Virtual credit card: From benefits to uses; all you need to know

In our rapidly evolving financial landscape, virtual credit cards have emerged as a convenient and secure payment option. They aim to simplify credit transactions while reducing the risks of theft and loss compared to traditional physical credit cards.

What is a virtual credit card?

A virtual credit card is the digital form of a physical credit card. It contains all the essential details of a physical card, including a 16-digit card number, CVV, and expiry date. Typically, a virtual credit card is a short-term card that serves as an add-on to your existing credit card, allowing for a limited number of transactions.

How does it work?

Functioning similarly to a physical credit card, a virtual credit card offers enhanced security features. When you make a payment using a virtual card, a one-time password (OTP) is generated, which remains valid for only a few minutes. This ensures that the same password cannot be reused for future transactions, significantly reducing the risk of fraud.

How to use a virtual credit card

Using a virtual credit card is straightforward and does not require swiping a physical card. Follow these steps to make a payment:

1. Go through the website where you want to make the payment.
2. Choose the virtual credit card payment option.
3. Enter your virtual credit card number, expiry date, and CVV.
4. Upon entering the card details, an OTP is sent to your registered device, valid for a few minutes.
5. Input the OTP and complete the checkout process; your transaction is now complete.

Benefits of using a virtual credit card

• Easy to Use: Virtual credit cards are easily accessible via your phone or online accounts, eliminating the need to carry a physical card.
• Secure Transactions: The risk of losing a physical card is eliminated. Many platforms also offer built-in digital fraud prevention tools to protect users from fraudulent transactions.
• Spending Limits: You can set spending limits and expiration dates for your virtual credit card, allowing for better financial management and reduced risk of overspending.

Drawbacks of using a virtual credit card

• Limited Use: Virtual credit cards are primarily designed for online payments and cannot be used for offline transactions like physical cards.
• Limited Acceptance: Not all online retailers accept virtual credit cards, which may limit their versatility for all your online purchases.
• Limited Validity: Virtual credit cards typically have temporary validity, usually lasting 24 to 48 hours, though this may vary by issuer.

Conclusion

Virtual credit cards represent a significant advancement over physical credit cards, offering enhanced security and convenience. They minimize the risks of fraud while streamlining online transactions, making them an appealing option for modern consumers.