What is a Virtual Credit Card?

Credit fraud is one of the leading causes of fraud worldwide, affecting many people, including major companies and corporations. Usually, credit fraud happens when online hackers track your online transactions and obtain your credit card information. Thus, hackers can use your credit card to make fraudulent purchases, leaving you with credit card debt.

However, the introduction of virtual credit cards has helped curb any fraudulent activity by hackers through fraud protection.

The virtual format of your physical credit card has had many benefits to cardholders within the digital space. Credit card companies have made online transactions, including online shopping, much safer and more convenient for all. The virtual credit numbers will be used in place of your actual credit card number when making purchases online.

Therefore, you will not have any transaction traced back to your credit card number and bank information.

Key Takeaways

·         A virtual credit card is the digital version of your physical credit card used for making purchases online

·         A virtual credit card number is a set of unique numbers generated by your credit card issuer, used instead of your actual credit card number

·         Virtual terminals for processing credit cards are secure websites that use software to make it easier to accept credit and debit card payments

What is a Virtual Credit Card?

virtual credit card

A virtual card is the digital format of your physical card linked to your existing bank account, whether a credit or debit cards. A virtual card offers fast, convenient, and safe methods of making online purchases by masking your actual account information. Therefore, you will be protected against hackers or unauthorized people using your card information for fraud.

Thus, you will avoid unauthorized charges on your credit card or other forms of fraud, including identity theft.

Virtual credit cards have a unique 16-digit number, different from your physical credit card number. Virtual credit cards have the same features as those found on physical cards, such as the expiration date and security code. However, all virtual credit card information is unique and not similar to any information found on your actual account number.

The credit card company will generate a new virtual card for every online transaction, making it untraceable to your existing account.

Virtual credit cards have a shorter life span, meaning you can only use them within a certain period. After that, the virtual card numbers will become void, and the cardholder cannot transact with the expired virtual card. Thus, the cardholder should check for the expiration date on the virtual card number and use the virtual card before expiry.

Usually, virtual credit cards are free, and cardholders do not require to pay for them, especially from major credit card companies.

In most cases, your virtual account number is connected to your actual account information and works similarly to your physical card. Therefore, you will receive the same benefits and rewards system in the same way as you use your physical credit card. Additionally, your credit card issuer can allow you to set spending limits or expiration dates for each virtual card.

Any charges applied to your physical card will also apply as you shop online with your virtual card.

How Does Virtual Credit Cards Work?

virtual credit cards

Virtual credit cards are a digital version of your physical card, which your credit card issuer will offer upon request. Once you open your credit card or checking account, you can request a virtual account number. Your credit card issuer will generate your virtual account number through software programs available to your card issuer.

Then, you will receive a temporary account number which your credit card company knows about but makes it untraceable by others.

Major credit card issuers, including banks, will require the cardholder to have an active checking account while issuing virtual cards. They will also conduct credit checks to know the status of your credit score and credit history. However, some financial platforms will offer virtual credit cards with minimal requirements for their customers.

Ensure you access verified platforms to avoid data breaches and use valid virtual account numbers.

Since virtual credit cards are in digital formats, you can only use them for making online purchases, not in-store purchases. However, virtual credit cards offer better security when making online purchases by protecting your actual credit card information. Thus, instead of using your actual credit card number for online shopping, you will enter your virtual credit card number.

Also, your virtual account statement will be separate from your physical card’s account statement, maintaining anonymity during purchase.

You can only request and use your virtual credit card when your credit card application process is successful. Additionally, virtual cards allow cardholders to access their credit card account even before the physical card arrives. Therefore, using your virtual credit card, you can make card not present transactions, such as mail order transactions.

Also, you can set a spending limit on your virtual card for such transactions without using any information on your physical card.

What is a Virtual Credit Card Payment?

virtual credit card payment

A virtual credit card payment is any transaction made online, including shopping online using a virtual card. You can make an online purchase, book a rental car, and even ship products from an online merchant using virtual cards. However, before making online purchases, ensure the vendor takes other digital payments.

That way, you can use your virtual card as a safer alternative to prevent fraudulent purchases from your credit card.

A great advantage of using virtual credit cards is the ability to assign specific virtual account numbers to specific merchants. If you make recurring payments to a certain online merchant, you can only assign a virtual card number to the merchant. However, if you feel there may be a data breach, you can cancel the assigned virtual number anytime.

Then, you can assign a new merchant-specific virtual number to the particular website while protecting your data.

What is a Virtual Credit Card Number?

virtual credit card number

Virtual credit card numbers are unique number sequences offered by your credit card company for shopping online. During checking out after making an online purchase, you will enter your virtual number instead of your actual credit card number. Thus, you will mask your credit card information by replacing your actual card information with virtual account numbers.

The virtual credit card numbers are usually discarded after every use unless they are multiple-use virtual numbers.

