what is it, how to register and how to use it

what is it, how to register and how to use it

Content:

What is a virtual credit card?

This is an analogue of a traditional credit card, but without a physical medium. Having ordered such a card, a person receives only a set of its details, but not plastic. However, this data is quite sufficient to pay with a card on the Internet – on marketplaces, in online stores, and so on.

Since the virtual credit card has no physical medium or PIN code, it can only be used for online payments. You won’t be able to buy groceries or furniture in a regular store.

However, some cards can be linked to contactless payment services, and then this restriction is lifted.

Virtual cards also have other features:

  • you cannot withdraw cash from such a card;

  • there is no function for making transfers to individuals – although some types of cards allow this to be done, but only at the expense of the owner’s own funds, and not at the expense of the credit limit;

  • You can’t use a virtual card to pay for services, for example, going to a hairdresser or getting a manicure;

  • You can’t top up your mobile phone balance with it.

At first glance, there are many disadvantages. But there are also advantages. Thus, a virtual credit card is made instantly and is immediately ready for use.

This is convenient if it is important for the client to pay for their purchases in a short period of time, rather than waiting for the plastic card to be issued.

There is also no need to go to a bank branch to get the card – as soon as the bank approves the issuance of a virtual credit card, all the details will be sent to the client in a message.

What is it for?

Since a virtual card is simply a set of details, in most cases it is used to pay for online purchases. Surveys of owners of such cards show that they mainly order virtual credit cards when they need to pay for purchases on the Internet, but do not have enough personal funds.

A virtual credit card is an online wallet that can also be used as a backup. Many banks provide free service for such cards, which is very convenient and economical.

Who can apply?

A virtual credit card, like a regular one, can be issued by any individual who has reached the age of 18. The card is issued through the bank’s mobile application used by the client, or through a personal account on the bank’s website.

To apply for a credit card, you will need a passport and income information. you need to fill out an online formindicating passport details, the amount of the desired loan, and your approximate monthly income.

Different banks consider such applications in different timeframes – from several minutes to several hoursIn a disputed situation, the bank may request income certificatebut most applications are approved if the borrower has a good credit history.

Once the application is approved, the new card appears in your personal account and in the banking mobile application. From this moment on, you can use it.

Types of virtual credit cards

Virtual credit cards are a relatively new product for the market, but even in the short time of their existence they have received recognition and approval from users.

Clients of various banks rightfully appreciate the convenience of such a credit card and the speed of its issue. And banks strive to improve their credit offers, making them even more attractive to users.

There are several types of virtual credit cards that you can choose from depending on your needs:

  1. Disposable. These cards are used for one transaction and then blocked, reducing the risk of data theft.
  2. Reusable. They are suitable for regular online purchases and subscriptions and may have a limited validity period.
  3. Cashback cards. They allow you to return part of the money spent, which is beneficial for frequent purchases.
  4. Virtual cards with limits. Allows you to set a specific limit for purchases, which helps you control your spending and avoid overspending.
  5. Virtual cards for subscriptions. These cards are designed specifically for paying for subscriptions to services such as streaming platforms or apps.
  6. Cards with the ability to freeze. You can temporarily “freeze” the card and then reactivate it when needed. This increases the security of use.
  7. Cards for corporate needs. They are issued to employees to pay business expenses online, which is convenient for companies with regular online transactions.

Today, there are many credit cards on the market from various financial institutions, as well as major telecom operators.

Virtual credit cards offer:

  • MTS,

  • “Alfa Bank”,

  • Webmoney,

  • “Russian Standard”

  • Promsvyazbank and many others.

Most banks also provide virtual card users with access to savings programs and bonus systems. In addition, many financial institutions have their own partner networks, where virtual credit card holders can make purchases on more favorable terms – for example, receive cashback.

Grace periods, limits and interest rates

Despite the fundamental difference of a virtual credit card (the absence of a physical medium), using such a card is almost no different from using a traditional plastic card – with the exception of withdrawing cash from ATMs.

Most offers today are limited to 100 thousand rubles, although there are also credit cards with an extended option – up to 300 thousand (for example, Alfa-Bank or Rosselkhozbank).

Read also: How to Unblock a Bank Card After a Cryptocurrency Transaction

As for interest on the loan, the rates here are almost identical to the rates on regular “plastic”. At the beginning of use, the rate is usually set within 20-29%. If the client does not commit violations when using the credit card, then this figure can be reduced by the bank in the future.

Many banks offer new owners of virtual credit cards easier terms – the so-called grace period. Its duration varies among banks, but usually does not exceed 50 days. The grace period makes it possible to reduce the burden on the payer, exempting him from paying interest for this period.

That is, the client pays off only the principal loan without paying interest to the bank. This is another advantage of virtual credit cards.

The exact terms of the loan, in any case, are negotiated individually with each client.

The credit limit can be increased or decreased depending on the borrower’s credit history, the amount of his monthly income, and the presence of other outstanding loans (the so-called debt burden, i.e. the ratio of loan expenses to monthly income).

Read on the topic:

What is a business card and how to use it

What can you pay for with a business card?

It is important to remember that after the loan is approved, it will have to be repaid, and how easy it is to do so depends on the borrower, their income and expenses. Therefore, it is important to carefully study all the conditions offered by the bank and make a balanced and thoughtful decision before giving in to the impulse to buy impulsively and apply for a virtual credit card.

Account replenishment

Since the funds on the virtual credit card are the bank’s funds, the borrower is obliged to return them within the period specified in the agreement. To do this, the account must be replenished.

There are several ways to do this:

  • via a mobile application or personal account of the bank, using funds from your main card (for example, a salary card);

  • transfer from an electronic wallet;

  • by transfer using bank details or via the SBP from an account opened in another bank (a commission may be charged);

  • in cash through the cash desk of the bank that issued the virtual card.

You can test all the methods and choose the one that is most convenient and requires the least expense.

A virtual credit card is a convenient modern solution. And the speed of issuance and ease of use make a virtual credit card the best solution for those who want to keep up with the times.

Cover photo: Pexels

Source: rb.ru