Prepaid virtual credit cards are basically like credit cards that are specifically designed to be used online or over the phone. The other special feature of a virtual credit card is that it is, in fact, virtual—there is no physical card. Virtual credit cards are generally purchased online and consist of a credit card number, an expiration date, and a CVV number.
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Prepaid virtual credit cards are usually a Visa or MasterCard and the method of paying for them varies depending on the issuer. In principle, they are able to be used at any online or phone vendor where an ordinary Visa or MasterCard can be used.
The theory of a prepaid credit card, even a virtual prepaid card, is that the cardholder pre-loads the card with money or buys it at a set value. In other words, if you buy a $50 prepaid virtual card, you can buy $50 worth of goods or services on it and then the card would be useless, unless it was rechargeable.
What are the benefits of a prepaid virtual credit card?
The greatest benefit of a prepaid and anonymous virtual credit card is credit identity protection. It allows you to buy goods and services that require a credit card for purchase without having to give a lot of personal information to the seller. It also provides the security of knowing that you will never accidentally drop your card or leave it somewhere because there is no physical card.
A prepaid virtual credit card is a great way to limit spending. Since you can’t spend over the amount that you have on the card, the card assures you that you will stay within your budget for the purchases in which you intended. Another added benefit of the spending limit is that if someone gets your card information somehow, they can’t run up too many charges.
A prepaid virtual credit card is also a good way to send a gift to someone far away. Since there is no physical card, there are no mailing fees and no waiting for it to arrive, and it can be used at just about all of the same online and phone locations a regular credit card can be used at.
Prepaid cards are also gaining popularity in the business world because they can give a company more control over spending on corporate cards. Instead of giving an employee a corporate credit card with a high limit and run the risk of the employee abusing it, a company can give an employee a prepaid virtual card with a set amount for a given project and be confident that they will not overspend. The cards are also good for international business, especially when dealing with countries, which will not accept some other forms of payment.
What are the dangers of a prepaid virtual credit card?
There are some scam sites out there that claim to sell virtual prepaid credit cards, but will actually take your money and run. There are a couple of ways to check for scams, including checking how recent the domain was registered, the more recently, the more likely it’s a scam. Another way to check on some sites is to click on the logo of the affiliated company or companies, like Webmoney. If the click doesn’t go anywhere, it’s probably a scam.
Another danger of a prepaid card is that they are not regulated under the same protections as a regular credit card. According to an article published by the Huffington Post, prepaid card issuers have the option of whether to protect the cardholder under the Electronic Fund Transfer Act in the event of fraud. Where with a regular card, cardholders are usually protected under a zero liability clause.
What is the difference between a prepaid virtual credit card and a gift card?
Prepaid virtual credit cards are very similar to gift credit cards if you look past the obvious difference of one being a virtual card and the other one being an actual physical card. One difference that can crop up is that some virtual prepaid credit cards are more widely accepted than gift cards. Some virtual prepaid credit cards even claim that they can actually be used to verify an address for PayPal.
Can I get a prepaid virtual credit card if I have bad credit or no credit?
Since a prepaid credit card basically collects the whole value of the card plus a service fee up front, there is no risk for the card company. With that in mind, they have no need to do a credit check, so your credit history is irrelevant for the purposes of getting a prepaid virtual credit card.
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