Virtual credit cards allow you to make purchases without revealing your real credit card number. They can be either temporary or permanent. This is not surprising: they are mainly intended for online purchases.
But should you be concerned about a virtual credit card that you use to make online purchases? That depends entirely on your objectives.
You should know that virtual card numbers also have some disadvantages. Read on to find out how virtual credit cards work, what their advantages and disadvantages are 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 on your physical credit card.
In some cases (such as at Capital One’s Eno), this virtual number can be created on the spot by a third party and changed with each purchase.
With a virtual credit card, your physical credit card details are safe when you shop on the Internet or by phone. Thieves can try to steal your personal data in a number of ways, but this ephemeral, randomised credit card number – known as a ‘token’ – is a way of protecting this information when you shop remotely.
Advantages and disadvantages of virtual credit cards
While using virtual credit cards can be convenient, there are also some disadvantages to consider. Here are the main advantages and disadvantages you can expect from using a digital credit card:
Advantages of virtual credit cards
- Your long-term payment and personal data are better protected. Even if a potential hacker obtains your data from a virtual credit card transaction, the account number is not associated with your identity and probably expires before they can take advantage of it.
- The risk of your account being compromised is low. Your data is unlikely to be stolen, which means you don’t need to close your credit card account, apply for a new card or make all your recurring payments again.
- Your transactions are recorded on your account. If your virtual card is linked to your physical credit card, the transactions are traceable and appear on your account statement as normal purchases.
- Tokens can be temporary or permanent. Depending on the card provider, you can define how long your token stays open or set a spending limit. Both of these features are useful for shared credit card accounts or if you want to use a token repeatedly for a subscription such as Netflix or Audible.
- Your refunds will not be affected. Even with a token used only once, refunds with a virtual credit card work as normal if it is linked to your credit card account.
Disadvantages of virtual credit cards
- Virtual cards are limited to online and telephone transactions. At the moment, you can only use virtual cards to make purchases online or by phone.
- Problems arise when you do not link your virtual card to your account. If your virtual account is not linked to your regular credit card account, you may encounter obstacles when paying back. As you do not have an account to which you can credit back, your options may be limited to an exchange or in-store credit.
- Booking some services may be more complicated. Problems can arise if you use an e-card to book flights, rental cars or hotels. Often the providers of these services require the card used for the booking, which means extra steps when checking in, such as a call to your bank.
How to get a virtual credit card
Most major issuers offer virtual card numbers for all the credit cards they offer, provided you take steps to set them up on your account.
So virtual card numbers may already be available for your existing credit cards as well as for new cards. Check your online account or app, or contact customer services to find out how to access a virtual number for your card.
The best virtual credit cards
If you are considering using virtual credit card numbers to protect your account, you need to know which card issuers and credit cards offer this option. Find out how the following card issuers use virtual card numbers and make them available to customers.
American Express virtual credit card
When you apply for an American Express credit card, you may receive a card number immediately. According to American Express, you can add this card number to a mobile wallet such as Apple Pay, Samsung Pay or Google Pay. You can then use your mobile wallet to make online purchases while waiting for your physical credit card to be sent.
American Express also offers virtual credit card numbers when you use American Express Checkout. This tool allows you to make purchases on the websites and applications of various merchants and then pay for your purchases with a virtual card number, which is temporary but linked to your account.
Finally, American Express offers a virtual card number programme for businesses, known as American Express Go. This program allows you to create virtual card numbers for business accounts, which can improve payment security for contractors, freelancers and other members of your team.
Capital One Virtual Credit Card
Capital One offers virtual credit cards through its own browser extension, Eno. Capital One Eno is compatible with most browsers and allows you to assign a nickname to your virtual cards so you can easily decide which number to use for recurring payments such as invoices and subscription services.
This feature is also useful when you want to close an open virtual account. You cannot set your own spending limit via Eno, but Capital One limits your virtual credit card spending with the same credit limit as your regular account. You must have a Capital One credit card to use Eno, but all Capital One credit cards are compatible.
Citi virtual credit card
Citi offers cardholders the ability to register online and generate a unique token via its website if required. It even provides cardholders with a web-based tool (or a downloadable version for PCs) that allows them to obtain their unique token if needed.
Fortunately, Citi applies this feature to most of its credit cards, including popular options like the Citi Premier® and Citi Prestige® cards.
Paying with the click of a mouse
The four major credit card issuers – Visa, Mastercard, American Express and Discover – have teamed up to offer Click to Pay, a payment option that lets you make online purchases without having to enter your card number. Click to Pay uses virtual card number technology and does not share your real credit card number with merchants, reducing time spent at the checkout.
Paying with Click to Pay is similar to paying with PayPal: not all merchants offer this option. At the checkout, look for the Click to Pay symbol, which looks like two arrows pointing to the right.
Mobile wallets: a personal alternative
If you are looking for one of the most secure ways to pay for your purchases in person, you may also want to consider using a mobile wallet for each purchase.
Note that mobile wallets such as Google Pay or Apple Pay do not store your credit card details and instead create a unique token for each purchase. This makes your purchases much more secure, as your credit card number and other sensitive information is never disclosed. In addition, you can pay with contactless withdrawal.
While you can’t directly access a Chase or Bank of America virtual credit card, you can use a digital wallet to pay with credit cards from Chase, Bank of America, Wells Fargo, Discover and others.
This way, you can protect your credit card data while making payments easily and enjoying all the benefits of paying with your credit card, including rewards.
The quintessence
Virtual credit cards can hide your real credit card number to protect sensitive account details. Depending on the card issuer, the use of virtual card numbers can even be automatic, without you having to do anything.
However, keep in mind that using a traditional credit card to make purchases is not inherently risky, whether you shop in person or online. This is because credit cards generally offer no liability for fraud, so you won’t have to pay, one way or another, for purchases you didn’t make.
