Virtual credit cards take many different definitions in India today. The definitions might vary from a digital wallet to a credit card add-on. In this article, we will discuss what a virtual credit card is in India, how they work, and the advantage (or) disadvantages of getting one.
What is a Virtual Credit Card?
A Virtual Credit card is an add-on credit card that one can choose along with their primary credit card from their credit card issuer. This credit card is called ‘virtual’ because there is no plastic card and the card is only accessible digitally. Every time the card is used, the card will have a different Card number, Expiry date, and CVV. This feature makes the credit card extremely safe to use for digital payments. Some banks might also provide some rewards points for purchases made from the virtual credit card.
An alternative definition that is commonly used is that of a pre-paid mobile wallet that provides a virtual card to make online transactions with. By definition, the pre-paid mobile wallets cannot be credit cards.
Which banks offers Virtual Credit Cards in India?
Some of the banks that offer a Virtual Credit Card in India are:
- ICICI Bank Virtual Credit Card: ICICI issues an add-on credit card immediately after request that one can use instantly. The card is issued without a fee and is a VISA card that can be used internationally.
- HDFC Bank Virtual Credit Card: HDFC offers NetSafe as an option to create a Visa/Mastercard Debit/Credit card which enables you to generate a virtual credit card number.
- ALTERNATIVE (Mobile Wallets): An alternative although not true ‘credit cards’ are mobile wallets that issue digital prepaid cards to go along with mobile wallets. Some examples include 811 Kotak Mobile Wallet and HDFC PayZapp.
Advantages of a Virtual Credit Card
There are very many advantages to a virtual credit card compared to a regular card. Some of them are:
- Security: The unique virtual credit card number details that are generated every single time offer security. One need not worry about losing their card.
- Immediate use: One does not need to wait for a physical card to ship to their house to start using a virtual credit card. Once your card is approved, you can create a virtual credit card number to use online immediately.
- International usage: Many virtual credit cards have international acceptance which is a great benefit.
Disadvantages of a Virtual Credit Card
While there are benefits like added security and ease of use with virtual credit cards, there are some areas where virtual credit card users have faced problems:
- Shopping refunds: When one shops online and wants to process a return, returns are almost processed back to old credit card number. This may create some confusion for people who shop online frequently.
- Hotel & Event Checks: Many events, flight, and hotel booking check-ins require one to present their credit card at the point of entry. Similar to shopping refunds, this might create some issues.
Bottom line: Is it worth it?
Virtual credit cards have been a great relief for many as it provides an additional layer of security many wanted. However, as noted above, there are some issues to consider in regards to potential issues with getting refunds and security checks. However, as long as one plans around small issues like these, it offers excellent security and an immediate option for credit before your physical credit card ships to your house. One can continue to check their credit score and credit card bills regularly to make sure that no fraudulent activity is taking place.
Please note that the credit card may be virtual but the card bill payments are not. Make sure you manage your credit card purchases and payments diligently.