With the increase of identity theft virtual credit cards are becoming more popular each day however they must be distinguished from the prepaid credit cards we have previously discussed. Virtual prepaid cards not only help save you from identity fraud but can also help you protect your spending habits and thereby from hampering your credit report. These internet credit cards are created specifically for online purchases. However it might be advisable to enquire with your bank how their virtual credit cards work (if they issue them). In today’s fast paced e-commerce world, where consumers and sellers are miles apart, prepaid virtual credit cards might be the answer to making safe and risk free purchase over the World Wide Web.

Prepaid Virtual Credit Card: Definition

A prepaid virtual credit card, as the name suggests is virtual hence no real plastic card is issued. Most banks issue them. All you need to do is log on to your internet banking and apply for a virtual credit card and fill out the corresponding details. While applying select your limit based on the amount you are looking to shopping online. It is essential to remember that these internet credit cards usually expire within 24 hours and hence it is advisable to use them as soon as they are issued.

Once you have applied for the virtual prepaid card you will be issued with a 16 digit card number and a CVV2 number coupled with an expiry date. These cards are normally accepted at all online merchant stores who accept Visa or MasterCard.

Features of Virtual Bank Cards

Listed below are some of the features of virtual bank cards:

• Virtual credit cards usually have a fixed spending amount and this is directly proportional to the limit that you selected while applying for the same.
• An internet credit card usually has an expiration time of about 24 hours and they are usually issued with temporary PIN numbers.
• Consumers can use both debit and credit cards to create virtual prepaid cards from their bank accounts.
• If after usage, your virtual bank card has any balance left on it the amount is transferred back to your bank account.

Advantages Of Virtual Credit Card On Internet

• Protection Against Identity Theft: Virtual credit cards on internet are a great way to protect yourself against identity theft while purchasing goods online. Owing to the fact that these cards predetermined spending limits and set expiration dates it a safer way to purchase online and you can be rest assured that in the event of identity theft the amount lost will be refunded by your Credit Card Company or bank any way. This is usually listed in the terms and conditions of your contract.
• Immediate Availability: These virtual credit cards are almost immediately available for use. There is very little or no wait time between applying for the cards and being able to use it.
• No Impact On Your Credit Report: Virtual prepaid cards have absolutely no impact on your credit report unlike a real credit card and does not create massive credit card debt. These are also a good way to keep a check on your spending as they can be used over and can be refilled. Prepaid virtual credit cards offer the freedom of a credit card without the impact of a real credit card balance on your credit report.

Disadvantages Of Prepaid Virtual Credit Cards

• 24 Hour Expiry: The first distinct disadvantage of a virtual credit card is that they usually expire within 24 hours and hence it is advisable to use them as soon as they are issued.
• Spending Limit: Most banks while issuing prepaid virtual credit cards place spending limits on them. This is done to not only protect the consumer in case of fraud but to also protect the bank as in the event of fraud or identity theft the banks are liable to refund the customer.
• Delay In Dispatch Of Goods: Another drawback of virtual prepaid cards is that until the payment made by a virtual card does not clear or hit the merchant’s account he does not dispatch the goods. This could result in a delay in consumers getting their goods.

Virtual credit cards are beneficial for consumers afraid of identity theft or for sending online. Prepaid virtual credit cards are safer, easier and is hassle free with the added protection of indemnity in the event of fraud or identity theft, not to mention the advantage of not having any impact on your credit report.