BBB Tip: Virtual Credit Cards Provide Online Shoppers Extra Security



Data breaches are unfortunately commonplace, but virtual credit card services can give shoppers an added layer of protection. With the COVID-19 pandemic causing more people to shop online than ever before, it’s worth investigating this extra security measure. Here’s everything you need to know about virtual credit cards.

How Virtual Credit Cards Work

Virtual credit cards allow consumers to create uniquely generated card numbers, expiration dates, and security codes for online and over-the-phone purchases. These unique numbers can be generated for each individual purchase or used over a longer period of time. Other virtual credit card users set up a unique number for each vendor they use.

Depending on the issuer, virtual credit cards can be used through a browser extension, online account, a program you download to your PC, or an app. Purchases made with virtual credit cards don’t have any unusual effects on your credit score; they simply alter the numbers you use to pay.

Virtual credit cards give you extra protection when a company you’ve shopped with uncovers a data breach. Cyber thieves may get a hold of your purchase information, but it won’t do them much good since your real credit card information is not attached to any purchases you make with your virtual card. It’s also easy to deactivate the current number. This means, if a company you’ve shopped with experiences a data breach, you won’t need to cancel your card, wait for a new one, and then update all your automated payments with a new credit card number.

Getting the Most from Your Virtual Credit Card

If you are interested in using a virtual credit card, be sure to consider the following:

  • Continue to review your transactions regularly. While virtual credit cards offer extra protection from fraud, they don’t make you immune. Review your credit card statements regularly, and if you find any unusual charges, contact your credit card issuer immediately.
  • Set up spending limits. Most virtual credit cards allow you to set spending limits for each virtual card number or specific merchants. Not only will this help mitigate losses if a virtual number becomes compromised, it can also help you stick to your monthly budget!
  • Keep an eye on expiration dates. If your virtual credit card number can be used more than once, know when it expires or set the limit yourself. You can generate a new virtual credit card number when the old one expires.
  • Don’t use a virtual credit card to pay for long-term subscriptions. Since virtual credit cards have shorter expiration dates, they aren’t a good way to pay for subscription services. As soon as the expiration date passes, further transactions will be declined and your subscription could be canceled.
  • Think about returns. If you purchase an item online with your virtual credit card and then return it at a physical store, you may not be able to get a cash refund, since you won’t have a physical credit card to present. Make sure you don’t mind getting a gift card or store credit instead if you purchase something you are likely to return in person.

For More Information

To learn more about protecting your credit card information, see the article 8 Tips from BBB: What To Do After a Data Breach and BBB Tip: Credit Freezes and Fraud Alerts.

Information courtesy of the Better Business Bureau

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