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A virtual credit card is a temporary credit card number that you can use while shopping online. These disposable card numbers are designed to protect your actual account number from falling into the wrong hands.
Virtual credit cards can protect you from having your credit card information stolen in a data breach or through an unsecure connection. Here's what you need to know about virtual credit cards and how to use one.
How Do Virtual Credit Cards Work?
If your credit card issuer provides a virtual credit card feature, you can request one through your online account with the bank. When you do, you'll get a randomly generated card number, expiration date and security code that are tied to your actual account.
When you use the virtual credit card to check out online, the transaction will show up on your account statement as if you had used your regular card information.
Can Virtual Credit Cards Help Protect Your Identity?
Disposable card numbers can add an additional level of security in an age when retailer data breaches seem to be commonplace. If a hacker manages to get ahold of your virtual credit card information, you can simply cancel that virtual card without needing to close your entire account and get a new one.
In some cases, a virtual credit card may be designed for one use only, so if a fraudster steals the information in a data breach or through an unsecure internet connection, it'll no longer be valid.
Of course, if your credit card issuer doesn't give you the option to use a virtual credit card, that doesn't mean you're completely exposed. Thanks to the Fair Credit Billing Act, consumers are never liable for more than $50 in unauthorized charges if their credit card is lost or stolen—and many credit card issuers offer zero-liability fraud protection.
But even if you're not on the hook for fraudulent purchases, if your credit card is lost, stolen or otherwise compromised, you'll still need to go through the dispute process, cancel your card and have a new one sent to you. With a virtual credit card, you can avoid that whole process.
What Are the Drawbacks of Virtual Credit Cards?
Because virtual credit cards are designed for online and other card-not-present transactions, there are some situations in which using a virtual number could backfire.
If you have to return something, for instance, a retailer might require the refund be placed on the same account number that was used to make the purchase. If your disposable card number has already expired, you may be forced to get store credit instead.
You could also run into a snag if a merchant requires verification of your account information. For example, let's say you use a disposable card number to make an online reservation for a rental car or hotel room. When you show up, the company may require you to pay with the same card used to make the reservation. But since the virtual number is different from your actual card number, you could have trouble verifying they're tied to the same account.
Where Can You Get a Virtual Credit Card?
As of April 2019, only three major credit card issuers allowed cardholders to request a virtual credit card: Bank of America, Capital One and Citi.
Keep in mind, though, that the feature may not be available for all cards offered by those banks. Check with your issuer to find out if yours is eligible.
Bank of America
Bank of America's ShopSafe program allows customers to generate a temporary 16-digit account number with an expiration date and security code.
Users can set the number to expire up to one year in the future. ShopSafe also offers a recurring monthly payment feature. Bank of America customers do not have to register to use the free service.
You can create virtual credit cards using Capital One's Eno. The virtual assistant provides a browser extension to cardholders who use Google Chrome, Mozilla Firefox or Microsoft Edge.
After you install the extension, Eno will pop up during the checkout phase when you're shopping online with instructions to create a virtual card specifically for that merchant. Once you do so, you can complete your purchase.
Citi's Virtual Account Numbers feature simply generates a temporary account number you can use when shopping online or by mail order. Users must enroll in the program to begin using it.
Other Options for Protecting Your Identity Online
Whether or not your credit card issuer offers virtual credit cards, it's important to be proactive about preventing identity theft when you're shopping online.
For example, digital payment services such as Visa Checkout, Masterpass and Amex Express Checkout allow you to make purchases online without entering your card information. Just sign up for one of the services, add your card information, then log in when you're shopping with participating retailers to complete the transaction.
Also, consider using a virtual private network (VPN) when you're on a public Wi-Fi network. This service can prevent hackers from eavesdropping on your internet activity and any sensitive information you share.
Finally, consider using a credit monitoring service that will alert you if something is amiss, allowing you to spot fraud and stopping it before it gets worse.
Editorial Disclaimer: Opinions expressed here are author's alone, not those of any bank, credit card issuer or other company, and have not been reviewed, approved or otherwise endorsed by any of these entities. All information, including rates and fees, are accurate as of the date of publication.
This article was originally published on December 8, 2017, and has been updated.