A Virtual Credit Card is an electronic credit card. Though the 16 digit card number is an actual card number through which your account can be traced and money can be debited from your bank account through it, you cannot hold it in your hand. There is no physical form and feel to the virtual card, but it is virtual. That is just electronically real.
A Virtual Credit Card is mostly a one-time use card. Once the card number is used electronically to make a payment, it cannot be used again. For a second time usage the virtual card number needs to be generated again and again. This makes the card payment secure in the sense if the website where the payment is made is not a secured one, then using a virtual card is the best solution.
Since it is a one-time use card number, no one can get access to the root ac access count once the payment is made. This gives a higher sense of data security and peace of mind.
A Virtual Credit Card is helpful in managing expenses the following way: –
1. Peace of mind – if you have to share your card number with a friend to purchase a discounted product that only they have to, there is no need to provide your real card number or the security code. Hence peace of mind is ensured when you know the card number cannot be misused.
2. If you get good deals on other websites that are of international origin and if it is a first to purchase, it is better to be safe than sorry. Therefore, on such purchases too use a virtual card
3. If there are multiple expenses of a recurring nature, you can create a virtual card for each of those expenses with a limit attached to that card. To explain this use with an example, let’s say a person has three children. A virtual card could be gifted to each of them with a set cash limit in it. Do say for Diwali each child can surf through online shopping sites, choose their clothes and make the purchase and also decide what purchase they need to prioritize so that all the expenses are within the card limit.
4. Freedom to choose without spilling over the monthly budget balance. As you have seen in the example above, assigning set cash to a card gives the owner the freedom to choose how best to use the money and by keeping a cash lock, the expenditure cannot exceed that limit thus the budget is not imbalanced.
5. Similarly, the concept can be used for a shopkeeper or a company, where different departments such as logistics or marketing can be given their own virtual cards with a set limit for spending so there is no time lag or dependency for approvals and yet the expenses will be kept in control because the card will have a set limit that they will need to adhere to until the next month when the card gets refilled.
