September 15, 2025 · 11 mins read
Santosh Kumar
A credit card is a system by which a person can borrow money from a financial institution up to a limit and pay it back later. Credit cards in India have grown steadily since the 1980s. The banks started offering credit cards in India since then, and used to offer easy and cashless payment options. But at the beginning, it was only for the elite class customers. But because of the offered convenience, credit cards soon became very popular among a larger population. With all the emerging technologies such as rewards, points, EMV chips, and contactless payment options, credit cards are evolving steadily and starting to play an important role in India's financial ecosystem. There are two kinds of credit card services offered in India now: Physical and virtual credit cards. This article will illustrate the details of virtual and physical credit cards with their advantages, disadvantages, similarities, differences, and finally, some frequently asked questions on virtual credit cards.
Virtual Credit cards are credit cards without a plastic card. These cards have a 16-digit number and an expiry date that is randomly generated. This number can change with each merchant or transaction.
Virtual credit cards can be used in online transactions only, but an app or browser extension might be needed to use these cards. Sometimes, mobile phones might not work, but a desktop or laptop browser may be needed for doing a transaction with virtual credit cards. Other than these key differences, virtual credit cards work the same way as physical cards, and every month, there is a credit card statement as well. Although there is a common pattern, the features of different virtual credit cards may vary.
With the increasing push towards a cashless economy, virtual credit cards in India have been growing steadily since their introduction.
Virtual credit cards provide numerous benefits over a physical credit card.
Better security: Virtual credit cards typically come with a one-time use and can only be used within a time limit. As the usage is limited and can only be used online, the chances of credit card fraud are far less and almost minimal compared to a physical credit card. But in case there is any issue, all that needs to be done is to log in to the account and cancel the virtual credit card number by following the directions of the card issuer.
More flexible: A virtual credit card can be used with an existing internet banking account. No new account needed. The cards can be used online, for any merchant, and for any amount of money. Provided the merchant accepts payment via virtual credit cards.
More convenient: A virtual credit card has no physical form, so there is no need to carry it anywhere. Hence, unlike physical credit cards, no risk of losing the card, nor is there a chance of the card getting stolen.
Spending control: Sometimes virtual credit cards come with a maximum spending limit, hence there could be control on spending, and there is less chance of developing credit card debts.
Anonymity is maintained: In a virtual credit card, no details of the card are shared with the merchant, unlike physical credit cards, and anonymity is maintained. This adds an extra layer of protection to online transactions.
Also Read: How to Set Limits for UPI Transactions on Credit Cards
Similar to the advantages, there are limitations to virtual credit card systems:
No in-person transactions: Virtual credit cards are not physical but only digital. These cards cannot be used for in-store options like clothes or groceries. These cards also might not work like hotel check-outs, car rentals, or anything that requires in-person transactions. Even if you need to pick up an order and need ID verification, a virtual credit card may not work.
Highly technical: Since a virtual credit card is totally online, this might not be an option for a person who is not so used to technology. A low-tech person will need training to operate a virtual credit card.
Problem with order return and repeating transactions: Since virtual credit cards are digital, returning a physical item and getting a refund could be a major problem, as the payment mode might not work at the time of return, as the expiration dates of these virtual credit cards are typically short. Repeating transactions such as digital subscriptions also might not work for virtual credit cards, because of the same issue of a shorter expiration date.
No cash withdrawal: Virtual credit cards do not work for cash withdrawals.
Limited availability: Physical credit cards have been available for a long time, but virtual credit cards are pretty new in that context. Hence, the options to have a virtual credit card are still limited.
Also Read: Does Closing a Credit Card Improve Your Score?
There are several virtual credit cards in India. Following is the list of major virtual credit cards in India:
HDFC Bank: The brand name of the virtual credit card for HDFC is called NetSafe. This also gives an option for having a virtual debit card along with a credit card. This service can be taken in addition to a physical credit card. Typically, this service works great for online shopping and transactions.
HDFC virtual credit card might have some joining fees, interest, and late payment fees. At the same time, some cards might help you earn cashback with certain merchants. Also, these cards will let the customer set a spending limit, but this can be modified based on the need, credit score, and spending patterns. Hence, the customer can choose according to what they are looking for.
State Bank of India (SBI): The State Bank also provides virtual credit cards as corporate cards. These virtual credit cards can be used for single or multiple uses. The amount of spending, the number of transactions, merchants, and validity can be controlled. It can also be blocked if needed after authentication. The card generates e-statements, and there is a 24/7 service desk available for support if needed.
