Shop Safely Online: Use a Virtual Credit Card Number

Shop Safely Online: Use a Virtual Credit Card Number

A virtual credit card is a credit card number that is generated by your credit card issuer, on your behalf, for temporary use.

You don’t actually get a physical credit card with this number. You simply use the number for an online transaction and then it expires.

Some virtual numbers can be reused at the same retailer/merchant over again, and some are good for a month anywhere. Most virtual card services today are built into an Internet browser app so you can make numbers on the fly without even leaving the online store.

A virtual credit card number can increase your security online. Virtual credit card numbers protect your identity by cloaking your actual card number. They expire after a certain amount of time. This way thieves can’t steal your actual credit card information from online transactions.

Why Would You Need a Virtual Credit Card?

Most people don’t feel like they need to use this service. However, many credit card issuers provide them and encourage you to use them to cut down on the amount of credit card fraud. As you know, with a credit card, you’ll only be liable for up to $50 of bogus transactions. Therefore, most people don’t bother with using this service.

However, I’ve learned that if someone steals your credit card information, and then is able to match that up with your other personal information, you could experience lots of identity theft down the road. That’s a huge risk to take.

One use for these virtual numbers is to use them when you’re signing up for a free trial offer. Maybe you’re signing up for a trial membership of an online newspaper. It may be a small fee for just one month, but in case you forget to cancel, using a virtual card number can help protect you.

We often forget to cancel our trial memberships before they start charging us the higher regular fee. But by using a virtual card number, you know that the company can’t charge you after that initial transaction.

If you were to use a virtual credit card number on this site instead of your real number, you would never run the risk of being charged the continuing fee.

How to Find a Virtual Credit Card

Some of the primary card issuers with virtual credit card services are Capital One and Citi. Discover offers something similar called Digital Wallet. Bank of America is no longer providing this. And if you don’t bank at one of these places, be sure to check out Privacy.com.

Privacy.com: Virtual Credit Card Review

Using your true credit card number leaves you vulnerable to theft and the leaking of your most sensitive information.

Privacy.com is a free service that gives you a unique card number for each transaction, so you never need to worry about somebody lifting your actual card number. (If they get the number, it will be useless.)

It’s easy to set up. You can use their website or mobile app to generate virtual card numbers. They also have a browser plugin that will allow you to generate a new number when you are checking out of an online retailer.

When you set up your card, you can set spending limits on the basis of per charge, per month, or per year. You also choose if you want the virtual number to be a “single use” card or a “merchant card”.

Single-use cards expire two minutes after they are used. That way even if a thief gets ahold of your card number, they won’t have time to actually use it.

Merchant cards can be used over and over at the same merchant. Perfect for subscriptions as they make canceling recurring charges simple. You can simply turn off that card number and the company no longer has access to your card. Perfect for companies that are notoriously hard to cancel–like the gym!

Using a temporary card number can help protect you from online threats. Why not minimize the amount of personal information you provide to merchants? It’ll help you sleep easier at night.

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Alternatives to the Virtual Credit Card

There’s more than one way to shop safely online. In addition to the virtual credit card number, you can use an online payment service like PayPal or Google Pay to create an additional layer of protection. These systems may come with their own protection issues though, so make sure you understand how you’ll be protected when using them.

You could also shop with one of the free prepaid credit cards. Unlike a regular credit card, a prepaid card uses your own pre-loaded funds. Therefore, you always know how much is on the card and how much can be used if someone were to use it fraudulently.

Considering how frequently online credit card fraud and data breaches occur, it might be wise to consider using a virtual credit card whenever possible.

Have you ever used a virtual credit card number? How do you shop safely online?

Shop Safely Online: Use a Virtual Credit Card Number

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About Philip Taylor, CPA

Philip Taylor, aka "PT", is a CPA, blogger, podcaster, husband, and father of three. PT is also the founder and CEO of the personal finance industry conference and trade show, FinCon.

He created Part-Time Money® back in 2007 to share his advice on money, hold himself accountable (while paying off over $75k in debt), and to meet others passionate about moving toward financial independence.

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  1. use virtual all the time. love it. Citicards has it. would like to find another card that has it available.

  2. This service is really great. Just because I don’t think its really safe to use real credits card information on different site that are not trusted. So virtual credit card is great and let shop anywhere without revealing our credit card information

  3. I am representing a small community bank.
    Does someone know a company that would help us to develop this type of service for our customers?
    What I mean having our cardholders sign in to the bank’s network, and not a third party provider to get the Virtual Card number?

  4. Use Citi VAn for items like magazines sites, Vistaprint, or unfamilar vendors.
    Always set a small limit and 2 month expiration. Works well.

  5. This is the first time I have even heard of this service. It would figure that the banks offer this, but do not advertise it. I sometimes wonder if they have our interests in mind, or theirs.

  6. @Mike – Yeah, I hadn’t heard much about it either. You’d think they would promote it more since they bear the brunt of any fraudulent charges. I guess other safety measures take precedence.