What is a Virtual Credit Card: Everything You Should Know

Credit cards have become a part and parcel of an individual’s life. In the last few years, credit cards have taken an important place in our lives as they come in very handy and fulfill every monetary need. In times of emergency when we tend to run out of cash, credit cards play a crucial role and help us deal with such situations. But as the use of credit cards is increasing, so are the frauds related to it as well. Therefore, to deal with all such situations, a virtual credit card came into existence that protects an individual from any such fraud taking place. Also, as there is always a risk of loss or theft of a physical credit card, you do not have to worry about the loss or theft of this credit card as it is a virtual credit card. Now before discussing the features and benefits of a virtual credit card, let us first understand what a virtual credit card actually is.

Virtual Credit Card: Meaning

Virtual credit cards are those credit cards that are not available in physical form but are available online. These cards do not exist in a plastic form. These cards have been specially designed to complete all online transactions. This card is just like any other normal credit card carrying all such information as the name on the card, carhd number, expiry date, CVV, etc. The only difference is that a normal credit card is in a physical form and this credit card is in a virtual form.

These credit cards are quite easy to use and safe to carry as you do not have to worry about your card being lost or stolen. Your credit card information cannot be stolen as all such information about credit cards is not physically available in the market but is just with the cardholder in an online form. You can start using this card right away and you do not have to wait for a physical card or ATM Pin to be delivered to your residence.

Working of a Virtual Credit Card

Virtual credit cards offer an extra layer of security to your online transactions. When a cardholder shops online by using a virtual credit card, all the information related to a physical credit card is kept safe masking up a 16-digit number printed on the card and generating a new temporary number that replaces the number on the card. If we talk in technical terms, a unique number is randomly generated with the computer algorithms, which in a way, are very similar to the working of EMV chip cards used for present-day purchases.

Upon the successful generation of the unique number of the card, you can make purchases in the similar manner in which you used to make purchases with a physical credit card. But at the time of checkout, the customer will enter that unique number generated through computer algorithms specific to a particular merchant or transaction, instead of the actual card number to confuse the EMV chip technology. Most virtual credit cards come with limitations on when and where we can use virtual credit cards. This is done to save cardholders from their data being stolen or used by the data thieves.

Benefits of a Virtual Credit Card

Virtual credit cards offer a variety of features and benefits and provide safety to cardholders. Following are the detailed benefits of this credit card –

Convenient

Virtual credit cards are quite convenient in comparison to physical credit cards as you are free from the hassle of carrying a credit card. All the important information related to a credit card like a credit card number, expiry date of the card, and CVV number are available online and can be easily accessed through your mobile phone.

Flexible

All the transactions can be made using this credit card through any bank account which is enabled on internet banking. Virtual credit cards can be used for making transactions of any amount but only on those merchant sites which accept virtual credit cards. This makes the usage of virtual credit cards more flexible than using a physical credit card.

Better security

Most virtual credit cards come with an option of one-time usage and also can be used only for a specific period of time. Since these credit cards can only be used online, hence the chances of fraud are negligible

Easy to Cancel

These virtual credit cards are quite easy to cancel. You can easily cancel your virtual credit card at your ease using your smartphone.

Disadvantages of using a Virtual Credit Card

Though there are benefits of using a virtual credit card, there are disadvantages as well.

Since a virtual credit card is a digital credit card, it cannot be used for transactions at merchant outlets where a card needs to be swiped.
Cash withdrawal is not possible using a virtual credit card.
Since these credit cards come with a very short period of time, i.e, they expire quite soon, hence, it can cause an issue for subscriptions purchased using this credit card.

Virtual Credit Cards in India

An individual can get a virtual credit card either by the bank’s side if the customer has a credit card with one of the banks that provide the facility of the virtual credit cards. Or you can also have a virtual credit card by linking a pre-existing card from another bank to an online service. Following is the list of banks that provide the facility of virtual credit cards in India –

HDFC NetSafe Credit Card by HDFC Bank
SBI Corporate Virtual Credit Card by SBI
Kotak Mahindra Bank Netcard by Kotak Bank
ICICI Bank Virtual Credit Card by ICICI Bank
Axis Bank FreeCharge Plus Credit Card by Axis Bank
HSBC Advantage Virtual Card by HSBC Bank

Bottom Line

Virtual credit cards are add-on Visa credit cards issued on the primary credit card. This card does not have any physical existence and is just present online but has all the information like the credit card number, expiry dates, and CVV just like a normal credit card. On the one hand, where this card has several advantages like better security features, convenience, and flexibility which quite adds to the benefits of having a virtual credit card, on the other hand, it comes with some drawbacks as well. A virtual credit card cannot be used at physical stores, you cannot withdraw cash using a virtual credit card, etc. But because of the benefits that this card provides, they have a bright future in the coming era.