Virtual Credit Cards- Analysis

As everything has both sides, positive and negative, Virtual credit card too have both sides.

Here are some pros of virtual credit cards:

-> Protection: They provide protection to card holders from online credit card fraud, prevent card number from being stolen and used to run up high charges. They also protect user from identity theft, because card cannot be used to provide proof of the thief’s false identity. The virtual credit cards do not carry any of the owner’s personal information and only carry the temporary number provided by the company.

-> Convenience: These cards allow the user to make online purchases without having to search for his physical credit card information first. User has to remember the virtual credit card number only.

-> Protects from Scam Proliferating: : Some unscrupulous companies offer free applications that require the user to input his credit card number along with other information. The unsuspecting user then finds that his credit card has been charged for the application after a period of time has passed. The use of virtual credit card with an extremely low credit limit keeps the user from being noticeably affected by these scams.

-> Limited to One Vendor: If you stored your physical credit card number at a site that got hacked, then the card could get bogus charges from another vendor. With virtual account numbers the charges are supposed to be restricted to one vendor.

-> Flexibility: It enables Bank customers to pay from any of their Internet Banking enabled accounts, having transactions rights. Card can be created for any amount, but that limit depends from one bank to another. Card can be used at any online merchant site that accepts Visa Cards.

Here are the some cons of virtual credit cards:

-> Limited Availability: Very few banks offer virtual credit card facility. Some banks offering virtual credit cards are SBI, ICICI bank, etc.

-> Chances of Fraud: If you don’t set an appropriate time limit and payment limit, the vendor might put fraudulent charges anyway. And if that happens, the company will probably cancel your card and you’ll need to get a new account number.

-> Not always ideal for Recurring Payments: You don’t want to put your internet bill on a virtual account number that is going to expire before your card. You might forget to generate a new number and keep track of everything.

-> Not For Use Everywhere: You should not use virtual credit cards when you need to physically pick up an item because the virtual account number will not match the number on your card. This is important when you are picking up movies, renting a car, etc. This could also be a hassle if you need to return a product, you bought on the virtual number which might have expired.

-> Longer Processing Time: The processing time for virtual credit cards tends to be longer than that of physical credit cards.

So, while using virtual credit card, you should consider all it pros and cons.

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