What is a Virtual Credit Card? Everything You Need to Know

Trisha Miller  | 

The holidays are a time of being together with loved ones, festive spirits, and giving. As such, many of us are planning to knock out our holiday gifts by finding the best deals online and in stores. Of course, online shopping is a holiday favorite for those of us who are struggling to find time to find all of the gifts on our lists. However, millions of online transactions per day equates to a perfect time of year for credit card fraudsters to get to work. In an attempt to keep your credit card information safe, you may have heard of something called a virtual credit card, which may be able to keep your sensitive data safe. If you’re planning on doing some online shopping this season (or really any time of year) you should know how virtual credit cards can keep your money safe.

What is an anonymous virtual credit card?

A virtual credit card is a randomly generated credit card number that can be used for standard credit card purchases. It is often associated with online shopping for the purpose of keeping your card information safe from identity theft and hackers. With a substantial rise in credit card fraud and theft year over year, credit card companies are choosing to fight back. This idea was invented to protect customers and ensure that their personal information stays safe.

The customer is given complete control over the virtual number, which means you can choose how much money can be spent in association with the virtual credit card number. In addition, you also have control over how long the virtual number can be used. You may set an expiration date that voids the virtual number after a certain amount of days, weeks, or months. Many companies have a limit on how long you may be able to keep the number active. Often, the maximum time limit a virtual credit card may stay active is around a year.

How do I get a virtual credit card number?

In order to obtain a virtual credit card number, you must first be issued an actual credit card. Not all credit card companies offer virtual credit card numbers, so you’ll want to check with your credit card provider to see if they have this service.

It’s a good idea to try and plan ahead in order to keep your virtual number safe. For example, if you know that you’ll be making an online purchase (or several) during the holiday season, contact your bank ahead of time and let them know your plans. Tell them how much you’re planning to spend and when you would like the card number to expire.

Once you have requested the number, your card company or bank will contact you with the details of your virtual credit card number. You will need to keep this information in a safe place to avoid it from being compromised, just as you would your traditional credit card number. However, once you have the number in your possession, it’s ready to use.

Where can I use a virtual credit card?

Virtual credit card numbers technically can be used anywhere that a normal credit card purchase would be made. However, you don’t get a physical credit card with your virtual number, so it’s most convenient that a virtual credit card number be used for online purchases. Most storefront shops require a physical card that can be swiped, or a chip that can be read, in order to authenticate the purchase.

In the scenario above, we talked about holiday shopping, which is a great example of when to plan ahead if you’re going to shop online. Knowing what you plan to spend and/or most of the purchases that you plan to make can help you create an accurate shopping timeline and spending limit on your virtual credit card.

Although, as most of us know, sometimes it’s difficult to know exactly what you’ll buy or how much you will spend, but don’t worry! If you end up going above your originally desired limit, you can always request a new number. Most banks that generate virtual credit card numbers offer this as a complimentary service to their credit card members, which means you can do so an infinite number of times.

When you have multiple virtual credit card numbers being used, the card number that was used will often show on your individual purchases. This way, you can keep track of exactly that item was purchased, what the full amount of the purchase was, and which specific credit card number that was used in the purchase. You won’t have to worry about keeping track of several separate credit card numbers after they have expired, your bank will do that for you.

Are there any negatives to a virtual credit card?

The main downside to a virtual credit card, is the fact that it likely cannot be used in a physical store to make purchases. Although, another pain point is the fact that refunding a purchase could prove impossible with a virtual credit card. If you make a purchase and are unhappy with it, the money cannot be refunded to that number after it has expired. This could mean that you’ll have to settle for store credit instead of an actual refund. If you’re worried about running into issues regarding a product that needs to be returned, simply opt for your card number to stay active for a longer period of time that includes a window for a possible return.

However, the benefits of a virtual credit card number far outweigh these slight negative points. Using a virtual credit card gives you complete power over keeping your confidential information safe. Even if the card number is compromised for one reason or another, the virtual number cannot be traced back to your actual credit card number. Your bank can deactivate the card number at a moment’s notice and all of the funds can be placed back onto your card.

If the card has been fraudulently used, you may need to start an investigation with your bank. The good news is, your traditional credit card should not be restricted during this time. Purchases can be traced back to this exact virtual credit card number which is not linked to your standard credit card number. This means, you shouldn’t be cut off from other necessary transactions and payments while the investigation is ongoing.

All in all, as long as you are able to plan ahead and loosely predict your purchases, you should have no trouble with a virtual credit card. You have complete power over the option of a virtual credit card number. You will know how much can be spent and when it will expire. You can rest assured knowing that you credit card information is being kept safe and that your money will stay protected at all times.

For more information on credit cards, check out the Fiscal Tiger Credit Card Resource Center.

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Trisha is a writer and blogger from Boise, ID. She is a dedicated vegan, an avid gamer, cat lover, and amateur SFX artist.