What Is a Virtual Credit Card?
A virtual credit card is a credit card to which the cardholder has instant access immediately after receiving approval from the credit card issuer. Such a credit card has all the same details and features as a traditional card in physical form, but to get a virtual card, the borrower does not need to wait for the card to be delivered to their home.
The cardholder can add a virtual card to any digital wallet, such as Samsung pay, Google Pay, or Apple Pay, and pay in stores. Many such cards can also be obtained in physical form if the borrower makes such a request.
Pros and Cons of Virtual Credit Cards
Pros
- Increased protection against fraud and theft. A virtual credit card allows the borrower not to have a standard card in physical form. A thief will not be able to steal such a card from the borrower's wallet. Moreover, if a hacking attempt is made, the cardholder can block it with one button, change the credit card number or even reissue a new card in a few clicks.
- The ability to customize a credit card. The cardholder can not only choose its external design but also change the PIN code or card number in the mobile application in a few clicks. Changing the PIN code allows the borrower to stop the withdrawal of money from their card by a thief. Changing the card number helps in paying with a card in services that have automatic withdrawal of money for a subscription.
- Profitable rewards, bonuses, and perks. Many instant approval virtual credit cards offer cash rewards, sign-up bonuses, and various perks to holders for using the card. Usually, such cards have from 1% to 2% cash back on purchases in all categories and can have up to 6% cash back on purchases in eligible categories. Such categories can be gas stations, grocery stores, entertainment purchases, restaurant purchases, and others.
Cons
- Payment without a physical card is not always available. Not all brick-and-mortar stores have payment terminals that accept payments from digital wallets. The borrower needs to take this fact into account when receiving such a credit card.
- Hotel booking and car rent issues. If the cardholder uses a change of card number, some of their reservations may be canceled because for booking a hotel or car for rent in advance, the card is checked for funds. Some hotels and car rentals do not accept virtual credit cards themselves, just because some holders of such cards change card numbers in order not to pay for the reservation made.
Types of Virtual Credit Cards
- A business credit card is used by business owners to finance businesses of any size. Such credit cards can help a business owner monitor business-related expenses separately from personal expenses and keep financial records more accurately. Moreover, such cards often have perks useful for businesses and can help in building a credit profile for future loans.
- Co-branded cards. Such credit cards are issued jointly by two parties. The first party is a bank or other financial institution that ensures the card's operability from the point of view of the banking system. The second party is a company or brand that adds perks or bonuses associated with this brand to the credit card. Most often, retail stores such as Amazon act as the second party. From here, these cards have discounts and promotional offers for online retail purchases.
- Cash-back credit cards offer holders of such cards the ability to receive cash rewards with each purchase. The percentage of cash-back is small, but the main advantage of such cards is that rewards are returned in the form of real dollars and not any points. Usually, such cards have from 1% to 2% cash back on purchases in all categories. The most profitable cash-back credit cards may offer increased cash back on eligible purchases in some bonus categories. Moreover, categories with increased cash-back may change every 3 months.
- Travel credit cards are created specifically for travelers. All sign-up bonuses, rewards, and perks in such cards are applicable only for spending in the travel category. Often, such credit cards offer cardholders to receive rewards in the form of miles that they can use to purchase discounted airline tickets. Credit cards for travelers may have a reduced foreign transaction fee. As perks, travel credit card companies offer discounts on paying for hotels, paying for rental cars, or additional free luggage.
- Secured credit cards, as well as unsecured credit cards, have a credit line. However, the maximum amount that the cardholder can withdraw from the credit line depends on the security deposit that the borrower deposits. Without making a deposit, the borrower will not be able to use a secured credit card. This card is great for borrowers with bad credit but a stable source of income. If the borrower has a low credit score, then most likely, they will be refused if they apply to open an unsecured credit card.
- Rewards credit cards have a rewards program that awards the cardholder a reward in the form of points. The cardholder can later use these points to receive discount offers in certain spending categories. Rewards cards are different depending on the category of spending in which they offer rewards. For example, some of these cards may offer rewards in the restaurant's category, while others encourage everyday spending habits.
Best Instant Approval Credit Cards
Blue Cash Preferred Card from American Express
Blue Cash Everyday Card from American Express
Costco Anywhere Visa Card by Citi
Capital One Walmart Rewards Card
American Express Green Card
Macy's American Express Card
How to Get Instant Approval on a Virtual Credit Card?
To get an instant approval for a credit card, a potential borrower must meet certain requirements.
The borrower must have a stable source of income. The borrower's debt-to-income ratio should not be higher than 45%. Employment or self-employment is best suited for opening a credit card, but dividends and income from alimony may also be suitable. To confirm the borrower's income, the credit card company may ask you to download pay stubs, W-2s, tax returns, or bank statements.
To be qualified for instant approval, the borrower must have a good or excellent loan. The minimum credit score is 650, but most credit card issuers have a minimum requirement of 670-700 credit score.
The borrower is advised not to apply for any type of loan too often. Usually, lenders trust potential borrowers less in the credit history of which there are several hard inquiries made in a short time.
Ways to Use an Instant Approval Virtual Credit Card
Instant approval credit cards are suitable for all the same purchases as the traditional physical credit card.
With this card, the borrower can make an online purchase since such a card offers immediate access to the card details that the holder can enter on any website.
The borrower can add this credit card to the digital wallet on the mobile device to make in-store purchases. However, they should carefully study which stores support this payment method. In general, most shops, gas stations, restaurants, and other establishments have long supported all known payment methods.
Once you earn rewards, you can redeem them for gift cards, cash back, other purchases, and statement credits. If you manage the card responsibly, you can improve your credit score and increase your credit limit. This will allow you to upgrade for better credit cards.