What is a virtual credit card, and should you apply for one?

Virtual credit cards are digital cards that are available online and don’t have a physical form. Customers can use them to carry out online transactions. It’s similar to your conventional credit or debit cards with a card number, CVV, and validity dates. However, all these details are only available online. Here are some pros and cons of owning a virtual credit card.

Virtual Credit Card

Most major credit card issuers offer virtual credit cards (VCC) to ease customer transactions and improve security. While it serves as a virtual extension for a physical credit card, customers can only use it for online transactions.

Features and advantages of VCC

• Offers improved security
  Virtual credit cards come with a one-time usage option. The card number generated is valid for a specific period ranging from 24 hours to 48 hours. As the card is available only online, thus minimising the chances of misuse or theft.
  In some cases, a cardholder can cancel the card if they do not require it.
  
• It comes with a transactional limit
  Similar to physical credit cards, VCCs also come with a set credit limit. Users can transact multiple times within this limit. Its credit limit is identical to that of the primary card.
  
• Immediate availability
  As card issuers provide VCCs online, customers can access them immediately for required transactions.
  
• Instant online application and blocking facility
  Cardholders can apply online and block their VCC instantly online in case of any suspected fraudulent activities.
  
• CVV remains the same throughout
  The CVV number of a virtual credit remains the same if the card is active irrespective of the number of transactions a customer makes. It only changes when a customer cancels it and avails a new card instead.
  
• Issued to primary customer
  A VCC is issued only to the primary cardholder and not to an add-on holder of the primary card.

How to use a virtual credit card

A VCC is available for online transactions only and does not extend to physical swipes. Users need to follow the below-mentioned steps to complete a transaction when using it to make purchases or payments.

1. Input the card number
2. Enter the validity required
3. Verify with OTP sent to the registered mobile number
4. Complete transaction

Should you apply for a VCC?

Given its features and benefits, a VCC ensures additional security against a physical credit card. Other benefits include the following.

• The unused credit limit is transferred on expiry
  If the VCC expires, the remaining credit limit is transferred to the primary card.
• Available at zero cost/ fees
  Currently, financial institutions provide these cards free of cost. You aren’t required to pay any fees or charges while availing of it.
• National and international transactions possible
  The utility of VCCs extends to both national and international transactions, thus enabling cardholders to make online purchases conveniently.

Users must, however, confirm their decision for VCC applications after considering the following pointers.

• The existence of a primary credit card is essential to issue a VCC. Individuals must, therefore, obtain a physical card to be able to avail and use it.
• VCC’s utility at physical stores is limited, which means customers cannot use the card to make any purchases at shopping malls or outlets.
• Also, since a VCC’s usage is limited to online transactions, users cannot make cash withdrawals through it.

We’d recommend weighing the pros and cons of a VCC before applying for one. If its limitations outweigh its benefits, users can go for options like Bajaj Finserv RBL Bank SuperCard that come with robust security features like zero-fraud liability and in-hand security.

Other attractive features of the card include attractive annual savings, interest-free cash withdrawals for up to 50 days, repayment in easy EMIs, and a personal loan against the unused credit limit.