Virtual Credit Cards: Four things you MUST know!

Here's a crash course on what you need to understand about VCCs.

Virtual Credit Card is a disposable payment solution for online payments. It is a credit bubble carved out of your credit card, debit card or bank account for a limited amount and a limited time.

Virtual credit cards have an expiry period which is mentioned clearly. Most of the cards expire within 24 or 48 hours of issue even if unused. Some card like ICICI Bank allows a longer expiry period. The unused amount on your VCC is immediately credited back to your account within a maximum of 24 hours.

The credit limit of the virtual credit card can be set and the maximum credit available to you is within the overall limit of your primary card. In case of SBI, the credit limit is between Rs100 and Rs50,000/-. The virtual credit card facility is available to the primary card holder only not to any secondary card holders.

4 things you must know about Virtual Credit Cards

They do not exist - not really!

Yes the card is purely virtual card and does not have any physical existence. All its details like issue date, expiry day, card number and CVV are generated online and you can use it for any online payment transactions but you will not have the satisfaction of holding the plastic card.

They are super safe

Since the card does not physically exist, it cannot be cloned. With the quickly expiry dates as well as the amount limits, you control the card. For instance, if you wish to take make a purchase of Rs 10,000, you can transfer the exact amount into your account and there is no chance of it being misappropriated.

You can have a virtual credit card without having a real one

Even if you are not a credit card holder, you can still have a virtual credit card. The amount you need for your virtual credit card will be linked to your debit card or bank account. Any unused or refunded amount will return to the underlying account.

Remember it is not going to be available to you for physical verification

Virtual card numbers can't be used when you need to show a physical card as proof, such as at the airport while checking in with an e-ticket or to pick up tickets at a theater. So while it is a perfect card for online shopping, it does not make sense to use it where you will need to show your physical credit card for verification. Especially avoid for any foreign travel related transactions including hotel and air ticket bookings. You would not like to be caught on the wrong foot in a strange country.

Illustration: Uttam Ghosh

The author is a credit expert with 10 years of experience in personal finance and consumer banking industry and another 7 years in credit bureau sector. Rajiv was instrumental in setting up India's first credit bureau, Credit Information Bureau (India) Limited (CIBIL). He has also worked with Citibank, Canara Bank, HDFC Bank, IDBI Bank and Experian in various capacities.