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What is a Virtual Credit Card?

By on September 19, 2022 5 min read
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What is a Virtual Credit Card?

When it comes to running a business, there are a lot of important decisions to make, including how to keep your financial information safe. Increasingly, credit card programs come with both physical cards (plastic) and virtual cards.

Virtual cards are essentially a second way to charge purchases to one credit account. A virtual card is typically accessible in the card program manager's web or mobile app. It will have a different number than you'll see on your physical card and is generally accessible only after you pass a secondary layer of account security. 

If you lose a physical card, anyone can pick it up and use it. Virtual cards may be more secure, as there is no way to "lose" the number. 

Virtual cards are also super convenient. If you don't have your physical card nearby, you can still make the necessary purchases to keep your business running smoothly!

An additional advantage of a virtual card is that you can use it immediately. The credit card industry in 2022 is suffering from supply chain problems, and shipments of physical cards may take longer than we would typically expect.

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What is a Virtual Credit Card and How Does it Work

A virtual credit card is a type of credit card that allows users to make online purchases without having to provide their physical credit card number. Just like physical credit cards, virtual credit cards typically have a credit limit and expire after a certain period of time. Some virtual credit cards may also be single-use, meaning they can only be used once and then expire. 

Virtual credit cards work by generating a unique credit card number for each purchase. This number is linked to the user's actual credit card account but is not visible to the merchant. This helps protect the user's existing credit card number from being stolen or compromised.

Virtual credit cards are a great way to protect your identity and credit card information when making online purchases. They are also a great way to keep track of your spending since, just like a regular card, they have a limited amount of credit, and you can view your transactions.

5 Benefits of Using a Virtual Credit Card

There are several benefits of using a virtual credit card:

1. Protection of your actual credit card number

Using a virtual credit card can protect your actual credit card number from being stolen or compromised. This is because the virtual credit card number is linked to your account but is not visible to the merchant.

2. Control over your spending

Since, just like a physical credit card, virtual cards have a set credit limit, and they allow you to view your transactions, they can help you track and control your spending.

3. Convenience

Virtual credit cards are easy to use and can be accessed online anytime.

4. Versatility

You can use a virtual credit card for a variety of purposes, such as making online purchases and payments, withdrawing cash from an ATM, or booking business travel.

5. Security

Virtual credit cards offer an extra layer of security when making online purchases. This is because the virtual card number is not the same as your actual account information, so if it is compromised, your account information remains safe.

How to Get a Virtual Credit Card

The process for getting a virtual credit card is relatively simple. In most cases, you can apply for a virtual credit card online. You will need to provide some basic information about yourself, including your name and contact information, as well as your credit card account information.

Once you have been approved for a virtual credit card, you will receive a unique credit card number that can be used for online purchases. Keep this number safe and secure since it is tied to your main credit card account.

Where Can You Get a Virtual Credit Card?

A variety of companies offer virtual credit cards, including Visa, American Express, and Mastercard. These companies provide virtual credit cards to their customers to make online purchases more secure. Using a virtual credit card instead of your actual credit card number can reduce the risk of your personal information being stolen or compromised.

Uses for a Virtual Credit Card

Since a virtual credit card is linked to your credit card account, it can be used for most purchases you typically would make with your regular credit card. This includes online purchases, in-store purchases, and even restaurant reservations.

Virtual credit cards are also a good option for people who want to make a purchase but don't have their physical card on them. For example, if you are out shopping and you see something you want to buy but don't have your credit card, you can use your virtual credit card instead. This can help avoid the need to always have a physical card with you.

Can I Use a Virtual Card for my Business?

Yes, a virtual credit card can be used for your business. In fact, it can be a great way to make online purchases for your business. Using a virtual credit card can protect your credit card information and ensure that your transactions are secure. That said, it's important to use a dedicated card for all business transactions to keep your business and personal finances separate.

>> Read More about Keeping Your Business and Personal Finances Separate

Why Would I Want a Virtual Credit Card for my Business?

Virtual credit cards also come with some added benefits that can be helpful for businesses. For example, many virtual credit cards offer purchase protection, which can help protect you against fraud or theft. Additionally, some virtual credit cards offer rewards programs that can help you save money on your business expenses.

So, if you're looking for a secure and convenient way to make online purchases, a virtual credit card may be the right choice for your business. Be sure to research different companies to find the best option for you, and read the terms and conditions of your card before using it. Before applying for a virtual credit card most card companies require a particular credit score. Learn more about what your business credit score is.

How to Use a Virtual Credit Card

When making a purchase with your virtual credit card, you will need to provide the unique number assigned to the card. You will also need to provide the expiration date and the security code.

It's important to keep in mind that not all merchants accept virtual credit cards. If you are unsure whether or not the merchant accepts virtual cards, be sure to contact them before making your purchase.

Additionally, some virtual credit cards may have fees associated with them. These fees can vary depending on the company that you are using. Be sure to read the terms and conditions of your card before making a purchase to avoid any unexpected fees.

Using a virtual credit card can help you protect your personal information and keep track of your spending. Be sure to research different companies to find the best option for you, and be sure to read the terms and conditions of your card before using it.

Things to Consider Before Choosing a Virtual Card

When considering whether or not to get a virtual credit card, it's a good idea to weigh the pros and cons. There are a few key differences between virtual credit cards and physical credit cards. Along with some differences between a credit card and a charge card. Here are some of the most important ones:

Fees: Many credit cards have additional fees, and virtual credit cards are no different, so be sure to read the terms and conditions of your card before signing up. These fees can include an annual fee, a monthly fee, or a transaction fee.

Acceptance: Not all merchants accept virtual credit cards, so be sure to check with the merchant before making your purchase. If the merchant doesn't accept virtual credit cards, you may not be able to use your card to make the purchase.

Usage: Virtual credit cards can sometimes only be used for certain types of purchases. Be sure to read the terms and conditions of your card to see what kinds of purchases are allowed.

Security: One of the main benefits of using a virtual credit card is that it adds an extra layer of protection when making online purchases. However, it's important to keep in mind that virtual credit cards are not immune to fraud or theft. So, be sure to keep your card information safe and secure.

The Bottom Line

A virtual credit card can be a helpful tool for businesses that want to make online purchases with extra security and convenience. Virtual credit cards are linked to your actual credit card account, and just like a physical card, they have a set credit limit and are only valid for a certain period of time. They can be helpful if you want to keep track of your spending or if you need to make a purchase but don't have your actual credit card on you. Additionally, virtual credit cards often have added benefits like purchase protection and rewards programs. So, if you're looking for a secure and convenient way to make online purchases, a virtual credit card may be the right choice for you.Fundid Capital

About Fundid

Fundid is driven by a mission to empower business owners on their growth journeys by simplifying business finance & access to capital. 

We spend our time thinking about what the world would look like if the 80% of businesses that have under 10 employees had access to the capital they needed to grow and thrive. We're solving this with our Business Capital, Business-Building Card, and Resources that include our business Grant Match Program.

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