Virtual credit cards are pretty flexible, so you can generally set a spending limit, an expiration date, and even a limit for specific merchants. All these features ensure your virtual card is safe and private, automatically preventing fraudulent activities.

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How do Virtual Credit Card Numbers Work?

The number of digital payments skyrocketed with the growing popularity of online shopping and electronic banking. The retail industry has been rapidly developing shopping sites and apps, while most banks decided to introduce mobile banking and digital payment options. As a result, there has been a growing need for virtual cards to make online transactions more secure and straightforward. That’s what virtual cards do today. Virtual cards work like any other, except they’re tailored to online payment formats. A virtual card works as a digital payment method, which means you can rest assured all your payments are secure and your personal and financial data is safe from any fraudulent activity.

Advantages of Virtual Credit Cards

Virtual cards are highly beneficial to people who tend to make many online payments1 because they have just the advantages these individuals look for in a card. Here are some of them.

Protection against fraud

The first and probably the most important advantage of virtual cards is fraud and identity protection. Namely, virtual cards protect your PII (Personally Identifiable Information) by revealing only the necessary information when placing online transactions. With PII protection, the allocated number is valid only once and quickly expires, so hackers can’t take advantage of your virtual cards.

Limits on spending

Virtual cards are more flexible when it comes to spending limits. They let you easily control your online spending because you can freeze your card whenever you want, set a spending limit, determine an expiration date, or close it immediately after a single transaction. All these features make it relatively simple to control and limit how much money you spend.

Management of subscriptions

You can easily track your online subscriptions with virtual cards. That’s because you can create a new virtual card for every subscription and thus individually control transactions with the vendors. At the same time, you can keep track of all your subscriptions from a single platform, streamlining the entire management.

Disadvantages of Virtual Cards

Even though virtual cards come with plenty of advantages, they have some disadvantages you should consider.

Long waiting times

Sometimes, the waiting time between the sale and the payment can be quite long on the merchant’s account, which you should consider before deciding to get a virtual card.

Payment of recurring fees

If you purchase a plane ticket and decide to upgrade your seat or add additional luggage, you’ll probably have issues completing these payments with a virtual card. That’s because your virtual card number can expire, and your airline company can require all payments relating to a single flight to be with the same card.

Frequently Asked Questions

Reference Index

  1. Everything you need to know about Virtual Credit Cards. Expensya