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How Does a Virtual Credit Card Work?

How Does a Virtual Credit Card Work

As online businesses are expanding people are also becoming more online-based day by day. Therefore, to make online transactions more convenient and safe marketers come up with new technologies. Among them, one of the best technologies is Virtual Credit Card that improves the account holder’s security while making any online purchase.   

Virtual credit cards can prevent sensitive details from falling into the criminal’s hands. In this way, they can ensure more protection and further peace of mind. They are similar to physical credit cards but cover you with protection when you need it most. Keep reading this guide to find out how does a virtual credit card works with an extra layer of protection.   

What Is a Virtual Credit Card?

A virtual credit card is a unique and temporary credit card number. This 16-digit credit card number is generated in a digital format and associated with your account. These cards are not issued physically by the credit card provider. When users want to perform online payment using credit cards then the original card issuer provides this to their customers. 

This disposable card number is designed to ensure the protection of the user’s actual account number from the wrong hands. Usually, it is a free service that includes one-time use time use only and if not used within a month it will expire automatically. In this way, this card ensures protection of the customers and prevents them from becoming a victim of online credit card fraud.    

How Does a Virtual Credit Card Work?

A virtual credit card can prevent your credit card information from being stolen through an unsecured connection or in a data breach. Here’s how does a virtual credit card actually works.

Disposable Card Number

As the name implies it’s not a physical card that you can carry in your hand. They are randomly generated credit card numbers that will change every time you use your credit card account for any purchase. To Get virtual credit card first, you should confirm that your credit card issuer provides a virtual credit card feature. 

If they do, you can request one through your bank’s online account. You can use this virtual credit card number to the online checkout, instead of your physical credit card number. After that, the transaction will appear on the account statement as if the transaction was made by the physical credit card. 

Ensure Protection from Fraudulent

When you purchase using the virtual credit card number the merchant will get a single-use number or token. So, if the merchant is a fraud and tries to clone it they can’t do it. Because a unique code is usable for a single purchase only. 

That is why hackers won’t be able to use this number to commit any fraud. Another thing, suppose the merchant’s website gets hacked even then your virtual credit card number is useless. So this card works as ensuring the best security when it comes to online shopping using credit cards.  

Protect Your Identity

If a hacker manages to collect the virtual credit card number of yours you can simply cancel it without requiring closing the entire account. Also, you can get a new one for further online purchase. As these cards are non-physical it is almost impossible to clone them and reveal your identity. 

Validity and Usage

Usually, users are required to use a minimum or maximum credit limit each day for each transaction. Each virtual credit card is designed for one-time use and credited for a single transaction online. 

This card will be valid for only 48 hours but the validity period and credit limit may vary from bank to bank. If any amount remains on the virtual credit card, this amount will be credited to the user’s original account back.

Cancelation Process 

When a user lost their physical credit card or they got stolen or compromised they have to cancel it. And until the new one is issued you have to wait and after that, you should enter a dispute process. Fortunately, with the virtual credit card, the cancellation process is absolutely simple and straightforward. Simply lock or delete them.   

Benefits of Using a Virtual Credit Card

Online security becomes a must for every user in today’s era. Hackers are developing new techniques to make their bad evil ideas successful. So, you also look out for every possible precaution to keep yourself safe and protected. Here, we will share the benefits that you can get from the virtual credit card. 

  • These cards come with an extra layer of protection and security against hackers or criminals. 
  • It prevents criminals from attempting to steal information by providing a secure connection. 
  • This temporary account detail is only valid for one purchase thus, this card is rendered useless for the merchant and hackers. 
  • Some credit card issuers allow setting a credit limit and separate expiration dates from their physical credit card. 
  • While canceling the card a virtual; credit card makes the process much easier and simple. Simply lock or delete the virtual credit card number when they become compromised. 

Note that, virtual credit cards can’t ensure protection against all types of scams and misuses. But if any company has a data breach that you have done business with won’t get their hand on your real credit card numbers.

Final Thoughts

While purchasing from a big and well-known online merchant like Amazon you can confidently share the financial information. But with the new merchant who has a small online presence, certain risks remain with that purchase. In that case, you can use the virtual credit card number to ensure safe shopping even if the merchant is unknown and new.   

You can easily obtain a virtual credit card number without much hassle. Also when credit card issuers offer virtual credit cards these come with $0 fraud liability policies. Now that you know how does a virtual credit card works you can give it a try. It will surely make your financial information a little more secure while online purchasing.

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