You can think of a VCC as an interim credit card number linked with your permanent one
While making an online transaction via credit cards, your details are shared with the merchant site and there are chances that the information may be misused. Though there are security measures in place, there have been instances of credit card fraud.
Here is where virtual credit cards come in. With all the features similar to a credit card, these cards do not have a physical form and comes with a specified limit of your choice which is usually small. Also, the bank will decide the credit limit depending on your eligibility.
All these features make a virtual credit card very safe to use, and is mostly offered free of cost and have no joining fee or annual fee. However, if your virtual credit card is linked with an existing savings account, you would first need to load the card before using it.
Today, customers of almost all major banks can access virtual cards via net banking, or they can visit the nearest bank branch. They are either available to holders of primary credit cards or to people who have accounts with the banks.
For example, if you want to purchase a product online that is worth Rs 9,600, you can load your virtual credit card for Rs 10,000 and make the purchase. The remaining money will reflect back into your account after the specified time period. If you have physical credit card linked with your virtual credit card, then the transactions made on the virtual card will be visible in your primary credit card statement.
“A virtual credit card (VCC) is primarily an add-on credit card that is tailor-made for primary cardholders for online use. The VCC has all the relevant details of a regular credit card including card number, expiry date, and CVV number. However, a VCC does not exist physically, and a unique number is generated in every transaction. The VCC can be used just once and usually expires in 48 hours. Upon expiry, the money reflects back on the physical card,” said Navin Chandani, Chief Business Officer, BankBazaar.
You can think of a VCC as an interim credit card number linked with your permanent one and then use it for making online purchases. “Since this is a temporary number that you generate via internet banking, it cannot be traced back to the original credit card or to the customer id. Moreover, since virtual credit cards are non-physical, it is almost impossible to clone them, which makes it extremely safe for all online transactions,” he further added.
Many banks also offer instant credit cards, which are virtual credit cards that are issued in a matter of minutes so that a customer can start making purchases before the physical credit card arrives. These are offered only to pre-approved customers.
However, remember that virtual credit cards come with a few limitations. They can be used only for online transactions and not at offline merchant establishments.