One of the biggest benefits of online shopping is the  convenience it offers. You get access to all the brands and products all over the world. You are free to buy anything irrespective of where you are located. However, when you buy products online there is always a risk of your credit-card  information getting into the wrong hands. All shopping portals are not safe. When you provide your credit-card details to a shopping site, you are exposing yourself to online fraudsters. You can try to be as cautious as possible when shopping online, but unfortunately, fraudsters are still capable of extractinginformation from your transactions. To address this security concern, many card issuers have come out with a product known as a ‘virtual credit card’.

Virtual credit cards are short-lived cards that allow limited number of transactions and are not issued physically.

This is how it generally works: The banks provide you with a virtual credit card with a regular 16-digit number, an expiry date, and CVV1 or CVV2 numbers. You have the option of topping up these cards with as much money as you need to make a payment. Once the money is loaded into the card, you can use it as a normal credit card while paying for your online purchases. The biggest benefit of virtual credit cards is that they have very small credit limits, and can be used very few times. Thus, the card user can rest assured that it will not be misused by fraudsters. Since such a card does not exist physically, it is impossible to clone it.

Another important feature of these cards is that they are generally valid only for a few days. Also, most of these cards allow customers to make just one transaction. If the transaction size is less than the amount available on the card, the remaining amount is transferred back to the customer's account and the card ceases to exist.

One of the drawbacks of virtual credit cards is that they can only be used for paying online and not at Point-of-Sale purchases. Another drawback is that this card cannot be used in any place where the customer may have to show their card to make a payment. For example, there are times when you book an e-ticket, you might be asked to provide the credit card too, for verifying the purchase. In such cases, using virtual credit cards might create problems for you.

Banks are not the only issuers of virtual credit cards. There are many third-party websites that issue virtual credit cards to paying customers. However, since you have to provide your account or card details on such third-party websites, it makes sense to only purchase these cards from reputed third-party sellers. It is always better to choose your own bank for this card.


Disclaimer: Copyright Kotak Mahindra Bank Ltd.

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