The virtual credit card has garnered a lot of attention due to its ease of use and versatility. Today, you can get one quickly, without depending upon your credit score, and use it like any other credit card. In this article you will learn all about the virtual credit card, why to use one and where to get one from.
Online shopping has become a trend, especially with the emergence of global brands that make their products delivered to your doorstep, without requiring you to move out of your house. From household appliances to food, everything is now available online. However, within this comfort lies an issue for security as well, and we are here to talk about it.
In this post, we will be discussing what a virtual credit card is and the things to consider if you are thinking of getting one. Did you know that since online shopping became popular, it has attracted cybercriminals? This is because it is very easy for them, needing only a person’s credit card details and CVV number. The answer to this problem just may be to utilize a virtual credit card.
By definition, a virtual credit card is a prepaid credit card that does not have a credit limit, which would mean that you would not need to worry about any credit being compromised. These virtual credit cards are best suited for online shopping since any hacker or cybercriminal would not be able to use them beyond the loaded amount.
As its name suggest, a virtual credit card is virtual in nature and is it not physically issued. They only exist virtually and they do not have plastic at all. And since they are not physical cards, they can provide security and protection to your hard-earned money. They are randomly-generated numbers that are designed to secure your traditional credit card details when you shop online.
Having a virtual credit card is a very useful online service linked to your Net Banking account. All you need to do is log in to the portal and create a virtual credit card account. In a sense, it adds another layer of protection to your traditional credit card. Indeed, a virtual credit card is one of the safest options for your online shopping needs.
In effect, virtual credit cards are also prepaid cards. In its truest sense, it is a debit card that has no credit facility. In addition, you have the power to decide on the everyday credit limit of your virtual credit cards. All the important details such as the valid from date, card number, CVV, and the expiry date, are all presented online.
Online merchants normally save customer payment data for repeated use. However, convenience like this comes with a price. This is especially true if a hacker gains access to a merchant’s online storage, which contains your credit card information. So, if you ever did shop online by keying in your credit card data, you are technically at risk of credit card fraud.
However, with a virtual credit card, the stored credit card data can only be charged one time. With this, it can be assumed that even if the hacker takes hold of the card number, it will be deemed useless. This technology’s overall functionality is a lot like the EMV chip found on modern credit and debit cards; thus, preventing the storage, as well as misuse of static credit card information.
Although they utilize similar a premise, Virtual credit cards are a lot different from payment apps such as Android Pay and Apple Pay. Whenever you charge your credit card using a mobile payment application, the online merchant validates this transaction using a limited-use token, and not the actual credit number.
Essentially, these mobile payment apps are widely used, especially at brick-and-mortar retailers. Today, more and more online retailers are starting to accept payment apps including Apple Pay. Virtual credit cards are most suited for online use. Naturally, you do not read your credit card details out loud whenever you buy something at a physical store.
As with a physical credit card, a virtual credit card is very easy to use. It is also very simple and hassle-free when you use it to make online purchases. So, in this section, we will be talking about the step-by-step guide on how to create your virtual credit card account. Here’s what you should follow:
This is a very secure process, as it does not require you to enter credit card details such as the CVV number or expiration date. This is the very reason why people are now preferring the use of virtual credit cards when they shop online. The validity of this card is generally from 24 to 48 hours, though some banks offer a longer expiration date.
Another great benefit you can get from having a virtual credit card is that you have the flexibility to use the entire loaded amount or just a part of it. What’s great about this is that the leftover balance gets credited back into your bank account. Lastly, there is no applicable service charge whenever you use it.
While these virtual credit cards provide an additional layer of protection and security, there are several reasons why consumers don’t use them. For instance, it would be difficult to get a refund or return an item back to the retailer, especially if there is a need to confirm the credit card number at a later time.
It might also be difficult for you to book a rental car or a hotel room using a virtual credit card, as you need to show the physical credit card in person.
Even though they promise additional security and protection, there is also the risk of credit card fraud. For this reason, you should never let your guard down. With this, you need to make sure that your bank offers a robust fraud protection.
