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What Are Virtual Credit Card Numbers and How Can They Protect You?
Published or updated April 13, 2013 by Glen Craig
There’s no shortage of hackers in today’s cyberworld and this has many people concerned about security when shopping online. Are you looking for an option that may help alleviate the fear of giving out credit card numbers?
Then having a virtual credit card number may just be what you’re looking for.
What it is basically, is the credit company gives you a random, disposable credit card number that you use instead of your regular credit card account number.  This way, the card number can’t be stolen and used somewhere else since it’s only good for the one purchase (usually the case).
These credit card numbers offer a layer of protection. Virtual credit card numbers are not new, in fact many major banks and credit institutions have offered a version of this for quite some time already.  Another term for these is a single use credit card.  Now not all banks offer these and there are some downsides, but these do help provide extra security while online shopping.
How do Virtual Credit Card Numbers Work?
A virtual credit card number adds an extra layer of protection to help prevent online fraud.
If your current credit card offers this service then all you need to do is log into your account and follow the instructions to generate a new virtual credit card number every time you go online to shop.
This may require you to download some software from the credit card company that will generate your virtual credit card number.
Basically what happens is that you get a virtual 16 digit card number as well as a three digit verification code; it is these that you use in lieu of your bank account or other credit card number.
When you make a purchase, you use the newly generated number instead of your real account number and these purchases will show up on your statement as per usual.
There may be some minor variances depending on the issuer but bottom line, they are all designed to add in a layer of protection.  Some virtual credit card numbers are one-time use only, others have an expiration date.
The best thing about a virtual credit card number is that the user can usually set the credit limit, when it expires and what website to use it on.  Basically this renders the number useless to thieves.
Individuals with bad credit can also use this service as it works similar to a prepaid card.  Good credit is not a requirement and no credit checks are necessary.
Where there is a pro there is generally a con sitting close by.  As always, nothing is 100 percent foolproof.  Some users of this service have noticed that virtual credit card transactions have gone through even if they exceeded their pre-set limit and in some cases, after the expiration date.
For individuals who are not diligent with checking their statements as soon as they arrive this could spell trouble.  Customers have only a limited time period in which they can dispute charges on their statement – after that, they are fully responsible to make payment.
Also, you can’t use a virtual credit card to make a purchase where you may have to show your credit card as proof, such as ordering an item online and picking up at the store.  Another example would be ordering event tickets where you would show your card to prove your purchase.  In these cases your virtual card number won’t match your actual card.
The Choice is Yours
When shopping at a website that states it is SSL secured, you’ll have verification of this by looking at the URL.  If there is only http in the address – then do not shop.  The URL must appear with https in order to be secure.
If you are a person who wants the added security when online shopping, then virtual credit card numbers may be ideal for you.
Have you used virtual credit card numbers?  How was the experience?
Filed Under: Credit Cards Tagged With: virtual credit card numbers
Glen Craig is married and the father to four children that he spends the day chasing as a stay-at-home-dad. He took an interest in personal finance when he realized most of his paycheck was going toward credit card bills. Since then he's eliminated his credit card debt and started on a journey towards financial freedom.
November 1, 2011 at 11:16 am
I use them when I make online purchases from sites I haven’t shopped with before. Once I see that they’re legit I don’t typically bother.
November 6, 2011 at 9:48 pm
That seems like a good use.
November 1, 2011 at 6:26 pm
My business always needs to make payments on the go. I started using this mobile payments app that is great! It’s called CSI globalVCard and it allows me to generate one time use MasterCard numbers to make payments. It’s easy to use and really secure!
November 2, 2011 at 12:37 pm
Dumb idea. Every card has zero liability on anything you didn’t charge. Look at your bill, dispute anything you didn’t charge. Who cares if people steal your cards, I certainly don’t.
November 8, 2011 at 1:45 pm
I like to use them for sites that force you to sign up for automatic renewals. If you forget to cancel the auto renewal the one time use number will bounce and they will send you an email saying your credit card has expired. If you want renew just give them another one time use number.
GoDaddy for example after sending me several emails warning me that a couple of my domain registrations were expiring, tried to renew with the one time use number without any authorization from me. I could have probably gotten the money back but it would have been a hassle.
A Little About Me
I'm Glen Craig - I used to live paycheck-to-paycheck, drowning in credit card debt. I turned that all around and now I build wealth rather than debt.
My goal is to make personal finance easy for you.
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