HomeCredit CardVirtual Credit Card vs Physical Credit Card: What’s the Difference?

Virtual Credit Card vs Physical Credit Card: What’s the Difference?

Credit card usage has increased exponentially in the last few years in India. A Reserve Bank of India report suggested that credit cards in circulation almost touched 49 million in May 2019, as opposed to just 38.6 million in the same period last year. This sudden rise in credit card usage has also generated interest in virtual credit cards.

What Are Virtual Credit Cards?

Virtual credit cards are special cards that consumers can use for online transactions. With the rise of e-commerce and digitization in India, most individuals are inclined to transact online than before. However, there are obvious security issues and data theft concerns.

Even though most websites today employ encryption and other data protection methods, customers are always at risk of credit card information theft online. To prevent such security lapses, NBFCs across India developed virtual credit cards.

To use a virtual card, you must have one issued with a pre-set credit limit. Make sure you plan your finances or expenses accordingly. Note that virtual cards come with a limited period within which the sum in question must be spent.

For instance, you have a credit Rs.5,000 into the card. However, you only spend Rs.4,000 from the digital card. If the card has a validity of 1 day, the remaining Rs.1,000 may be waived off from use after 24 hours.

Today, consumers can link their virtual cards with the physical one to get the most out of their credit cards. Linking the two cards lead to a single statement generation for transactions on both cards.

Features and Benefits of Virtual Credit Cards

Over time, virtual cards have become popular with consumers. You can look forward to the following features when availing such a card.

  • International usage possible – Depending on the financial institution you choose, virtual cards can allow you to buy products and services from international websites. Nevertheless, not every financer may cater to international purchases with their virtual credit cards so make sure to check on this pointer if you may need to make international transactions or purchases.
  • Flexible usage – The user can choose the amount of credit he/she can utilize. The amount remaining in the card is auto-credited to your account after a pre-determined period.
  • Increased security – These cards come with a usage period of 24 hours or more. Further, before issuing the card, the financial institution sends an OTP to your registered mobile number. Also, it is eligible for specific verification.

Cyber fraud is one of the most common types of credit card frauds. Utilizing virtual cards can successfully prevent such events.

Comparing Physical Credit Card and Virtual Credit Cards

When considering a virtual credit card apply, keep in mind that such a card is only useful for online transactions. Thus, you should not compare them with your physical cards. Reputed NBFCs offer feature-rich unsecured credit cards, such as the Bajaj Finserv RBL Bank SuperCard which can help you financially for both online and offline transactions.

Listed below are some advantages of a physical card over its digital variant –

  • Avail and accumulate reward points. This feature is absent in virtual credit cards.
  • Users cannot utilize discounts or special offers when purchasing with a digital card.
  • You cannot swipe a virtual card on POS machines unlike a physical card.
  • Physical cards come with interest-free periods.
  • You cannot convert payments into EMIs when using digital cards. This facility is available for the physical variants.
  • Physical cards allow customers to use the credit card to improve their credit score.

As a consumer, you must understand that virtual cards are not an alternative to your physical credit cards. Instead, they are a safer mode of transaction online, limiting any chance of credit card fraud or scam and usage at the same time.

Ajeet Sharma, the founder of Financegab and a well-known name in the field of financial blogging. Blogging since 2017, he has the expertise and excellent knowledge about personal finance. Financegab is all about personal finance which aims to create awareness among people about personal finance and help them to make smart, well-informed financial decisions.


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