What is a virtual credit card?
Virtual credit cards are online cards that are not physically issued by the credit card provider. It is usually a free service provided by the original card issuer to their customers who want to perform an online payment with the help of their credit cards. Virtual credit cards include a one-time-use credit card number created by the respective credit card provider.
Typically, virtual credit card numbers can be used only once, and may expire within a month if not used. This helps protect the customer from becoming a victim of online credit card fraud.
1. Replacing credit cards is a hassle
It will take time for the new card to arrive, and you’ll have to update your credit card number with any vendor that you’ve authorized to make recurring charges.
And if you’ve saved your credit card information on any websites to make shopping easy, you’ll have to update those as well.
2. You shop online with a debit card
The fraud risk is even worse for debit card users. With a credit card, if there are fraudulent charges, you can easily dispute the charge and not pay for it while the bank investigates.
However, with a debit card, the money has already left your account. While the bank is researching the fraudulent transaction, you could have payments to your mortgage, car loan, or other bills bounce because criminals drained your account.
3. You have a business credit card
Even though legal protection exists for consumer credit cards, banks do not always provide the same levels of protection for business credit cards.
For example, Visa’s website says, “Visa’s Zero Liability Policy does not apply to Visa corporate or Visa purchasing card or account transactions.” Mastercard has a similar rule, stating that “zero Liability does not apply to the following Mastercard payment cards: commercial cards, or unregistered prepaid cards, such as gift cards.”
If you’re shopping online or over the phone with a business credit card, using a virtual credit card number is an excellent way to limit your risk of fraud.
4.You don’t like unexpected charges
With virtual credit card numbers, you can set a specific maximum amount that the charges are approved for. This limits the potential for add-ons to increase the size of the transaction beyond what you are willing to pay.
And when you set the virtual credit number to expire by a certain date, you can be assured that there will not be any additional charges coming down the road.
5.Kids are going to be kids
Children are smarter than ever, and online transactions seem to be part of their DNA. My kids are only three and seven. But I know that they’ll soon be asking for my credit card to purchase something online.
A virtual card allows me to give them a temporary card number that is only good at a single merchant. By doing so, they won’t be able to continue shopping for other goodies or blowing my budget after making the purchase which I approved.
Should I use a virtual credit card?
You have several choices to protect your personal information when shopping online or over the phone. Virtual account numbers protect your credit card numbers and reduce the opportunity for fraudulent transactions.
Nothing is foolproof, but adding a layer of security can prevent unwanted purchases. It can also limit the damage if a hacker steals your information.
Enroll your credit cards now so that you’ll be ready to use a virtual credit card the next time you shop online.