No matter whether you want to book a taxi, buy a phone, or book an airplane ticket, everything can be done online, you name it. The best part is that you can do anything right from the comfort of your home, without standing in long queues. Furthermore, there is no need to carry cash or wait in long queues at stores. Instead, you can now use “Credit Cards” to buy products and services online easily.
However, if you feel uneasy about entering your credit card details on websites, there is a popularly emerging alternative: a “Virtual Credit Card.” One of its major highlights is that it helps protect your information while you shop online.
In this post, we’ll dive into the ins and outs of having a virtual credit card.
Definition of a Virtual Credit Card
To put it simply, a virtual credit card (VCC) is a modern, one-time-use credit card designed for online transactions. Unlike traditional credit cards, a VCC has no physical form and exists only in digital format. When using a VCC, all necessary information, such as the card number, expiration date, and CVV is displayed online, just like with a physical credit card.
Credit card issuers provide VCCs as an additional feature to your primary credit card. These virtual credit cards are typically temporary, offering a safe and convenient way to shop online. However, because they are purely digital, VCCs cannot be used for in-person purchases at physical stores. Thus, they make an excellent choice for those who prioritize security and convenience in their online shopping experience.
Eligibility Criteria for a Virtual Credit Card
Here are the eligibility criteria for having a Virtual Credit Card.
- No Credit History Required
Unlike traditional credit cards, a virtual credit card does not require an established credit history.
- No Proof of Income Needed
You don’t need to provide proof of income when applying for a virtual credit card.
- Eligible Customers
All resident Indian customers, NRE (Non-Resident External) customers, and foreigners who are registered for net banking access are eligible for a virtual credit card.
- Bank Account Requirement
If you want to qualify for a virtual credit card, you must have at least one valid current or savings account with the issuing bank.
Salient Features of a Virtual Credit Card
Let’s take a look at the features and benefits of having a virtual credit card.
- Limited Validity
One of the biggest features and benefits of a VCC is that it is designed for temporary use. It is often valid for a single transaction for a short period of time, but the exact validity period can vary depending on the card issuer. Furthermore, you will have the flexibility to cancel your virtual credit card anytime if it’s no longer needed.
- Enhanced Security
Another major feature of a virtual credit card is that it provides an added layer of security for online transactions. Unlike physical cards, you don’t need to link or store your card information online, which helps protect your sensitive data from breaches and cyber threats. Since virtual cards are not physically swiped or carried, the risk of theft is eliminated.
- Easy Availability
Another major benefit of having a virtual credit card is that it is easily accessible online through mobile apps and bank websites. Once you apply for a virtual card, a unique virtual care number is generated instantly. Furthermore, you can use the number for online shopping or making payments, which offers the convenience of instant availability.
- Simple Onboarding Process
Remember that obtaining a virtual credit card is simple and does not involve stringent eligibility criteria. Furthermore, the application process is simple and user-friendly. You can use your virtual card for both domestic and international transactions, and there are usually no fees associated with obtaining it.
- Convenient Transfer of Unused Amount
Another major benefit of choosing a virtual credit card is that if it expires with an unused limit, you don’t have to worry about losing the remaining balance. The unused limit is transferred back to your primary credit card which ensures your funds are preserved.
- Quick & Hassle-Free Blocking Facility
Last but not least, virtual credit cards offer an easy blocking facility to enhance safety and confidentiality. If you suspect any unauthorized access to your card, you can simply block it online through your card issuer’s website or mobile app. It ensures you can act swiftly to protect your finances.
How to Use a Virtual Credit Card?
Here is a list of the steps that you may need to follow to use a virtual credit card. Let’s discuss them in detail.
- In the first step, you will need to visit the merchant’s website or app where you want to make a purchase.
- After that, you will need to select the product or service you wish to buy and add it to your cart.
- Then, during checkout, you will need to enter your virtual credit card information. It includes the virtual credit card number, validity date, CVV, or any other required details.
- In the next step, you will need to receive a One-Time Password (OTP) on your registered mobile number. Then, enter the OTP to authorize the transaction.
- Once the payment is successful, you will receive a real-time update confirming the amount debited from your virtual credit card. The transaction details will also appear on your virtual credit card statement.
Things to Consider Before Applying for a Virtual Credit Card
Let’s take a look at the factors to keep in mind before applying for a virtual credit card.
- Primary Credit card Requirement
One of the major factors to consider before applying for a virtual credit card is that you generally need to have an existing primary credit card with the issuing bank. Remember that virtual credit cards are offered as an additional feature or add-on to your primary card, so having a primary card is essential for eligibility.
- Cash Withdrawal Limitations
Another major factor to consider before applying for a VCC is that these cards are designed for online transactions and cannot be used to withdraw cash. If you need to access cash, you will need to use your primary credit card or another method for cash withdrawals.
- In-Store Use Restrictions
One major tip to keep in mind is that virtual credit cards are not suitable for in-person purchases at physical retail stores such as outlets or shopping malls. Since they exist only in digital form, they cannot be swiped or presented at a physical point of sale. Their utility is, therefore, limited to online shopping and transactions.
Conclusion
So, there you have it! Virtual credit cards offer several advantages over traditional credit cards. They enhance security by keeping your credit card details hidden from anyone other than yourself, which can reduce the risk of fraud. Since virtual credit cards are typically valid for a limited number of transactions, they can be easily discarded after use. Thus, this limited validity, combined with their digital nature, means that they are only visible to you, which significantly lowers the chances of fraud.
Frequently Asked Questions
Listed below are the frequently asked questions related to the virtual credit card.
No, virtual credit cards are only for online use. Since they don’t have a physical form, you cannot use them for in-store or offline transactions.
If you want to get a virtual credit card, all you need to do is simply contact your bank or any reputed financial institution that offers the card. They will guide you through the application process.
No, virtual credit cards are only available to primary cardholders currently. Please spare some time and check with your card issuer for the latest information.
Whether you can use your virtual credit card internationally depends on the card issuer. Ensure you contact them to find out the eligibility.
Most virtual credit card issuers do not charge a fee for issuing the card. However, it’s best to check with your bank or financial institution to confirm.
