A virtual credit card allows you to make purchases without revealing your actual credit card number. They can be temporary or permanent. No wonder: they’re mostly used for online purchases.
But should you worry about using a virtual credit card when shopping online? It really depends on your goals.
You should know that virtual card numbers have some disadvantages. Read on to learn how virtual credit cards work, their pros and cons, and how to get one.
What is a virtual credit card?
A virtual credit card number is essentially a credit card number that applies to your account, but is different from the number printed on your physical credit card.
In some cases (like Capital One’s Eno), this virtual number can be created by a local third party and changed with each purchase.
Using a virtual credit card protects your physical credit card information when shopping online or over the phone. Thieves have several ways to try to steal your personal information, but this ephemeral, randomly generated credit card number (called a “token”) is one way to keep that information safe when making remote purchases.
How to use a virtual credit card?
Virtual credit card numbers are associated with existing credit card accounts and are randomly generated to prevent your actual bank account information from being shared online. From the merchant’s perspective, these numbers look like a regular credit card number. Depending on the card issuer, cardholders can apply for a virtual card number online through their credit card account. Once virtual card numbers are generated, cardholders can instantly access those numbers and request spending caps and other customizations.
Why do consumers use virtual card numbers?
On the privacy front, virtual credit cards minimize the risk of fraud by adding an extra layer of enhanced protection to consumers and businesses completing online transactions. For individual consumers, virtual card numbers not only provide more privacy protection, but also protect private banking information and limit data tracking by advertisers. For businesses, virtual card numbers make it easier to manage cash flow while improving fraud protection, controlling vendor payments and securely expanding the purchasing power of employees and contractors.
Pros and cons of virtual credit cards
While virtual credit cards are convenient to use, there are some downsides to be aware of. Here are the main advantages and disadvantages you can expect when using a digital credit card:
Advantages of virtual credit cards
Your long-term payments and personal information are better protected. Even if a potential hacker obtains your details from a virtual credit card transaction, the account number will not be associated with your identity and may expire before they can exploit it.
The risk of your account being compromised is low. Your information is less likely to be stolen, which means you don’t have to close your credit card account, get a new card, or redo all your recurring payments.
Your transaction will be credited to your account. When your virtual card is linked to your physical credit card, the transaction is traceable and appears on your usual bank statement as a regular purchase.
Tokens can be temporary or permanent. Depending on your card provider, you may be able to adjust the amount of time the token remains open or set a spending limit. Both are useful features for shared credit card accounts or if you choose to reuse tokens for subscriptions (like Netflix or Audible).
Your refund will not be affected. Even with a one-time token, if associated with your credit card account, you can use a virtual credit card for refunds as usual.
Disadvantages of virtual credit cards
Virtual cards are limited to online and phone transactions. Currently, you can only use your virtual card when shopping online or over the phone.
The problem occurs when you don’t link a virtual card to your account. If your virtual account is not linked to your usual credit card account, you may encounter obstacles when requesting a refund. Since you don’t have an account for credit, your options may be limited to exchange or store credit.
Booking some services can get more complicated. There are potential issues with using virtual cards to book things like flights, rental cars, or hotels. Companies that offer these services often require a card for booking, so there may be extra effort at check-in, such as B. calling your bank.
Who should get a virtual credit card?
A virtual credit card is a great option for anyone shopping online and looking for extra protection from hackers. Virtual credit cards only work with existing credit cards, so you don’t have to worry about extra hard credit or credit requirements.
How are virtual card numbers different from mobile wallets and payment apps?
The most significant difference between virtual credit cards and mobile wallets such as Google Pay and Apple Pay is that mobile wallets are widely accepted in most places (online or in person), while virtual wallets can only be used for online purchases.
Second, virtual card numbers mask your account information by generating random numbers associated with your existing credit card accounts. The payment app or mobile wallet connects to the debit or credit card number you have linked to your mobile device, and the transaction is approved with a one-time verification token. This keeps your information private while you approve the transaction.
Both mobile wallets and virtual card numbers are secure, and one is not necessarily better than the other.
How to get a virtual credit card
Most major card issuers provide virtual card numbers for every credit card they offer, provided you take steps to activate them in your account.
Therefore, your existing credit cards, as well as all new cards, may already be available with virtual card numbers. Explore your online account or app, or contact customer service to learn how to access your card’s virtual number.
Best virtual credit card
If you’re considering using a virtual credit card number to protect your account, you should know which card issuers and credit cards offer this option. Consider how the following card issuers use virtual card numbers and provide them to customers.
- American Express Go: American Express offers a virtual card number program for businesses known as American Express Go.
- Eno by Capital One: Capital One offers a virtual credit card through its internal browser extension, Eno.
- Citibank’s Virtual Credit Card: Citi allows cardholders to register online and use their website to generate unique tokens on demand.
- Virtual J.P. Morgan Credit Card: Business owners with a J.P. can use a virtual credit card number. Morgan business cards are available.
- U.S. Virtual Credit Card Bank: Business owners with U.S. corporate cards can use a virtual credit card number. Bank available.
- Brex Business Card: The Brex Business Card is a Mastercard credit card for business owners that generates unlimited virtual credit cards.
- Divvy: Business owners with a Divvy credit card can use the Divvy virtual card.
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