What are virtual credit card numbers and how do they work? A complete guide

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Even the most savvy and confident online shoppers can feel nervous when entering their credit card information on a website to make an online purchase. You can do everything in your power to protect your identity and personal information while being hacked when a retailer experiences a data breach.

In 2021, some well-known retailers were victims of hackers, leading to data breaches for millions of Americans. The California DMV, CVS Health, Wegmans, Kroger, T-Mobile, Microsoft Exchange, Hobby Lobby, Facebook, Geico, FitBit and Apple are just a few of the companies that fell victim last year.

Buying online and hosting your data there is a convenience that most people are not ready to give up. Consider using virtual credit card numbers to thwart hackers and add a layer of security to your online life.

What is a virtual credit card number?

Virtual credit card numbers are a sequence of numbers issued by your credit card company that can be used instead of your real credit card number.

A virtual credit card number works like a chip credit card. It creates a one-time sequence of digits or a token while shopping at an online merchant instead of entering your physical credit card number on the website.

If the website ends up being hacked and the credit card numbers are exposed, the virtual credit card number cannot be traced back to you personally. This online shopping method can protect your identity and prevent scammers and other thieves from obtaining your real credit card number to make their own purchases on your credit.

Which credit card issuers offer virtual credit card numbers?

Several credit card issuers offer virtual credit card numbers to give their customers an extra layer of protection.

Capital One offers a virtual credit card number through Eno, its virtual assistant. You download the Eno browser extension and register your Capital One credit card through Eno. When you’re ready to pay, Eno creates a virtual credit card number you can pay with. Eno can also store virtual card numbers for reuse at the same merchant.

Also: How to protect your personal data online

If you are a Citi Card user, some Citi credit cards have a Virtual Account Number feature that you can activate in the Card Benefits section of your online account. Each purchase made will appear on your account status along with the virtual number used to help you track transactions.

Titanium Apple Card users can access their Apple Pay account to find their virtual credit card numbers. This is especially useful when making purchases for which Apple Pay is not yet an acceptable payment method.

Like Chase and Wells Fargo, other credit card issuers allow users to create virtual credit card numbers in their digital wallets. They can be used to make online purchases with Apple Pay, Google Pay and Samsung Pay.

American Express offers users the ability to get an instant card number on select credit cards, which can be loaded into your digital wallet for immediate use. You don’t have to wait for your physical card to be mailed to make your purchases.

If you are unsure if your card issuer offers a virtual credit card number option, it is best to ask them directly if this is an option for making secure payments.

Virtual credit cards vs digital wallets

What is the difference between virtual credit cards and digital wallets? A digital wallet is an application you can download that securely stores your debit and credit card information. It can be used as a contactless payment method both online and in person, provided the merchant has the correct hardware.

Like a chip credit card and a virtual credit card, a digital wallet provides a unique token or code to complete the transaction. Your credit card number and account information is hidden from the merchant and any potential hacker who can obtain data during a cyberattack.

Not all digital wallets work the same, whether you use one from your credit card issuer, Apple Pay, Google Pay, or another app.

Also: How can business owners protect their business against cybercrime?

Advantages of Virtual Credit Cards

  • Additional security: Online thieves cannot easily access your real account or credit card information with a virtual credit card number. This means that in the event of a breach, you likely won’t have to close your existing card, get a new one, and then reset your recurring transactions.

  • Convenience: Virtual credit card numbers can be created instantly, so you never have to wait if you make an impromptu purchase and want to protect your personal data. You can also set spending limits and expiration dates, which adds more flexibility to using virtual credit cards.

  • Can be used once or multiple times: While some virtual credit card numbers are intended for one-time use, others can be used repeatedly, such as the Capital One Assistant’s Eno extension.

  • Transactions are recorded on account statements: When you make an online purchase with a virtual credit card number, it appears on your account statement as a purchase made with the physical credit card, provided the two are linked.

Disadvantages of Virtual Credit Cards

  • Do not use in person: Although this may change in the future, for now virtual credit card numbers can only be used to make purchases online or over the phone. If you must have a physical card to make a purchase, a virtual credit card number is not an option.

  • May have issues with refunds: If you need to return an item for a refund, you may experience issues using a virtual card number. Some retailers will only revert to the original payment method, which may not work if the card number has since expired. And if you’re making a return in person and can’t provide the physical card that matches the number used, you may have to settle for store credit or make an exchange instead of a return. If your virtual credit card number is not linked to your credit card account, this can also happen.

  • Could complicate reservations: If you make online travel reservations using a virtual credit card number, it could make checking in for your hotel, flight, or rental car more difficult. If the company asks for your card to confirm the reservation when you check in, you may need to call your card issuer or your bank to verify the transaction, as the reservation company cannot access your account from a another way.

How to set up a virtual credit card?

The configuration of a virtual credit card may differ depending on the issuer. For the most part, you’ll log into your account line and go to your account settings or cardholder benefits section to request a virtual card number. You may need to download the issuers app or use it multiple times to access the card number.

How do virtual credit card numbers work?

Virtual credit card numbers work like a physical credit card number, except you can only use it online or for other cardless transactions, like a purchase over the phone. You create the virtual credit card number through your bank or credit card issuer and then use it instead of the physical card number when making a purchase.

How secure are virtual credit card numbers?

Virtual credit card numbers are safe when shopping because you don’t give a merchant your real credit card number. Although a virtual card number may be entered during a data breach, you won’t have to cancel your card, request a new one, and then reset your card information for recurring payments. Instead, you can simply report any fraudulent transactions and cancel the virtual card number if it’s still active. Also, virtual card numbers are one-time use unless you set them up to be used more than once.

Can I use a virtual card at the ATM?

You cannot use a virtual card at an ATM because the physical card must be read by the ATM to access your account.

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