How does a virtual credit card work?

@issac.schaden 

A virtual credit card, also known as a digital or virtual card, works similarly to a physical credit card but without a physical presence. It is a digital representation of a credit card that can be used for online purchases or transactions.

Here's how a virtual credit card typically works:

1. Creation: When you apply for a virtual credit card, the issuing bank or financial institution generates a unique card number, expiry date, and security code associated with your account. This information is usually accessed through a website or mobile app.
2. Online Use: You can use the virtual card details to make online purchases on websites or mobile applications that accept credit cards. You usually need to enter the card number, expiry date, and security code for payment.
3. Limitations: Virtual credit cards often come with specific limitations imposed by the issuing institution. For example, they may be valid for a certain duration, have a maximum transaction limit, or be limited to specific types of online merchants.
4. Security: Since the virtual credit card doesn't physically exist, it can provide an added layer of security for online transactions. It can help protect your actual credit card details from being exposed in case of data breaches or fraudulent activities. This way, even if the virtual card details are compromised, your real credit card information remains safe.
5. Disposable or Reusable: Virtual credit cards can be disposable or reusable. Disposable virtual cards are valid for a single transaction or a limited time, after which they become invalid. Reusable virtual cards can be used repeatedly until the expiration date.
6. Billing and Payments: Charges made using a virtual credit card are typically billed to your actual credit card account. You will still receive monthly statements showing the purchases made using the virtual card for the purpose of tracking your expenses.

It's important to note that the specific features and functionality of virtual credit cards may vary depending on the issuing bank or financial institution.