Virtual credit cards are disposable versions of regular cards. They make your information more secure, but basically they can only be used for online shopping. Here’s all you need to know about virtual credit cards and how do they work.
The main perk of a Virtual Credit Card or VCC is that they protect your information. How? Because of the way they use it and share it.
It’s common for online retailers to store your credit card information for future use, and this is really convenient. But what if they are hacked? Then, hackers would have access to your credit card information as well. With a VCC, the card number can usually only be charged once, so even if hackers gain access to it, it’s useless. This technology works like the chip on most modern credit cards, which create a unique token for every purchase.
Virtual cards work with similar premises as payment apps, but they are not the same, mainly because they work in different environments. When you charge a card through a mobile payment app, the retailer validates the information with a limited-use token and not with the actual credit card number, just like a VCC would do.
But mobile payment apps are used at the retailer facilities, while VCCs are almost exclusively used online. However, more and more online stores are beginning to accept payment apps, such as Apple Pay or Android Pay.
You can get a VCC at many big banks, and most actually offer them as a free amenity. You can check with your bank to see if they offer this service. If not, there are third-party services that work with your current credit cards. A popular service is Entropay, which allows you to create virtual disposable cards for free. Another option is Final.
Another perk of VCC is that you can customize certain features that you can’t change on a regular credit card, for example the “valid thru” dates, spending caps, and automate bill pay. Virtual Credit Cards are intended to make your information more secure, so if you usually shop online a lot, then they are a perfect option for you.