A virtual credit card, also known as a disposable or temporary credit card, is a disposable payment card used for one-time purchases on the Internet. Consists of a single-use credit card number generated by the credit card issuer. In most cases, virtual credit card numbers can only be used once and expire after about a month if not used; This setting helps protect the user from online credit card fraud. Virtual credit cards can usually be obtained from the consumer’s current credit card issuer.
A consumer can use a virtual credit card in the same way as a regular credit card, with several notable exceptions. You can set the credit limit on each temporary credit card according to the amount you want to make available. The virtual card is linked to the user’s physical credit card number, but only the user knows the physical credit card information. This helps protect the user from possible theft of their real credit card number and subsequent fraudulent use of the same.
Virtual credit cards have several advantages. Chief among them is the protection they offer cardholders against online credit card fraud, preventing the card number from being stolen and used to generate high charges. Virtual cards usually have a low credit limit, set by the owner for one-time use. They also help protect the user from identity theft, as the card cannot be used to prove the thief’s false identity. Virtual cards do not contain any personal information of the owner, and only carry the temporary number provided by the company.
Another benefit of a virtual credit card is its convenience. These cards allow the user to make purchases online without having to first look up the physical credit card information. All the user needs to remember is the virtual card number.
Temporary credit cards can also protect cardholders from another type of scam that is growing on the Internet. Some unscrupulous companies offer “free” apps that require the user to enter their credit card number, among other information. The unsuspecting user finds that their credit card has been charged by the app after a period of time. Using a virtual credit card with an extremely low credit limit prevents the user from being significantly affected by these scams.
However, virtual credit cards have some disadvantages. They are generally limited to internet use and cannot be used for offline transactions. Also, its use online is restricted to certain types of purchases, as some merchants require real credit cards and personal information.
The short expiration time of virtual cards, while providing security for the user, can also be a disadvantage. Not using the card before the expiration date means having to buy a new one. The credit card user may specifically request a different duration for their virtual credit card, as well as the ability to reuse a virtual card number for a specific merchant for convenience. However, this can increase the risks associated with using credit cards online. The processing time for virtual credit cards also tends to be longer than for physical credit cards.