Many consumers are exploring ways to leave their debit card at home by using an online virtual debit card for both online and in-store purchases.
This article includes tips, suggestions and general information. We recommend that you always do your own research and consider getting independent tax, financial and legal advice before making any important decision.
A virtual debit card is a type of payment method that works just like a traditional debit card. The difference? A virtual debit card only exists in a digital format. Here's what to know.
A virtual debit card operates similarly to a traditional debit card. That means it includes the same 16-digit debit card number, expiration date, and CVV number.
While there won't be a physical card, it’s still possible to pay in-person with a virtual debit card. The online virtual debit card details can be added to a digital wallet on a smartphone, giving people the option to pay with a tap or QR code at retailers that offer contactless payment methods.
The terms ‘virtual cards’ and ‘digital cards’ can sometimes be used interchangeably, even though they mean different things.
There are important factors to consider before applying for a virtual debit card. Everyone’s financial situation is different, and there are various reasons someone might apply for one.
Useful factors to consider include: if a bank offers this type of card, if there are fees and other associated costs involved, how the card will be used and for what, mobile wallet compatibility, and if there’s the ability to set spending limits.
There may be other factors someone wants to consider and these may vary depending on their individual needs.
The process for applying, getting, and using a virtual debit card can vary depending on the issuer. Account fees, overdraft fees, interest, and other costs may apply, so it’s important to read and understand any terms and conditions.
An example of how to get an online virtual debit card is below:
Some digital banks offer virtual debit cards. Typically, a potential customer would open an account with the digital bank first. The process for opening an account may vary depending on the bank, but it normally includes providing information such as: full name, date of birth, residential address, mobile number, email address, and proof of identity. A minimum balance could be required and fees may apply.
Then, depending on the bank, type of account, and available features, a customer may be able to get a virtual card associated with their existing account.
In some cases, more than one virtual card can be generated once an account is created. In other cases, customers may need to apply for a physical card to get virtual card access. Fees and other costs may apply.
Virtual debit cards can be a good option for people who don't want to carry a physical card or are looking for ways to shop online and with their smartphone.
Here are some potential benefits of virtual debit cards:
It's important to consider the potential drawbacks of virtual debit cards. Some examples include:
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