What is a Virtual Credit Card?

 

We’ve talked about credit cards before, but recently I heard about a virtual credit card. What is that?

A virtual credit card is a temporary or disposable card number associated with your existing credit card account, and does not come with a physical card. Virtual credit cards are also known as virtual account numbers, and are used to make online transactions more secure.

How does a virtual card make online purchases safer?

When you use a virtual credit card, the merchant you are paying to never gets to know your actual credit card number, so your original card stays protected. You can also set a maximum charge limit and a short expiry date for most virtual credit cards to further reduce the chances of fraud.

How does a virtual credit card work?

For all practical purposes, a virtual credit card works exactly like a regular credit card. While making an online purchase, you just provide the virtual credit card number instead of the regular credit card number. The charge would appear on your monthly statement just like any regular purchase, and you would also continue to earn rewards for your purchases.

Can a refund be issued if I have used a virtual credit card for the original purchase?

Of course! In this case, the refund amount would go back to your original credit card.

Are there any limitations to virtual credit cards?

Yes – a major limitation is that they can only be used online. Since there is no physical card, they cannot be used at any retail location that requires swiping of the physical card.

How much does a virtual credit card cost?

Most banks offer this service totally free to their card holders.

How can I get a virtual credit card?

You just need to log on to your bank’s website or mobile app to create a virtual credit card. You can also use one of the third-party services that offer virtual credit cards based on your existing cards.

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