Credit Card Basics

What Is a Virtual Credit Card?

A virtual credit card, sometimes known as a disposable credit card, is a randomly-generated, temporary credit card number that you can use while shopping online. In some cases, the number can also be linked to a maximum charge amount designated by the cardholder.

These disposable card numbers are designed to protect your actual account number from falling into the wrong hands. For example, if there is data breach at a retailer where you shop, your real account is protected: If a merchant only has your disposable card number, then it's more difficult for potential fraudsters to access your credit card account to make unauthorized purchases.

Where Do I Get a Virtual Card Number?

Your credit card issuer may offer the service as a feature on your account. Both Bank of America and Citi give their customers the option to generate temporary account numbers to keep their data safe.

Bank of America's program, ShopSafe, 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.

Citi's Virtual Account Numbers simply generates a temporary account number for when you're shopping online, though the service is not available on all of the bank's credit cards. Users must enroll in the program to begin using it.

There are also a number of independent startups offering similar tools for consumers. One such company is Final, which offers users with "good to excellent credit backgrounds" a physical Visa credit card, along with virtual card numbers and merchant-locked cards designed for recurring purchases and subscriptions. The card offers 1% back on all purchases, carries a variable interest rate and does not charge an annual fee.

Another startup called Privacy works with consumer checking accounts instead of credit cards. Users simply link their checking account with the service to generate virtual card numbers through the Privacy mobile app or browser extension. Token is another free tool for consumers that can be linked to other bank accounts, debit cards or credit cards. The company's tagline is "disguise your credit card," which is what it allows users to do through its mobile app.

Do I Need To Use a Virtual or Disposable Credit Card Number to Protect My Identity?

Disposable card numbers can add an additional level of security in an age when retailer data breaches seem to be commonplace. But it's important to remember that consumers are already well protected against fraudulent credit card charges.

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 if you report the card as missing before a thief has a chance to use it, you're not on the hook for anything.

"At the end of the day, the consumer is still protected"—even if you don't have a virtual card number, says Cherian Abraham, a global consultant at Experian specializing in payments, identity and fraud. "But virtual cards may make sense in specific cases—like if you want to give your child a card number that they can only use with certain merchants or up to a certain amount."

Abraham adds that some card issuers have actually offered similar services in the past but have discontinued them because they've implemented other security measures—and many consumers don't worry because they know they face limited liability if their card number is stolen. In fact, Discover Card used to offer a "secure online account numbers program" but ended it when they implemented more stringent fraud detection and card authentication systems to their products.

Stil, it's important to remember you will likely spend time on the dispute and fraud resolution process if your credit card number is stolen. That could be avoided by using virtual card numbers. Debit card users, however, may benefit from disposable card numbers more than credit card users, because the laws around ATM and debit cards are not as consumer friendly.

Your liability will depend on when you report your debit card as missing or compromised—and if you don't do it in time, you could be liable for all the cash withdrawn from your bank account. What's more, it's harder to recover money that was actually in your account and could take a lot of time. (See also: The One Big Difference Between Debit and Credit Cards)

What Are the Drawbacks of Using a Disposable Card Number?

There are some situations in which using a virtual number could backfire. If you have to return something, for example, a retailer might require the refund be placed on the same account number that was used to make a purchase. If your disposable card number has already expired, you may be forced to get store credit instead.

If a merchant requires verification of your account information, you could run into snags as well. Say you used a disposable card number to make an online reservation for a rental car or hotel room. The company may require users to pay with the same card used to make the reservation—but if the balance on the virtual card number was already used, you could encounter hassles in verifying that your actual card is the same account as the virtual card number.

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.
Sign up for helpful tips, special offers and more!
You're signed up!
Our system is undergoing maintenance and will be available again soon.