Every day we continue to face different challenges with our finances. Credit card information is being stolen and used in identity theft while you’re left dealing with financial damage. The good thing is there are several options to mitigate this problem and one of which is by using a virtual credit card.
A virtual credit card acts similar to your physical credit card but the only difference is that it uses a randomly generated number to complete the transaction. This way, no one can know or store your original credit card information while you’re still able to do online transactions.
If you’re interested to learn more about virtual credit cards in the market and how you can get one, check out the guide below.
What is a Virtual Credit Card and How Does It Work?
A virtual credit card is simply the digital version of your credit card. Without its physical card, you only have the primary account number that belongs under your name and you can use it to purchase items online or wherever physical credit cards are being used for different transactions.
You will need to download an app for you to generate and use your virtual credit card. What’s great about a virtual credit card is that it does not have the security limitations of a physical card.
It can generate a unique card number for every transaction that you make thus protecting your account from threat. A virtual credit card works by generating card numbers that are linked to your existing credit card account to be used for any transactions.
The generated numbers will appear as a normal credit card number which is why it is accepted in any establishments that accept physical credit card transactions.
What are the Uses of a Virtual Credit Card?
There are a lot of uses for a virtual credit card apart from making purchases. You can also use the virtual credit card to manage your subscriptions.
It can be a dedicated virtual card for all of your online streaming subscriptions and easily lock it without having to use your physical credit card.
The best part here is that you can use the virtual credit card in any establishment that accepts the physical credit card and still get to earn the same amount of rewards points.
The Benefits of a Virtual Credit Card
There are several reasons why a lot of users tend to go for the virtual credit card because of its many benefits. A virtual credit card has more security features than a physical credit card which means that your account is much more protected.
Even if a potential hacker gets hold of the data from such a transaction, they will still find it very difficult to obtain your account number since the number used during the transaction is not connected and has likely expired before even they can do more damage.
All of your transactions are immediately posted on the app thus you know that they are safe, valid, and complete. You don’t have to wait for the receipt or any form of confirmation as long as the transaction ID has been reflected on the app.
Limit Your Spending
Another benefit of using a virtual credit card is that it also limits how much you can spend.
If you want to focus on limiting your expenses on certain transactions such as online shopping at a certain online store or avoid unlocking more features on your monthly streaming subscriptions, your virtual credit card can help with that.
You can set up your account to limit the amount of money that the virtual credit card can transact with a certain merchant. Once you reach the limit, you won’t be able to make further transactions with such an establishment or merchant.
Factors to Consider Before Getting a Virtual Credit Card
Before you apply for a virtual credit card, certain things need to be considered first. Virtual credit cards are designed for specific transactions such as online subscriptions and payments.
They are most likely used in one-time payments or for online payments. These transactions do not require a physical credit card to complete so if you want to make your online payments more convenient, use the virtual credit card.
Virtual credit cards use a different credit card number for every transaction so it might be difficult to trace which number you’re using for such a transaction. They often expire after the transaction is done.
Difference Between a Virtual Credit Card from a Digital Wallet
While both a virtual credit card and a digital wallet might have a very similar function, there are also several noteworthy differences between the two. Digital wallets are just an extension of your current wallet or pool of money.
Apple Pay and Google Pay lets you load money into your digital wallet so you can use it to purchase items or do transactions online. Meanwhile, virtual credit cards have credit limits. Another difference between virtual credit cards and digital wallets is that virtual credit cards are widely accepted in many establishments that also accept physical credit cards.
Digital wallets, on the other hand, can only be used at retailers and establishments that offer them but in the future, this might not be the case anymore.
How to Get a Virtual Credit Card
Many major credit card companies offer this feature for free. You will only need to apply for the physical credit card and then request the virtual version of the card right after.
There are also some cases that you might have to apply for it using the bank’s mobile app. You will need to add your credit card number and many other details to generate the card.
It will then provide you with a virtual credit card that you can use for many transactions. You may also modify different settings like the spending limit or the expiration date.
Once done, you can start using the card for online purchases and many other transactions.
What to Do if You’re Having Trouble With Your Virtual Credit Card
There are some common issues about using a virtual credit card that you might want to know. Make sure that you activate the card by checking the activation date.
If you have insufficient funds, you should check the amount that you’re charging first and see if you still have enough credit limits. Always make sure that the CVC code and expiration date that you use are correct.
This is the most common issue that many virtual credit cardholders always face during transactions. If you experience any security lock, you might have made too many attempts at using the card to charge for your transaction. You can try again after 24 to 48 hours.
Conclusion
A virtual credit card is a safer and more reliable way for many online transactions. It generates a new credit card number that you can use to prevent any potential hacker or your retailer to store your credit card information. Go ahead and get yours today!