Is a Virtual Credit Card Useful?

vccWhat is a Virtual Credit Card?

Online shopping and transactions are becoming exceedingly common due to their convenience and global accessibility, but they do come with a host of issues. One problem is the danger of personal information theft when people give out their credit card information online. Other problems arise when merchant websites refuse debit cards or wire transfers. Then there is the issue of currency where merchant websites only accept a specific currency like US dollars. The use of a virtual credit card can eliminate all these issues and make online transactions easier and safer.

Virtual credit cards have been in existence for about ten years, but have not really become popular despite the fact that they are free of cost and add an extra layer of security to online shopping. A virtual credit card (VCC) is a duplicate of an actual credit card that the card holder can generate online anytime they desire. It works just like a regular credit card except that it is created online. It will come with the same information that a real credit card carries like name of the card owner, a credit card number, CVV code, date of expiry and support of the bank backing the real credit card (Visa, Mastercard, etc.). In addition to functioning like a real credit card for online shopping, it keeps personal information safe.

Benefits of the VCC

The good thing about the VCC is that it has a very short validity. It is usually valid only for one successful transaction after which it expires automatically. If someone steals your information and tries to make a second transaction on a VCC, it will not be possible. A second benefit of the card is that it allows the owner to set their own amount/currency limit. For instance, if an item costs $100 and this equals to 500 units in country X, then the user can set the limit at 500 units when they are buying something for $100. Due to this built in security mechanism, the merchant website will not be able to take more money form the user’s bank account. Either the merchant website will have to charge the said amount or refuse the transaction. Also, almost all payment gateways acknowledge a virtual credit card just like a real card and because of this all online shoppers can use a VCC even if they don’t have a real credit card. As long as they have sufficient funds in the bank to cover the transaction, they’re fine.

How to Get a VCC

The way to go about getting a VCC is totally determined by the services your bank provides. Some banks provide the VCC facility, while others don’t. So the first step to getting the card is to find a bank that provides this facility in your locality and open an account there.

There are some points to keep in mind once a bank has been chosen. Different banks have different features for their VCC cards. Some banks / gateways may charge additional fees for conversion of currency or implement a service charge. If a limit is set that is less than the gateway payment amount, then the extra amount may be deducted from your bank account or the payment may be rejected at some stage. Some payment gateways, like PayPal, can recognize a VCC from its number and can reject it. It is better to check with the merchant website to make sure that they will accept a VCC.

Creating a VCC Online

Once an account has been opened with a bank offering the VCC facility, it will be time to download their software. Just enter your credit card information and produce a new number whenever you need to make an online transaction. The new number will only have a small spending limit and expire as soon as the transaction if carried out. It is possible to use the VCC multiple times provided it is with the same merchant.
The actual account number cannot be seen by the merchant, nor can the information be retained on their database. The real account number is only visible to the bank or the cardholder. If hackers or scammers try to use your information they will not be able to so, as they will only have access to the temporary card number and not the real card number.

Are VCCs Useful?

Virtual credit cards are a useful tool that allows one to shop online in relative security. However, the fact of the matter is that nothing is one hundred percent safe and the possibility of hacking always exists. The chances of a VCC being hacked are much lower than that of a real card. The major issue with these cards is that they require extra effort to sign up for initially. While many banks offer the VCC service for free, some do not and having to make a payment is another deterrent. However, if you make that one time effort it can be very useful.

VCCs are very good when there are free offers which require a credit card number or come with recurring payments which you are not sure if you want to continue. When there is a danger of being billed at a later date for something you really don’t want, a VCC with one time use comes in very handy. It is like having a disposable credit card that is good for a single use only.

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