ever shopped from a new online website and felt tremors while entering your credit card details?
we’ve all been there. but the good news is that you don’t have to worry anymore. let's introduce you to virtual credit cards, how it works, benefits and disadvantages, and a list of banks which provide virtual credit cards.
a virtual credit card (VCC) is a unique credit card number which allows you to transact with the main credit card without exposing your credit card details. you can limit the use of virtual credit cards by manually setting a spending limit. at the same time, you can set an expiration date for your card.
most online retailers, from Amazon to eBay, store their customers’ payment information. it is convenient for everyone as it reduces the need for entering the details every time. but at the same time, hackers can gain easy access if the data is not securely encrypted, leaving you at the risk of identity theft and fraud.
virtual credit cards, unlike a normal credit card, use an app to generate a unique credit card number, better known as a token for every single transaction. the token is sent to the retailer and bank to confirm the transaction. once used for a transaction, these tokens can’t be re-used, therefore, minimizing the risk of potential theft or fraud.
one of the main benefits of a virtual credit card is the ability to close the VCC account without having to close the main credit card account, in case your personal information is compromised. while using a normal credit card, if there is a data breach, you’ll have to get the credit card reissued which might be an issue with recurring vendor payments.
even if you decide to close a virtual card, it mitigates the risk of your original credit card from being exposed. additionally, it saves you from the hassle of tracking down and updating recurring payments other than the one affected by the data breach.
returning items which you’ve ordered online can be one of the main challenges of a virtual credit card. you might be required to tap or swipe the card to authenticate the exchange request, which is not always possible with a virtual credit card. this may lead to you having to accept a gift card instead of getting the cashback for the transaction.
while shopping with a virtual credit card can be a little tricky as opposed to using a normal credit card, since it protects you from identity theft and fraud, the excess effort makes it all the more worth it.
here are a few ways that could make your VCC a lot more useful.
virtual credit cards are available in two ways: either by placing a request with a bank which provides this facility or linking a pre-existing credit card to an online service.
here is a list of virtual credit card solutions available in india:
HDFC Bank netsafe card
HDFC Bank provides a free virtual credit card solution called netsafe to its customers. this virtual payment service can be enabled for online shopping transactions made using your credit cards.
Axis Bank eshop virtual credit card
Axis Bank provides a free virtual credit card called eshop to its users. you can generate an eshop credit card after registering your credit card details with the axis bank official website.
make your Axis Bank credit card payment on CRED to earn exclusive rewards and cashback.
ICICI Bank virtual credit card
ICICI bank issues a virtual credit card as an add-on card on the cardholder’s primary card. the credit card limit on the ICICI virtual card is set by the user himself, depending on the limit on his primary card.
make your ICICI credit card payment on CRED to earn exclusive rewards and cashback.
SBI virtual credit card
SBI also provides a virtual credit card to its customers which can be generated from their official website.
make your SBI credit card payment on CRED to earn exclusive rewards and cashback.
Kotak netc@rd is not technically a virtual credit card, but it works in a similar way as a virtual credit card. you can generate a unique card number for domestic and international transactions.
make your Kotak credit card payment on CRED to earn exclusive rewards and cashback.
the future of virtual credit cards seems quite robust because of how well they lend themselves to an automated purchasing process. should your virtual credit card get compromised, you can always delete it, or lock with a simple click using your main credit card. virtual credit cards built-in security features makes them much safer to use in an expense process rather than using a normal credit card.
additionally, virtual credit cards protect you from fraud, can be closed down on request, and do not affect your recurring payments making them safe and easy to use.
so the next time you're thinking of a potential security threat to using credit cards, considering a virtual credit card could prove to be a viable solution.