9 Things You Should Know About Virtual Credit Cards in 2020

Posted by Eren Duarte on July 8th, 2020

When you make a purchase from a big online merchant like Amazon, you can feel pretty confident that the company isn't going to abuse your card number. But when the merchant is very new or has a tiny online presence, that purchase comes with a certain risk.

The merchant has your billing address as well as your card number, expiration date, and security code. That's everything an unscrupulous merchant needs to charge a Caribbean vacation on your card. You can use DebitCardGenerator.com for testing Purposes.

Yes, it's true that you're not liable for unauthorized charges, but until you get the charges reversed your account may not have enough credit for other, valid purchases. By paying with a virtual credit card number, you can shop safely even when the merchant is iffy.

What Is a Virtual Credit Card? A virtual credit card number is a randomly-generated card number associated with your actual credit card. Depending on the issuer, you may be able to set a maximum charge for the virtual number, further protecting your transaction.

typically you can set it to expire in anywhere up to a year from its creation date. To the online merchant, it looks no different from any other credit card. The charges appear on your regular bill, but the merchant doesn't have your actual credit card number.


Things You Should Know About Virtual Credit Cards


1. You Must Have an Existing Account to Use a Virtual Credit Card

You can use virtual credit card numbers for online shopping or paying bills online. The virtual card numbers are linked to your existing credit card, so the charges appear on your regular monthly statement. At the checkout, the merchant receives the virtual card number, rather than your actual card number.

2. You Can Install a VCC on Your Computer or Phone

To use a VCC, you must install software that generates random credit card numbers every time you request one. Some providers have a mobile app as well, which integrates with your phone’s wallet and allows you to use virtual card numbers when you use your phone to pay.

3. You Can Use a Virtual Credit Card for Monthly Payments

Every temporary credit card number is limited to a single vendor. Because the number can be used repeatedly by that one vendor, a VCC is ideal for recurring payments. Each number is valid for a year, so you’ll need to update your account with a new card number annually. When you set up recurring payments with your virtual credit card, set the limit high enough to cover all of your payments for a year. If the limit is reached, you’ll have to update your credit card information at the vendor with a new virtual card number.

4. You Can Set Limits for Different Merchants

Each temporary number generated for you can be set with a maximum limit for a particular vendor. Where your security is concerned, setting dollar limits for each virtual number decreases fraud potential and creates a boundary for loss. You can create accounts with online stores and use that account similar to the way you’d use a gift card; the preset limit serves as your maximum value available with that vendor. When the limit is reached, the virtual credit card associated with the vendor will no longer be usable.

5. Virtual Credit Cards Are Only Available From Select Issuers

Check with your credit card issuer to see if it offers a virtual credit card. If your particular card doesn’t allow for this feature, the bank that issued your card might offer to switch you to one that does, if it offers it. For example, Bank of America’s ShopSafe service is the company’s virtual credit card offering. It’s designed for account holders with either a Visa or Mastercard, who also use online banking. Citi offers virtual credit card numbers for some — but not all — of its credit cards.

6. You Can Use a Third-Party Virtual Credit Card

Entropay allows users to create virtual credit card numbers instantly, making it a good option for consumers whose credit card is from another issuer or who want to use a prepaid card. The transactions you perform with Entropay virtual cards don’t appear on your billing statement. The drawback is that your bill will show a charge from Entropay, not the merchant, which might make tracking your spending more difficult.

Another option, Final, issues Visa cards that allow you to generate virtual numbers for use online or with the wallet on your phone. For those who like to go cashless, Final generates a VCC number on the fly so you can pay with your smartphone. You also get 1 percent cash back on Final’s Visa card.

7. Virtual Credit Cards Only Work Online

Virtual cards won’t protect you from credit card skimming and other credit card fraud that occurs at the point of sale. You can only use an instant virtual credit card number when shopping or paying bills online, or when using a mobile app to make purchases using your phone’s wallet.

8. You Still Need to Monitor Your Statements and Credit Score

Hackers and other criminals are constantly looking for ways to get around security measures. Virtual credit cards are a step in the right direction, but you still need to be vigilant. No security method is 100 percent foolproof. It’s still important to carefully examine your monthly statements and keep your credit card secure. The good news is that using a temporary credit card number will allow you to pinpoint where fraudulent activity took place if it ever happens.

9. You’ll Likely Have More Access to VCCs in the Future

The virtual credit card industry is still in its early stages. Today, some card issuers have decided not to issue virtual credit cards or have canceled programs they previously had in place. One of the early adopters of the virtual credit card, Paypal has since discontinued its offering. Paypal is confident that its existing fraud protections are sufficient to prevent unauthorized use of its credit cards. But as the technology matures, it’s likely that more issuers will offer virtual, temporary credit card options.

Eren Duarte

About the Author

Eren Duarte
Joined: July 6th, 2020
Articles Posted: 1

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