A virtual credit card is a disposable payment card that can be used to make purchases or payments over the Internet. These cards provide inherent protection to cardholders, since the user is provided a new credit card number every time s/he makes a purchase on the Internet. This is why this card is sometimes also called the "single-use card numbers."
Virtual credit cards are available as the MasterCard Gift Cards (by MasterCard) and Virtual Visa Gift Cards (by Visa), and work in a way that is similar to an online gift voucher. Virtual credit cards are issued by most credit card issuers and major banks.
Virtual Credit Card: Features
Although a virtual credit card is very similar to a regular credit card, it has several distinguishing features, such as:
It works like a prepaid card, where the credit limit equals the amount you want to be available on the card.
A new credit card number is issued every time a cardholder wants to make a purchase. Thus, there is no possibility of your credit card being used fraudulently.
- Cardholders can set the monetary limit and the expiry date for their virtual cards.
- While the virtual number of a card is linked to a real credit card number, only the cardholder has the knowledge of this information.
Virtual Credit Card: Benefits
Virtual credit cards:
- Are convenient to use, since all the information is stored online. This eliminates the need to remember your card number or search for the details.
- Enable cardholders to complete a purchase transaction within a few clicks.
- Are very secure and provide safety to people against identity theft.
- Can be used by companies that need to issue “trial” cards.
Problems Associated with the Virtual Credit Card
Virtual credit cards:
- Cannot be used for offline transactions.
- Have very limited use in online purchases. The reason for this is that you need to show a physical card to complete certain transactions, such as booking an airline ticket or pre-ordering CDs or books.
- The expiry date of these cards is short.
- Are slow as compared to physical credit cards in terms of processing an online transaction.
Virtual credit cards are a more secure option for making purchases and payments, especially for those who prefer an online shopping and payment experience.
How to Apply for Virtual Credit Card
Although the application process differs slightly from one provider to another, the broad steps involve:
- Signing up at a credit card website.
- Downloading the security software on to your personal computer/laptop.
- Applying for a credit card number when you want to make a purchase or payment. This is a randomly generated number that can then be used at most online store.