Some major credit card issuers offer their customers extra protection of their credit card information by accessing extra features. For example, the Capital One credit card offers customers their virtual credit card number through the virtual assistant. The virtual assistant is a downloadable program in any browser extension, making it readily available.

Therefore, customers will receive a virtual card number generated by the assistant when they are ready to check out.

Other credit card issuers, like Citi Bank, offer the customer an accessible virtual credit card feature activated in their online account. Thus, customers will track each transaction made by any virtual card number used during all online purchases. That way, credit card companies are at the forefront of protecting their customers from online data breaches.

All of the virtual credit card information provided by the credit card company is temporary, making it untraceable by hackers.

What is a Virtual Terminal for Processing Credit Cards?

virtual terminal for processing card payments

A virtual terminal is a secure website used by online merchants to handle card not present transactions during online transactions. The virtual terminal uses an online dashboard to accept credit or debit card payments and process digital invoices. Some may include a card reader for transactions in the presence of the customer’s card.

Additionally, the customer can access the website through internet access and login credentials for their online account without downloading the app.

The merchant will send a link to the secure web page, and the customer will fill in their credit card information. The virtual terminal will process and reflect the payment to the merchant as the cardholder receives the receipt via email. The merchant will not capture all the credit card information belonging to the customer, ensuring the customer’s safety.

However, the merchant should take extra steps to ensure employees cannot store credit card information belonging to the customers.

What is a Virtual Credit Card Account?

virtual account

A virtual credit card account is the digital version of your checking account, which allows you to make safe online purchases. Therefore, the virtual credit card account is linked to your checking account and has the same features. Thus, you will receive the same rewards, charges, and benefits when you use your virtual credit card and physical card.

Your virtual credit card account is where your credit card company generates a temporary account number for your use.

You can request your credit card issuer to generate virtual card numbers when making online transactions. You will fill in the virtual card number for your online transaction, even as you shop online. Some virtual numbers can be used for multiple transactions, but most are single-use virtual numbers that become void after use.

Also, some credit card issuers provide features that enable customers to track their transactions through their virtual credit card accounts.

However, some credit card issuers do not require their customers to have an existing checking account. Such alternatives are helpful for people who have bad credit or those building credit and cannot access credit cards. Therefore, the customer will create a virtual credit card account on the platform’s website to access virtual card services.

Each financial platform has its own policies and conditions relating to virtual credit cards, including advantages such as multi-currency transactions.

What is the difference between a Virtual Credit Card Account and Digital Wallets?

digital wallet

A virtual credit card account is the digital version of your physical checking account that generates your virtual card numbers. Once you receive your virtual credit card information, you can use it on online platforms that accept any credit card. A digital wallet is a financial application users download on their mobile devices that makes online and physical purchases.

However, you can only use a digital wallet like Google Pay or Apple Pay for participating retailers.

Thus, virtual credit cards are widely accepted and do not require users to download an application. Both virtual credit cards and digital wallets will generate a temporary card number to protect the customer’s credit card details. However, you can store credit card details on a digital wallet without fear of a data breach.

You will not have to carry any bank information while making online or in-store purchases using a digital wallet.


Digitization of banking systems has created better fraud prevention systems for many people who make online transactions. Virtual credit cards are popular in the online community since they protect credit card information. Using credit card numbers will help mask your actual account from hackers who want to steal your credit card information.

Therefore, credit card companies help protect their customers online, even as they shop online.

A credit card issuer offers virtual credit cards to use as a safer alternative when making online purchases. Your virtual card will work similarly to your physical credit card, allowing you to set spending limits and expiration dates. Therefore, you can fully control your transactions before your physical card arrives.

However, it is important to consult with your credit card company before you request a virtual card number.


How Can I Get a Virtual Credit Card?

Ensure that you have an active checking account, which is a major requirement by most credit card issuers. If your credit card application is successful, you can only get a virtual credit card from major credit card issuers. However, a select few do not require their customers to have a checking account or conduct credit checks.

Requesting a virtual credit card is easy since most are free and require online applications. Thus, ensure your credit card company offers virtual account numbers before applying to understand the terms and conditions fully.

What are the Benefits of Virtual Credit Card Numbers?

The main advantage of using virtual credit card numbers is fraud prevention by protecting your actual account. Virtual credit card numbers are unique and are generated for each of your online transactions by the credit card company. Thus, any virtual number used for transactions will not be traced back to the consumer, lowering fraudulent activity.

Additionally, virtual card numbers can be set as merchant-specific for recurring payments to one online merchant. Therefore, making payments to the vendor will be fast and secure since the virtual number is replaceable by the customer.

What are the Downsides of Virtual Credit Cards?

The main disadvantage of virtual credit cards is that they are only available for shopping online. Virtual credit cards only exist in a digital format, restricting their use of online transactions. Also, using a virtual number for online payments is hectic if the merchant requires proof of purchase.

Due to their short lifespan, virtual credit cards are hard to trace, especially during a dispute process. Booking a rental car may also be hectic for the customer unless they save the virtual number in a digital wallet.

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