When the concept of a credit card first came to the general public, many were skeptical about its benefits over cold, hard cash. Some even remain firm believers in physical money as the best way to pay, even as credit and debit are commonplace payment methods for all kinds of purchases across the globe.
Likewise, today some remain skeptical about the emergence of virtual payment cards, unsure of this payment method's benefits or potential drawbacks. Soon enough, those unaware of the benefits of virtual cards may find themselves once again behind the trends of emerging financial technology, missing out on many enticing benefits of using a virtual payment card.
In today’s increasingly exposed digital world, virtual payment cards can provide an element of anonymity and security that your physical credit cards cannot. But are these virtual cards the right choice for you?
What are Virtual Cards?
Virtual payment cards are not to be confused with digital credit or debit cards, as they do not serve as your primary source of accessing and using the funds from a financial institution. Instead, virtual payment cards are a barrier between your credit or bank account and the merchants you are paying for services or products.
This payment method is also known as a “temporary card” or a “pseudo-card.” Virtual card numbers are created online and aren’t copied from any physical cards you own, leading to more secure transactions.
For example, if you’ve purchased something from a retailer whose system has been breached, the hacker will only find the number for your virtual card rather than a credit card number. Any hacker that gains access to your virtual card will be able to do a lot less damage than if you gave the retailer your credit card details.
Two Card Types
Virtual payment cards typically come in two varieties—subscription and temporary cards. With a subscription card, you put the amount of money you want to spend on your virtual card and use it until the funds are entirely spent. Then you can choose whether you wish to add more money to the card or cancel it.
Temporary cards, also known as “burner cards,” are deactivated by the service provider once their funds run out. Sometimes, these temporary cards may only be for one-time use, and anyone who gets access to the card number will find it completely useless.
How to Get a Virtual Card
Many service providers for virtual cards will allow you to set up an account with them to create virtual cards. Often, these providers may charge a fee for each card you create or charge monthly for their services. However, some companies allow you to create and use virtual cards for free under certain conditions.
It’s often faster to create and use a virtual card than to get a new credit card. These cards don’t require a lengthy approval process and appear on your device instantly rather than being mailed.
How to Use a Virtual Card
Virtual cards are often contained entirely on your phone, allowing you to purchase anything you could online with a traditional credit or debit card. These cards can vary from platform to platform, and spenders can use some in physical stores with services like Apple Pay. This offering will often depend on the stores that partner with such platforms and are not likely available at every store you go to.
Like digital cards, you may store virtual cards on a digital wallet. You must ensure that you have loaded your virtual card with enough funds for the purchases you want beforehand, otherwise, you may find yourself short of cash at checkout.
Benefits of Virtual Cards
There are several reasons virtual payment cards appeal to consumers, including:
Privacy: One of the most apparent benefits of a virtual payment card over traditional cards is the added layer of privacy, allowing every purchase to carry less risk.
Set limits: Some cards can have limits placed as to where they’re used. For instance, you can set up a fund limit for a card dedicated to online payments for Amazon, making it impossible to overspend.
Easy to cancel: Virtual cards are easy to cancel and replace online should anything go wrong.
Drawbacks of Virtual Cards
With such limited risks, virtual credit cards will likely become popular for spenders. Still, this payment method is imperfect, and there are some drawbacks to consider before going all in.
Fees: Virtual cards can carry fees with them, which may be undesirable to some consumers. While these cards provide extra security for your funds, it comes at a price. Some companies offer free virtual cards, so it might pay to do some recon.
Verification issues: Your virtual card number is subject to change frequently. However, certain purchases require verification of your payment, which is tough to provide if you cannot reaccess the same card number.
More set-up: Virtual cards can be personalized to fit your needs, including set spending limits, retailer limits, and expiration dates typically up to a year from creation. Having a highly specified card does require more front-end work from you, however.
For example, hotels and rental agencies often require you to pay with the same card you made the reservation, making it a hassle to use a virtual card.
How dash.fi Can Help
With dash.fi, you have access to unlimited virtual cards, to which you can assign unique names, addresses, zip codes, and limits for every expense. If you need to increase your spending limits, simply get this done in mere minutes with dash.fi, rather than waiting days.
Register with dash.fi and take advantage of virtual payment cards like never before, ensuring that you always have control over your own money.
The Bottom Line
Virtual cards can be a great way to add an extra layer of protection to your online purchases. You no longer have to rely on the security measures of every retailer you shop to protect your payment information from malicious hackers.
While virtual cards may not be preferable for everyone, they carry significant benefits. With dash.fi, you can have total control over where and how much your money is spent. In today’s increasingly digital world, you can start using virtual cards to protect your money right now.