If you ever worry about handing over your credit card number when you’re shopping online, there’s a security option you might not know about: virtual credit cards.
The introduction of chip credit cards has made our financial information a little more secure. But here’s the flip side: Since chip cards decreased thieves’ ability to clone credit cards, their attention has been more focused on online hacking.
Here’s a partial list of retailers’ websites that have been hacked since January 2018: Orbitz, Best Buy, Delta Air Lines, Panera Bread and Under Amour, which affected 150 million users of its MyFitnessPal app.
There’s a world of virtual credit cards out there that can add another layer of security to your online endeavors. Read on for a quick look at what you need to know about virtual credit cards.
How Virtual Credit Cards Work
As the name suggests, this isn’t a physical card that you hold in your hand. It’s actually a randomly generated credit card number that changes every time your real credit card account is used for a purchase.
[Read: The Best Travel Rewards Credit Cards of 2018.]
A virtual credit card works kind of like chip credit cards. With chip credit cards, the merchant gets a single-use number, or token, which changes every time your chip card is used.
If a fraudster got the account number from a chip card and tried to clone it, it wouldn’t work because the unique code is only good for that single purchase. With virtual credit cards, temporary account numbers are used, so similarly, hackers wouldn’t be able to use those virtual account numbers for purchases.
Bottom line? If the merchant’s website gets hacked, your virtual credit card account number is useless to fraudsters. So, this gives you a little more security when it comes to using your credit card online.
Credit Card Issuers Who Offer Virtual Credit Cards
It’s not a new concept, but it’s never gotten a lot of attention. Bank of America‘s version is called ShopSafe. You shop the way you normally do, and when you’re ready to pay a vendor, you sign into your online account. A 16-digit virtual number and a security code will be generated. You can set up spending limits and an expiration date (up to one year), which makes it easy to use for a recurring payment. Again, your online retailer never sees your actual credit card number.
Capital One calls its feature an “intelligent assistant.” You can use virtual credit cards via Eno. Cardholders must go through their online profile to access Eno. You get a virtual number via Eno, and the website involved never gets your actual number. But again, it’s all connected to your credit card account.
Citi offers virtual credit card numbers, but only on a select number of credit cards. You can sign into your credit card account to find out if your card is included in this program.
Other Online Security Options
If your credit card issuer doesn’t offer a virtual credit card option, then you can consider extra security options offered by payment processors Visa and Mastercard. This is a bit different, but it does give you a little more security against fraud.
[Read: The Best Balance Transfer Credit Cards of 2018.]
If you have a Visa card, check out Verified by Visa. If you have a Mastercard, you can take a look at Mastercard SecureCode.
I’ve actually used Verified by Visa and found it easy to use. My issuer didn’t offer a virtual credit card, so I added security through Visa’s service.
Another option is Entropay, a U.K.-based fintech company that lets you set up disposable prepaid virtual cards. It’s more like a prepaid debit card than a credit card, so even if you have bad credit, you might qualify. There’s a 1 percent fee when you add funds to your account. I recommend reading the fine print carefully so you are aware of any other fees.
Issues to Consider
Depending on the service you use, it can be difficult to return a purchase to the vendor. Most merchants want to reimburse you via the same card number that you used for the purchase.
Also remember that there are different versions of virtual credit cards, and they operate a little differently. So be sure you understand how your credit card issuer’s virtual credit card service works.
Don’t Get Too Comfortable
Even if you use virtual credit cards online, that doesn’t mean you have foolproof security. You need to remain vigilant about checking your accounts online to make sure there are no fraudulent purchases.
I even check my credit card and checking accounts when I’m on vacation. A few years ago, I discovered someone had used my American Express card and spent $1,100 on hotels and restaurants. I called my issuer, and my account was quickly frozen and I got a new account number. My issuer offered zero liability, so I was lucky that this got resolved so fast.
[Read: The Best Cash Back Credit Cards of 2018.]
Aside from checking your online accounts, don’t forget to review your free annual credit reports, too. If a fraudster opens up a new credit card account in your name, you won’t see that when you check your online accounts. But it will show up on your credit reports.
A multilayered approach to protect your credit card information takes a bit of effort to set up, but the added security might help you attain a little more peace of mind.
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Virtual Credit Cards Explained originally appeared on usnews.com
