A virtual payment card is a temporary valuable credit card for online shopping or utility bill payments. Each card has its CVV number and validity details that the owner can only use online. It allows secure online transactions by reducing the risk of exposing card details to third parties.

Importance Of Holding A Virtual Credit Card:

1. We can choose the pay later option on the online payment platform for purchases in monthly installments.
2. A virtual card is helpful to buy any items from a small shop, market, shopping mall, hospital, and various e-commerce platforms.
3. We can use it for travel expenses, EMIs, supermarket credit, dental EMI, or grocery credit.
4. A digital payment card gives us instant credit on registration and also allows us to pay any utility bills via a UPI QR code.
5. It works as the best expense tracker app because you can track where your money is going.
6. It also helps to build a good credit score so that we get credit limit increases for our line of credit with timely repayments.
7. We do not need to pay any interest, processing fee, prepayment penalty, or security deposit if we use a virtual credit card.
8. Users can enjoy extreme financial independence by depositing a nominal amount when they use their credit cards for any transaction.

What Are The Top Features Of A Virtual Payment Card?

• It protects us from any data breach due to an unsecured network connection.
• We can create a virtual credit card using the internet banking facility provided by the banks, which further helps users safeguard their online identity.
• We do not need to physically make any additional payments or issues by credit card providers.
• Virtual credit card holders only need their smartphone to do any transaction valid for 48 hours.
• All the primary card holders can apply for a digital credit card for single-use purposes only.

What Are The Reasons Behind Lower Credit Scores?

A credit score is not the only factor banks use to determine the creditworthiness of an individual, but it is the most important one. Our overall credit profile is one of the critical elements of getting reasonable rates and also for getting quick loan approval. Some of the reasons behind lower credit scores are as follows:

1. Huge Investment In Property:

Real estate properties are the most favored asset class for most Indians. But over-investment in those assets through commercial real estate loans may cause some problems as per the RBI guidelines.

2. Holding Multiple Credit Instruments:

Credit cards are mainly short-term credit instruments that can seriously affect our credit score. If we can pay the entire credit card bill before the due date, only then will our credit score be higher, and we will get a good credit score.

3. High Utilization Of Credit:

We should always have a perfect repayment track record on all our loans. Otherwise, it may hit our credit score badly if we do not regularly pay the due loan amount.

Therefore, we should always ensure that our overall utilization of funds does not cross the total credit limit at any time.

Banks or other online platforms generally consider many factors before approving a credit card, including the monthly income of the applicant and also the repayment capacity of that individual.

Finally, we must maintain a clean slate when we close a loan account or a credit card to protect our CIBIL score.