriptions. However, check with the virtual credit card provider first to determine whether there’s a “best by” date for the number before it declines automated payments.

Key Benefits of Virtual Credit Cards for Businesses

The top benefits of virtual credit cards vary depending on your unique financial needs, but most users enjoy these common advantages of virtual credit cards:

Security

The primary benefit that affects all users, regardless of business size, type, or scale, is the sheer security advantage that virtual credit cards offer. Because they’re generated on a one-off basis, there’s far less risk of card compromise through data leaks or hacks. And, even if you have a physical card tied to the virtual credit cards, you can keep your plastic locked up or in a safe place to use when needed, reducing the risk of theft or loss.

Expense Management

My prior example – using a virtual credit card for a trial subscription – is one of virtual credit cards' most unique and wide-reaching benefits. Because so many products, tools, and services exist on a subscription-based or recurring cost model, we often overextend ourselves with a slew of unused SaaS products eating into cash flow. With a virtual credit card, you can be sure there won’t be forgotten or unauthorized charges for recurring subscriptions incurred month after month.

At the same time, virtual business credit cards can facilitate credit card reconciliation because, instead of using a range of cards for specific uses, you can generate as many virtual credit cards as needed while their respective transactions remain tied to the primary account.

Other Benefits

While you may or may not leverage them to their fullest, peripheral and additional benefits to using a virtual credit card include:

• Managing employee spending by issuing virtual card numbers on an as-needed basis.
• Improved cashback or rewards opportunities by issuing many virtual card numbers to staff tied to a central account.
• Reduced reliance on in-person transactions, as virtual credit cards are generally only usable online or (sometimes) over the phone.

Why Do You Need a Virtual Credit Card?

If your business transactions and expenses are primarily digital, i.e., online B2B payments, software subscriptions, online vendor payments, platform-based contracting, and similar, virtual credit cards can help keep your credit management ecosystem safe and under control. Likewise, if you want to keep a lid on employee credit utilization without hamstringing their operational efficiency, issuing virtual credit card numbers to staff can help on both counts.

How to Get a Virtual Credit Card

If you use a major business credit card like American Express, Capital One, or similar issuers, they likely already offer virtual credit card services – just give them a call. If not, find one of the many issuing agencies whose terms, conditions, and rewards most benefit your business.

Once you have an account, generating a virtual credit card number is usually as easy as opening an app on your phone or clicking an installed add-on in your browser. Depending on the issuer, from there, you can monitor transactions tied to a specific virtual card number or terminate a virtual credit card’s future usage.

In any case, remember to closely monitor your account to ensure everything is above board and there are no nasty surprises at reconciliation time!

Five Best Virtual Credit Cards              

While the best virtual card companies are hard to pin down and vary based on industry, use cases, and more, these five virtual credit cards tend to be most popular among a wide demographic sample of business owners:

American Express Blue Business Cash

American Express is, generally, one of the most popular credit cards among business owners, and its offerings as one of the top virtual card companies further reinforce its popularity. AmEx’s Express Blue Business Cash card also gives account holders 2% automatic cash back on up to $50,000 in annual purchases, with 1% cash back for every dollar thereafter.

American Express’ virtual credit cards work with a Google Chrome or Android add-on that replaces your physical card number with a virtual number with a uniquely generated security code for each transaction.

Venmo Virtual Credit Card

The popular payment app is dipping its toes into credit and lending with great success thus far, setting it apart as a “FinTech-first” competitor among the many virtual credit card companies. Acknowledging the digital nature of its customers’ business and personal shopping preferences, Venmo automatically integrates a virtual card number service into your credit card experience through the app. You choose when to use the virtual card number vs. the physical card, and both are eligible for up to 3% cash back on some transactions.

American Express Business Platinum

AmEx’s Platinum card is targeted toward higher spenders than its Blue Business Cash counterpart, but its virtual card offerings work much the same. The Platinum Business card, instead of cash back, gives account holders 1.5 points per dollar spent in some business categories like software subscriptions, with other segments like travel and hotels earning as much as 5 points per dollar.

Capital One Spark Miles

Capital One’s Spark Miles card lets you rapidly stack up miles for flights, hotels, and more by allowing as many virtual credit card numbers to be issued as needed. This means you can assign a unique virtual credit card number to as many employees as you deem fit, with applicable use restrictions, and their spending contributes to your primary account’s miles and rewards earning potential.

Extend

A unique offering among virtual credit cards, Extend is an API-enabled service that lets you turn nearly any existing corporate credit card into a virtual card. Once you have an account with Extend, you register eligible cards (which includes AmEx, BMO, Regions Bank, and more) and can create as many single-use or extended-use virtual credit cards as needed.

Conclusion

If you use business credit cards often, there’s virtually no downside to using their digital counterpart. Virtual card companies improve security and access while offering the same benefits and advantages you already enjoy by working with your credit card provider of choice.

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