A virtual credit card is a temporary card number designed to protect your actual credit card when you shop online. If you worry about giving out your credit card information online, virtual credit cards can provide an extra layer of security to your online transactions.
Consumers who are concerned about online security may shield their credit card information from being stolen in a data breach or through an unsecured connection by using virtual credit cards. Here’s what you need to know about virtual credit cards and how they may protect your credit card information against data breaches.
How Do Virtual Credit Cards Work?
A virtual credit card is essentially just an additional credit card number used to protect your credit account. This temporary number cannot be tracked to your original account or your identity. If a merchant site is hacked, your virtual credit card number is useless to fraudsters. You will receive a randomly generated card number which is linked with your account.
Any transactions you make online with your virtual credit card will appear on your account statement as if you used your regular card information. However, your creditor will include certain restrictions on that number, like where you can use it or for how long. These restrictions make it hard to steal your credit information because you won’t have a persistent card number being used across multiple vendors or websites.
You can usually request a virtual credit card number with your credit card issuer through your online account.
Benefits of Virtual Credit Cards
Here are some of the important benefits of virtual credit cards:
Virtual credit cards provide extra protection in the era of data breaches. Best Buy, Delta Airlines, Orbitz, Panera Bread and Under Armour are just a few online websites that have been hacked since January 2018. In all, 4.1 billion records were exposed in the first half of 2019.
If your virtual credit card information is compromised in a data breach, you don’t have to cancel your whole account. This virtual credit card information would be useless to a thief in a data breach or an unsecured internet connection hack because it is disposable and limited in use. What’s more, virtual credit cards are nearly impossible to clone, which means a hacker isn’t going to recreate your virtual card number to make purchases elsewhere.
Many virtual credit card issuers allow you to set a specific time duration for use, from one-time or up to one year. Some issuers even provide virtual credit cards with spending limits to help you adhere to your budget. You can’t make any purchases once you meet the limit.
However, just because you can use one virtual credit card number for multiple transactions, numerous merchants, or for a longer usage period doesn’t mean you should. One-use virtual credit cards are more secure. Besides, limiting use is what makes a virtual number valuable protection against fraud and theft.
Disadvantages of Virtual Credit Cards
While the extra layer of security virtual credit cards provides is attractive, they are not without disadvantages, including the following:
Credit card issuers have been slow to offer temporary credit cards, with only two major credit card companies offering virtual credit card numbers: CapitalOne and Citi. What’s more, Bank of America recently discontinued ShopSafe, the company’s virtual credit card service.
Online or Phone Use Only
Currently, virtual credit cards only work online or over the phone. You can’t use them at gas stations, stores or any other business that uses payment terminals that require physical cards.
Returns Are More Complicated
Retailers often require that a refund be placed on the same account number that was provided to make the purchase. That could present a problem if your temporary card number has since expired, and you may have to accept store credit instead of the funds.
Merchant Verification Is More Difficult
Verifying your account information with a merchant can sometimes be difficult when you use a virtual credit card. As an example, if you reserve a hotel room using a temporary card number you could be in a bind when you arrive. That’s because many hotels require you to pay with the same card you used when you made the reservation.
Who Offers Virtual Credit Cards?
Here are some options to get a virtual credit card are as follows:
Capital One offers virtual credit card numbers through Eno, the company’s online assistant.
You’ll need to install Capital One Eno, a browser extension for Google Chrome, Microsoft Edge and Mozilla Firefox browsers, then shop online as usual. Once you are at the checkout page, click the button for One Eno and create a virtual credit card to use at that particular merchant.
Eno can also redirect you to Capital One’s website to manage your virtual account numbers.
Citi Virtual Account Numbers
You can start using Virtual Account Numbers from Citi by enrolling at the company’s website. Your monthly statement will include all purchases you make with your temporary number along with the Virtual Account Number used to make each purchase. You can also view the remaining balance for each account number.
What are Alternative Options for Virtual Credit Cards?
If your bank doesn’t offer virtual account numbers, you may be able to use other options to protect your credit card information when you shop online.
MaskMe is primarily a provider of temporary email addresses for privacy purposes. While the free version of MaskMe offers temporary email addresses to combat spammers, their Premium upgrade allows you to create virtual credit card numbers, even if your card issuer doesn’t support disposable account numbers.
Digital Payment Systems
Apple Pay doesn’t work as a virtual credit card, but it does achieve the same goal by allowing you to pay without disclosing your credit card number to a merchant. Take note that Apple requires the use of an iPhone or Apple Watch to confirm payments.
Visa Checkout, Masterpass and Amex Express Checkout are digital payment systems that don’t require you to enter your credit card information at an online retailer’s checkout page. Instead, enroll with any of these services and add your card information with them. Log in to the service when you are shopping online with participating merchants to complete the transaction.
The Bottom Line
In the age of data breaches, virtual credit cards can provide a buffer between your private credit card information and online merchants. And although you may be able to customize your virtual card number for a longer period for use, it’s wise to limit use for better protection against fraud or theft.
Using virtual credit cards online may help you protect your card information, but it doesn’t mean your security worries are over. It’s still important that you check your accounts online to make sure there are no fraudulent charges.
If you’re concerned about securing your private information, check out our tips to fight identity theft and keep fraudsters out of your online life.