Although there is no joining or annual fee, an interest fee is applicable after 20-50 days. The SBI virtual credit card can be used internationally with a small conversion fee of up to 3.5%. Some other fees and surcharges might apply as well to the SBI virtual credit card.
Kotak Mahindra: If the customer has a current or savings account, the person can have a virtual credit card with Kotak Mahindra. The person does not need to present physically in the bank to get the virtual credit card, nor does it need any credit history check.
Similar to any other virtual credit card, Kotak Mahindra virtual credit cards are also digital. But these cards have limited validity and are restricted to a limited number of transactions. The validity is typically for 48 hours after issuance, which can be changed by the bank if needed. If the validity is used before use, then the remaining time and/or some balance amount stays unused, and both can be sent back to the primary account from where the card originated. The brand name of the card is Netc@ard.
Standard Chartered Bank: This is an excellent way of getting a virtual credit card. This instantly gives access to certain online purchases. Also offers discounts for certain popular brands. Other than this, Standard Chartered virtual credit cards are pretty easy to set up, and their easy cancellation policy has diverse online usage. Unlike other cards, Standard Chartered virtual credit cards also have extended validity.
Other than these major ones, there are other virtual credit cards available (such as Enkash) for use as well.
Also Read: Contactless Credit Cards – Are They Safe?
As opposed to virtual credit cards, a physical credit card is a physical, plastic card. This card comes with a printed name of the cardholder and a 16-digit number, an expiry date, and a three-digit security code (CVV) number. Physical credit cards are used physically for in-person transactions at various places. These places could include restaurants, hotels, retail stores, grocery stores, and many other kinds of physical stores. A physical credit card can also be used for online transactions or purchases.
As physical credit cards have been widely accepted for a long time, these cards have become ideal for daily expenses. In fact, a physical credit card lets a person borrow money upto an extent, hence it can also be used for emergency purposes.
All major banks in India, such as HDFC Bank, SBI (State Bank of India), ICICI Bank, Axis Bank, Kotak Mahindra, and many more, provide credit card services to their customers. Cards from these providers can provide cashback, rewards, and travel benefits to offer more flexibility for credit card usage. Physical credit cards are also tied to help a person's credit score grow, which can help a person secure future loans, mortgages, and get more credit limits.
Physical credit cards are widely used for offline physical options as well as for online transactions. Physical credit cards come with bigger usage limits, and they're ideal for daily use. These cards come with fraud protection, contactless payments, rewards and points programs, and security PINS. All major financial institutions, such as SBI, Axis Bank, ICICI Bank, and HDFC Bank, offer physical credit cards in India. But a big drawback for physical credit cards is that they always have the risk of theft and loss. Even unauthorized use can happen online or offline if all precautions are not taken.
But a virtual credit card is only present digitally, and so far, these cards are not designed for in-person transactions. These virtual credit cards also generate a 16-digit number and CVV, but the expiry date is very short (can be 24-48 hours only) with limited usage. Because these cards are valid only temporarily with limited use, it significantly reduces the chances of fraud. Because of their digital presence only, these virtual cards cannot be stolen. Most major financial institutions, such as SBI, HDFC Bank's "Netsafe", Standard Chartered Bank, and Kotak Mahindra, offer physical credit cards in India. But a big drawback is that virtual credit cards cannot be used for offline and physical purchases, or even for recurring purchases.
Hence, both virtual and physical credit cards come with their own advantages and disadvantages and should be chosen according to the needs of the person.
Also Read: What Is a Grace Period on a Credit Card?
A virtual credit card is a virtual and digital-only card issued by a financial institution or bank, designed only for online transactions. These cards are not physical cards, but come with a unique number, a CVV, and a shorter expiry date.
There are major differences in the usage types of virtual and physical credit cards. A virtual credit card is only to be used online for secure transactions. But unlike physical credit cards, virtual ones cannot be used for in-person transactions.
Virtual credit cards are absolutely safe to use, and each of these cards generates unique numbers for every transaction, with limited use and a CVV number. This significantly reduces fraud charges. With limited usage limits, virtual credit cards also reduce the risk of increasing credit card debts.
Whereas some virtual credit cards may allow recurring or repeating payments, most of the time, because of the limited expiry date, virtual credit cards cannot be used for recurring or repeating payments.
Most large banks and financial institutions (such as SBI, HDFC, Kotak Mahindra, and many more) in India provide virtual credit cards. Most of the Indian virtual credit cards are linked to a person's personal checking and/or savings account. At the same time, these cards are offered free; other fees could be associated.
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