Searching for credit card companies that offer virtual credit cards as an option to make online payments might be difficult, as its use is not at all widespread. In this section, we will be tackling the major credit card companies, as well as the new players on the market. Make sure to take note of each credit card company, as it can help you decide where to sign up.
Bank of America is one of the two of the major credit card issuers right now, dealing in virtual credit cards. With Bank of America’s ShopSafe service, customers who also use the bank’s online banking service automatically get a generated virtual credit card number to be used to shop online. It should be noted that this service is available on both Visa and Mastercard.
What’s great about this service is that the customers have the freedom to choose how long they want the virtual credit card number to be valid, through the use of the “valid through date”. This date can be up to a year into the future. It is also noteworthy that these virtual credit card numbers can also be used for recurring or deferred monthly payments.
Citi is the second major virtual credit card issuer in America.
In the case of Citi, Virtual Account Numbers work differently from Bank of America’s virtual credit card. Citi only generates a virtual credit card number, which you can only use with a single merchant. However, this is also a good thing, as it cannot work if someone tried to steal the details and use it somewhere else.
You don’t have to worry about all these, as Citi credit card members can request for additional virtual credit card numbers, which you can use for other retailers. It should be noted, however, is that not all Citi cards generate virtual account numbers. You need to log into your Citi Online account to see if your credit card is eligible.
You might be wondering, do Visa and Mastercard offer their own virtual credit cards? Yes, they do. As two of the major credit card networks right now, they offer the Visa Checkout, as well as the Masterpass. Both services allow its customers to create an account through the Mastercard or Visa and then tie it to the existing credit or debit card.
As expected, both Visa and Mastercard offer quick and fast online shopping, in which you only need to click on the Masterpass or Visa Checkout buttons. It also would not require you to fill out your credit card details or your billing address every time you make an online purchase. With this, you will also get the fraud protection you need for your credit or debit card.
Final is a credit card company that recently got into the virtual credit card business. It can generate disposable and instant virtual credit card numbers, in which you can use them once and then it automatically shuts down. You also have the option to choose a temporary credit card that you can use multiple times but the catch is, it is only for one retailer.
Final can also provide you real-time receipts, which are sent directly to your smartphones, allowing easier monitoring of your purchases. What’s great about Final is that it has no annual fee and they offer 1% cash back on all your purchases. You can enjoy these benefits while feeling safe when you are shopping online.
One thing to take note of, however, is that Final only grants applicants with good to excellent credit backgrounds. In addition, it charges fees including a 2.5% for foreign transactions, as well as a 5% fee for printed copies of the documents that already have been provided to you. If this does not urge you to sign up, you might want to try Entropay (next option).
Technically, Entropay does not offer a temporary credit card – it can be best described more like a virtual prepaid card, which is designed to help its customers make private and secure online payments. How it works is that they offer the same privacy as with an instant virtual credit card, but without a credit check, interest payments, and the issued physical credit card.
As discussed, virtual credit cards only make it difficult for hackers and thieves to gain access to your credit card number. It is also a good thing that almost all credit card companies have other security practices and procedures in place. Therefore, you must not consider these additional security measures a hassle because they are totally worth it.
Companies like Discover provided new security improvements but included a $0 fraud liability guarantee, as well as the Freeze It service, which allows its customers to freeze their bank accounts temporarily using the Discover website or mobile app. The bottom line is that these virtual credit card companies try their best to help you get the fraud protection that you need.
While virtual credit cards offer an additional layer of security and fraud protection, using them does not give you the license to be careless, especially when shopping online. Online payments require your credit card information and it is in your best interest to be vigilant every time you shop online. Better yet, it would be wise to check if there is any fraud protection coverage offered by your card.
Another thing, you should be regularly checking your bank statements, credit card statements, and your credit reports. One last thing to take note of is that while the credit card is virtual, the bills certainly will not be. So, whenever you shop online, be prepared to pay them on time and in full amount to prevent unnecessary charges.