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What Are Virtual Credit Cards And What Can They Do For You?

Jenna Taubel

Jenna Taubel About The Author

Sep 18, 2018 7:56:00 AM

virtual credit card | digital wallets | first alliance credit union mn

With all the stories in today's news about security breaches and identity theft, you might wonder how in the world you can protect all your personal information and financial data. There is no 100% foolproof way to eliminate data theft, but you can minimize the chances of it happening with certain fraud monitoring and prevention services, as well as virtual credit cards. If you shop online frequently and your budgeting plan includes credit card security, Money Under 30 recommends considering virtual credit cards.

How Virtual Credit Cards Work

Virtual credit cards are services that work to disguise your real credit card number with a virtual one, with a false CVV number, and expiration date. The service generates those numbers for a one-time use with an online merchant, but the charges still go to your real credit card. But the advantage is that if the merchant stores the virtual credit card payment information in their database and a hacker gains access to it, it will not be able to be used since it was already used once. This is especially useful if you're buying merchandise from a new e-commerce website that may not have high-grade security.

Where You Can Get Virtual Credit Cards

There are some credit card banks like Bank of America and Capital One who have virtual credit card features offered as part of their services. But even if your credit card issuer doesn't have that feature, there are a few independent online payment security service companies out there who do offer them for small fees. Just make sure if you do go with an independent virtual card service that you check them to make sure they're legitimate and have a great reputation.

What Virtual Credit Cards Do Not Offer

Virtual credit cards are only able to be used online since there is no way to use the virtual data when your card is being swiped or inserted into the reader. In theory, though, it is a little like an EMV chip that is now common with most of today's credit cards since it creates unique information for each transaction. If you are concerned about credit card safety in brick and mortar stores or at ATMs, virtual payment systems like Android Pay can help.

In conclusion, virtual credit cards aren't a complete deterrent to fraud because an unscrupulous merchant could still get one bogus charge on the virtual card if they received its information before it expired. But they are great to have when you need to prevent your real information from floating around all over the web. Even if you did have to pay a small fee to use the virtual card service, that fee will be well worth minimizing the hassle of dealing with credit card fraud.

For more information on how a bank works with virtual credit cards, contact the professionals of this site!

We do our best to provide helpful information but we cannot guarantee the accuracy or completeness of the information presented in the article, under no circumstance does the information provided constitute legal advice. You are responsible for independently verifying the information if you intend to use it in any way. Additionally, the content is not intended to be reflective of First Alliance Credit Union’s products or services, for accurate and complete details about our product and service information you must speak to an advisor at First Alliance Credit Union.