Virtual credit cards – All you Should Know & Why You Should get One

Virtual credit cards – All you Should Know & Why You Should get One.

Virtual credit cards: Virtual credit cards are digital copies of real credit cards typically featuring different number of cards and expiry dates. They can be used online or by phone to help protect details of your actual account.

Virtual credit cards - All you Should Know & Why You Should get One.

Virtual credit cards are real, physical credit card versions digital. You can use them when shopping online or by phone, instead of your actual card details, to help prevent credit card fraud and identity theft along with myriad other purposes.

What is a credit card?

A credit card is a plastic card that suits your wallet comfortably and allows you to make cash-free transactions. Each credit card has a unique number embossed and a credit limit assigned. With their card, the user can buy services and goods and pay interest on the money spent each month, instead of paying the full amount used.

Each month’s unpaid amount is carried forward into the next month and the interest is calculated accordingly. Most cards usually have a 10 percent to 30 percent interest rate; it is best to review the interest rate before a credit card is issued. Most cards give their customers the benefit of rewards and provide purchasing points from similar retail or online stores.

There is also an annual fee associated with some credit cards, while free credit cards are also available. Companies that issue a credit card earn through user-paid interest, annual fees, and late fees. We also charge retailers, via credit card, for every sale.

What is a Virtual Credit Card?

A virtual card serves as a representation of the actual card to be disposed of. If there’s something going on with a virtual card, you can just delete it and get another. Security and convenience are the two main purposes of using Virtual account numbers (VANs). Instead of giving your actual credit card information to the merchants, you may simply send the virtual card number.

Instead, if the website or organization faces some security problem, you can easily cancel the virtual card. You don’t have to worry about criminals making all sorts of illegal purchases, because they’d have only the one small amount.

Read Also: Lane Bryant Credit Card Review.

Everything you Need to Know About Virtual Credit Cards

Here’s a summary of just about everything you need to know about virtual credit cards:

  • They help protect your card information: If a hacker steals your virtual credit card it won’t compromise your actual account, improving your overall card security.
  • They’re only for online and phone purchases: Virtual credit cards can be used online or on the phone, but not for in-store purchases.
  • The card details are different: Your virtual card will usually have a different account number, security code, and expiration date.
  • The features vary: The features you get with virtual cards will depend on your card issuer.
  • Some are single-use only: A virtual number may be limited to a single transaction.
  • May be merchant-specific: A particular virtual number may be limited to transactions with a single merchant.
  • Might have spending limits: You can often set individual spending limits for each virtual card you create.
  • Purchases show up as normal: Any purchases or transactions you make will show up in your account as they normally would, although they may be tagged with the virtual number.
  • Returns shouldn’t be a hassle: Card issuers say that virtual card numbers shouldn’t cause problems when returning purchases made with them.

Virtual cards don’t come with any extra security measures compared to physical cards. They’re just an extra layer on top of the fraud protections you already have. The CARD Act limits your personal fraud liability to $50, and the major credit card issuers go even further by providing $0 liability policies.

A virtual card doesn’t give you anything more than that, but it does serve a bit like a first line of defense that you can easily replace. Thieves will get your disposable card details instead of your actual credit card details.

Where Can I Get a Virtual Credit Card Number?

Where Can I Get a Virtual Credit Card Number?

There are currently only four credit card issuers that provide virtual account numbers. We’ll summarize them here, and then go into more detail below.

There are also several digital wallet services that can perform a very similar function for online transactions (and in store as well). You can learn more about them below.

Virtual Account Provider Details
Capital One Eno
Citi Virtual Card Accounts
Apple Card (Apple & Goldman Sachs)
Brex
Stripe
  • Provided instantly after uploading your company logo into the Stripe Dashboard

When to Use Virtual Credit Card Numbers

How secure do you feel when shopping online? Are you willing to give your real account details to any website you might make a purchase from? Your answers probably depend on your temperament, and where you tend to shop.

Here are some situations in which you might want to use a virtual credit card, for security or otherwise:

  • Online shopping: You may want to use disposable credit cards for all your online purchases, just to be safe or for convenience.
  • Subscription services: Say you only want to subscribe to Netflix for six months. Pay with a virtual card that will expire by then, and Netflix won’t be able to charge you after that date.
  • Convenience: If you use virtual numbers for online subscriptions and you lose your physical card, you won’t have to reset all that payment information when you get a new physical card number (for Capital One cardholders, and perhaps some other issuers).
  • Potentially risky websites: It might be easiest to only use virtual cards for websites or companies that seem shady, or with new businesses.
  • You’re worried about data breaches: Data breaches are all too common. But if hackers steal your virtual card number, you can just sigh in relief as you create a new one.
  • You’ve been a victim of identity theft or credit card fraud: If you’ve already gone through the worry and hassle of identity theft or credit card fraud, you might want to take extra steps to help prevent it from ever happening again.
  • Give your child a spending method: You can give your kids a virtual credit card with a spending limit, instead of handing over your actual card.

Steps to Take When Getting a Virtual Credit Card

Setting up a virtual credit card number should be pretty easy. The process may vary a bit by the issuer, but it should (usually) only take a few simple steps, like the following:

  1. Check to see if your credit card account offers virtual card numbers, or apply for a credit card if you don’t already have one. You need an open credit card account in order to use a virtual card. A card you’re currently carrying may already give you virtual account access, so do some research to see if that’s the case. If not, browse the virtual account providers we listed above, and search for an option that complements your spending habits.
  2. Log in to your credit card account online and find the virtual credit card feature. You’ll typically find this option in your account settings, so check there first.
  3. Generate the card information. You’ll get a new 16-digit credit card number and 3-digit security code every time you create a virtual card. In some cases, you’ll be able to choose the expiration date, though certain issuers with merchant-specific options will set that automatically.
  4. Use your virtual card as you would any card. Aside from a few minor differences — merchant exclusivity and the fact that they don’t physically exist, for example — virtual credit cards are pretty much the same as normal credit cards. You input the applicable information to make purchases, and those purchases are charged to your account.

How Do You Shop with a Virtual Credit Card?

  • First of all, virtual credit cards can only be used online or over the phone. (If you’re worried about the security of your credit card number in a physical retailer, you might want to consider a mobile payment app on your phone; these apps, like Apple Pay and Google Pay, also use one-time tokens.)
  • So, you’re online and your (virtual) cart is full. When you’re ready to check out, you’ll need to open your virtual credit card’s site. Some banks that support virtual credit cards are integrating browser extensions, but some require you to log into your account on their website.
  • In either case, once you’ve signed in to your account with a username and password, you can generate a one-time token. It’ll include a unique card number and security code. Depending on your servicer, you may be offered an expiration date, or you may have the chance to set the expiration date for yourself.
  • You may be able to set a spending limit on the card number, too. (That can be useful if you want to share a card with someone else, say a child or a roommate.)
  • At this point, you can go ahead and pay with the virtual card’s details.
  • If your virtual card is linked to a “normal” credit card you have with a bank, transactions will show up on your statement like usual.
  • Returns also operate normally if your virtual credit card is linked to your regular account. You send the item back, and the amount is refunded to the virtual number. Even if it was set for one-time use, the refund credit should still appear normally on your statement.

Conclusion

Conclusion

One thing to be vigilant about: as virtual credit cards don’t have a physical version by design, you can’t use it in any situation where you need a physical card present. This isn’t all about online purchases, but if you use the card to book tickets online, you should print out your tickets instead of relying on the window of the call!

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