Virtual Credit Cards

A virtual credit card is an electronic version of your physical credit card. It is available in a digital form and not in a physical form. However, all the details, such as card number, CVV, validity date and more are available online, mostly on the website of your credit card issuer.

Apart from being easy to use, a virtual credit card also provides security to its users. Virtual credit cards protect you from having your credit card information getting stolen by not being physically available in the market. However, this is a short-term credit card and allows a limited number of transactions. It is mostly provided by credit card issuers as an add-on card on the primary credit card.

Also read: Best Credit Cards in India

A virtual credit card keeps a physical credit card’s information safe when the cardholder shops online by creating a temporary card number to replace the 16-digit number printed on a plastic card. In technical terms, an operational number is randomly generated with a computer algorithm, quite similar to how modern EMV chip cards work for card-present purchases.

Once the number is generated, it can be used to make online purchases in a similar way just as any regular credit card. Here, instead of entering the actual credit card number in the payment box while shopping online, the customer mimics the EMV technology in the chip card by using a random number that is specific to that merchant or transaction. The only difference is that the majority of virtual credit cards have limitations on when and where they can be used, in order to prevent them from being used by data thieves.

Unlike physical credit cards, virtual credit cards offer numerous benefits for safer and convenient transactions. Some of the important features and benefits of virtual credit cards are as follows:

Improved Security: Virtual credit cards provide much more security than physical credit cards. Most virtual credit cards come with a one-time usage option and are valid for a specific period of time. As these cards can only be used online, so the chances of theft or fraud become minimal. The added benefit of limited use adds to its security.

Flexibility: You can make payments through a virtual credit card using your existing internet banking-enabled account. The card can be created for any amount and be used at any online merchant site accepting credit cards, which makes it much more flexible than physical credit cards.

Convenience: Virtual credit card has no physical form and all the important details, including CVV, card number, expiration date and more are available online which you easily access through a mobile phone. Hence, the hassle of carrying the physical card is completely out of the way.

Easy Cancellation: Virtual credit card provides a facility of easy cancellation to its users. In any case, if you want to cancel the card, you can do it effortlessly and easily through your smartphone.

Suggested read: Different Types of Credit Cards in India

No doubt, virtual credit cards offer many privileges, but as every coin has two sides, virtual credit cards also come with several limitations. Some of the limitations are listed below:

• You cannot use a virtual credit card at a merchant swipe machine as it is purely digital
• Returning the items from an online order to a physical location becomes challenging
• The ones with the short expiration date can cause issues for subscriptions
• You cannot withdraw cash using the virtual credit card

A virtual credit card allows you to perform all the functions that a physical credit card does. You can do everything online, from adding money to making transactions in a few taps. However, the virtual credit card is more secure as it comes with a 16-digit number which is specifically designed for a single use. Before opting for a virtual credit card one should know about all the terms related to it and how it differs from a physical credit card. Here are some of the differences which you should know about before applying for a virtual credit card:

Virtual Credit Card	Physical Credit Card
Account numbers are generated only for a single-use which ensures security	Fixed account numbers from the time of account opening
Cardholders can select spending limits	Spending limit settings are available only for selected issuers
Card can be used on multi-channels, including mobile apps, phone or website	Card can be used in-person, selected functions can be done online
Provides fraud protection as all the relevant details are saved online	Does not provide fraud protection and is more prone to card information theft
Comes in a digital form and is valid only for a limited period	Comes in a physical form and is valid for a few years
Usually comes with no annual charges	Usually comes with annual charges, but can be levied after certain conditions

Must read: How Credit Cards Work in India

A virtual credit card is available in two ways- either directly from the bank’s side if the customer has a credit card issued by one of the banks that provides this facility or by linking a pre-existing card from another bank to an online service. Given below is the list of different banks in India that provide virtual credit cards:

Bank Name	Card Name	Key Features
HDFC Bank	HDFC NetSafe	● Set credit limit for the NetSafe cards ● NetSafe card is a one-time use card
SBI	SBI Corporate Virtual Credit Card	● Accelerate payments to the suppliers ● Configurable controls for each transaction
Kotak Mahindra Bank	Kotak Mahindra Bank Netc@rd	● No fees for creation or use of Netc@rd ● Automatically expires after 24-48 hours
ICICI Bank	ICICI Bank Virtual Credit Card	● 1 reward point for every Rs. 200 spent ● The initial credit limit of the card is set to Re. 1
Axis Bank	Axis Bank FreeCharge Plus Credit Card	● Vouchers worth Rs. 700 on the activation ● Cashback on every transaction
HSBC	HSBC Advantage Virtual Card	● Can only be used for online shopping ● You can set card’s limit based on your purchase

How are virtual credit cards more secure than physical cards?

A virtual credit card allows secure online transactions as it reduces the risk of exposing the underlying credit card details to the vendor or merchant.

What limit do I get for a virtual credit card?

The initial credit limit of the virtual credit card is set to Re. 1. However, you can alter the maximum limit on the VCC within the overall limit of the primary card.

Can a separate card be issued to add-on cardholders as well?

No, the virtual credit card can be issued only to the primary cardholder.

Is it safer than the credit card I carry in my wallet?

The important details of a VCC like the card number, expiry date, etc., are all visible online. One can use these details to facilitate all online transactions and never be worried about losing the card or carrying it safely in the wallet.

Can I use my virtual credit card for international transactions?

Whether you can use your virtual credit card for international transactions or not, it totally depends on the issuer of your card.