Do you frequently shop online or make purchases over the phone with your credit card? Even if you only use secured sites and take other precautions, there’s a significant chance a cyber thief could compromise or steal your account information. The good news is you can get a virtual credit card to minimize the chances of being victimized. In addition, it provides an added layer of protection against fraudsters so you can shop confidently.
What is a Free Virtual Credit Card?
As the name suggests, a free virtual credit card is a non-tangible item. It’s designed to be used when shopping online or over the phone and generates a unique credit card number connected to a payment account each time you make a purchase.
These cards are available right away since you don’t have to wait for a physical card to arrive. Some companies offer virtual credit cards and also ship a physical card to your address. You can use the virtual credit card while waiting for your physical copy to arrive. Even after you receive the physical copy, you can opt to use your virtual credit card instead. Some fintech companies and financial institutions only provide a virtual card instead of a physical one.
Do Virtual Cards Work The Same Way as Normal Credit Cards?
Virtual credit cards operate like traditional credit cards at the point of sale. Simply input the unique sixteen-digit card number, expiration date and card certification value (CVV) found on the card to authorize and complete the transaction.
Is It Safe to Use a Free Virtual Credit Card?
While virtual credit cards aren’t a surefire way to prevent fraud, they offer safety features that you won’t get with a traditional credit card. For starters, if you suspect fraud, the account number you receive to make purchases can be disabled or canceled immediately without impacting the payment account. Plus, the payment account information is not accessible and will never be revealed to the fraudster.
The Benefits of a Virtual Credit Card
Wondering if a virtual credit card makes sense for your finances? Below is a breakdown of the many advantages of adding a virtual credit card to your wallet.
Ease and Convenience
Virtual credit cards link seamlessly with your selected payment method and are a convenient and secure way to make purchases. You won’t need to bring your wallet with you if a store enables virtual credit card transactions. Credit card issuers like Mastercard, American Express and Visa offer virtual credit cards.
Instant Approval
You’ll typically receive a decision within minutes of applying and can begin using the card right away. You won’t have to wait for it to arrive at your house or visit the local bank to receive your card.
Safe and Secure Use
Virtual credit cards provide an added layer of security by concealing your account information and providing you with a unique card number instead. Contactless payments with virtual cards also eliminate the risk of misplacing a physical credit card.
Easy Access to Funds
With a virtual credit card, you can easily access your funds—there’s no need to make an ATM withdrawal or visit a physical branch.
Control and Visibility
Depending on the virtual credit card issuer, you may be able to set spending limits to keep your finances in check. Companies can also set these limits on workers when they give out corporate virtual credit cards.
Check Your Transactions Anytime From Anywhere
Most virtual credit card issuers offer an online dashboard and mobile app that allows you to monitor account activity 24/7 from your computer, mobile phone or another electronic device.
Drawbacks in Using a Virtual Credit Card
Unfortunately, there are also drawbacks to using a virtual credit card, which should also be considered before deciding if you want to apply. These are some of the details to consider when browsing through virtual credit cards.
Limited Availability
Unlike traditional credit cards, virtual credit cards aren’t readily available through most banks and credit unions. You will have to search around to find virtual credit card providers and compare rates and terms. Fewer viable options can result in less favorable terms.
Not for Use Everywhere
You’re only allowed to use virtual credit cards for transactions completed online or by phone. Furthermore, they’re not an acceptable form of payment if you want to make an online purchase that requires you to present a physical card. This includes rental car reservations, lodging and airfare. A virtual credit card does not eliminate the need for a physical card.
Not Ideal for Recurring Payments
Since the card number may change after each use, it may be challenging to set up recurring payments using this payment method. A physical card may make more sense for online purchases that involve subscriptions.
How to Get a Free Virtual Credit Card
A free virtual credit card is more accessible than a physical card and can improve your credit score. You can follow these steps to get a virtual debit card. Luckily, these are the same steps for getting a virtual debit card as well.
Selection of Provider
Consumers can choose from numerous financial institutions and fintech companies that offer free virtual cards. It is a good idea to compare cards based on their rates, terms, fees, and other factors. You should compare multiple options instead of going with the first company that you can find. Consumers can also search for lists that contain the best virtual credit cards to get an idea of what offers are available.
Registration and Verification
You will have to create an account with a fintech company or a bank to open a virtual debit card. The provider will request your ID and other information to verify your identity before giving you access to its services and financial products.
Activation of Virtual Credit Card
It’s straightforward to activate a virtual card, and service providers will walk you through this process. Once you activate your card, you can use it to buy goods and services. It’s also easy to change your 16-digit card number in case someone accesses your information. You can add the card to your Google Pay and Apple Pay wallets for easier accessibility.
How to Use a Free Virtual Credit Card Safely
You can use a virtual credit card to make online shopping and other purchases. It’s important to keep your card as safe as possible. These tips can help.
Safeguarding Personal Information
Make it difficult for people to access your virtual card numbers and change them if someone discovers your number. You should also periodically change your password and use multi-step authentication. These protocols can keep your bank account and virtual card safe from hackers. You shouldn’t use the same password for everything since your most common password is probably in the dark web through a data leak.
Tracking and Monitoring Expenses
Reviewing your credit card statements can help you detect suspicious online payments before they accumulate. Most credit card providers also offer liability protection from unauthorized purchases. Letting these transactions linger without doing anything can lead to more of them. You may also be legally responsible to cover the expense if you do not notify the provider in time.
Using VPNs for Additional Security
VPNs are virtual private networks that offer an extra layer of protection for your online security. You can use this network to stay safe from the risks of using a public network. Public Wi-Fi networks are more susceptible to hackers, while VPNs minimize your risk. VPNs are useful for protecting any digital asset or account, not just virtual credit card numbers.
The Future of Virtual Credit Cards
Virtual credit cards are more convenient than their physical counterparts. You can receive your virtual card upon completing the application process and getting approved. These cards are also more convenient since you only need your smartphone instead of your wallet.
Google Pay and Apple Pay have made people comfortable with adding their credit cards and debit cards to their smartphones. Virtual credit cards seem like the next step for people who want to access more money but don’t want to wait for a physical card to arrive in the mailbox. You also run the risk of losing a physical copy of your credit card by leaving it in a public place. Virtual credit cardholders do not have that same risk.
Businesses can also benefit from virtual credit cards. Companies can issue virtual cards to their employees and modify settings within mobile apps. Employers can immediately adjust credit limits or deactivate some cards to prevent misuse. It’s also possible for a business owner to set rules for each virtual credit card.
These cards offer a lot of potential, and many financial firms are adopting them. Virtual credit cards may be safer than physical cards as well.
Frequently Asked Questions About Virtual Credit Cards
Costs and fees vary for each financial institution. Companies are often upfront about their costs. It is possible to get a free virtual credit card without any hidden costs or fees.
You cannot withdraw money from a virtual credit card. You need a physical card to withdraw funds from an ATM. Virtual credit cards are optimal for online purchases.
