Over the turn of the century and subsequent decades, today’s world has become increasingly dependent on credit cards. Over the past year 2018-19, credit card usage has gone up by 30%. Users have spent Rs. 6 Lakh Crore using their credit cards in comparison to the Rs. 4.6 Lakh Crore last year 2017-18. India, though primarily a debit card-based market, has shown phenomenal growth in usage of credit cards. Yet, perhaps, the sheer increase of virtual credit cards are perhaps where the future actually lies at.
The use of credit card has risen owing to its several conveniences. With lucrative features ranging from discounts and offers to redemption points, it’s most convenient characteristic is the ability to make purchases and transactions even without having the required funds available in-hand.
What is a virtual credit card?
While use of credit card has risen, the parallel rise of internet banking has led to an amalgamation of sorts in virtual credit card. Like any credit card, these too have a specific card number along with CVV and validity dates, the only difference between a conventional and a virtual being the lack of a physical card in case of the latter.
Typically, virtual ones have a specific time limit for its use. This ranges between 48 hours to even a month. Often financial institutions issue a virtual card which can be functional until cancelled by the user.
These cards are usually linked with the primary physical card and act as an interim one. Virtual credit cards generally have similar features like a credit card, its specific features being core to its working. The underneath encapsulates this amalgamation of advantages and its functioning.
- Security: The most common characteristics, lack of any physical card prevents any question of it being stolen. Any user of such banking features is well aware of the need to protect their credit cards from being hacked. Some financial institutions permit timely creation of a virtual credit card.
It simply means that these are cards for a short period, mostly being 48 hours. The activation is followed by OTP, and its usage requires OTPs too. Since these are generated at a specific time for usage over a short duration, the credentials have low chance of being misused by anyone other than the client itself.
Many financial institutions like Bajaj Finserv and its likes have begun issuing such virtual cards, thereby ensuring convenience for the users.
The NBFC also provides pre-approved offers on numerous financial products like credit cards, home loans, business loans, personal loans, etc. These offers make the application procedure simpler for easier and quicker processing. Check your pre-approved offer by providing the name and phone number.
- Fixed limits: A financial cap on the limit of usage of this card ensures a virtual credit card is secure. While this is an essential check on any spendthrift nature, in any event of misplaced credentials, this is a great security measure. The virtual card has online modes to easily pay your credit card bill, even with access to details an unauthorized person cannot go on a spending spree.
Important to note, credit card companies usually allow users to choose their financial cap. While this does not ensure an unlimited range to choose from, it does ensure a client the choice to decide on a limit based on their expected expenditure.
- Costs: One of the most notable of features, a creditcard usually comes with several costs when they are issued. In case of any virtual card, this cost is absent. Ranging over different features and schemes, these cards can be linked to primary credit cards or even as a prepaid card based on the debit card. In either case, a virtual credit card comes free of cost owing to the lack of any physical card.
Other than popular regular credit cards such as the Bajaj Finserv RBL Bank SuperCard, the concept of virtual cards are also gaining wide acceptance. The convenience along with the secure usage is encouraging users to opt for it with success.