Are Virtual Credit Cards Safe?

People around the world pay their bills, buy goods and services, and transfer money online. This has many advantages, but one major disadvantage has to do with security: millions fall victim to fraud and identity theft every year.

There are no magic bullets. Staying safe online requires vigilance, secure software, and a range of skills necessary to navigate the World Wide Web. But when it comes to online payments as such, virtual credit cards can provide an extra-thick layer of security.

What Are Virtual Credit Cards? How Do They Work?

Graphic illustration of a credit card on dark blue background

Virtual credit cards are essentially temporary digital cards designed for one-day, or even one-time, use. A virtual card is connected to your real credit card or bank account. With it, you get a randomly generated card number, expiration date and security code. Because of this, your real information is not visible to anyone, or shared with anyone.

To better understand how virtual credit cards work, let’s imagine a hypothetical scenario. You’ve logged into your favorite e-commerce platform, filled up your cart with various goods, put in your information, and you’re about to pay. But instead of putting in your credit card number, you generate a new virtual credit card and insert all the necessary information from it.

Several weeks later, you find out that this e-commerce platform was compromised by an unknown threat actor. The cybercriminal broke into the company’s systems, injected malicious code into the website, and harvested users’ information, including credit card numbers. But because you used a virtual credit card and not a real, physical card, your information and bank account are safe. The virtual credit card you used has already expired, so you can just move on without worrying about the breach.

This, in essence, is what virtual credit cards are all about. They hide your real information from threat actors and protect you from cybercrime. Obviously, they also provide more privacy than physical credit cards, which is just an added bonus.

How Do I Get a Virtual Credit Card?

Clearly, virtual credit cards are something everyone who cares about their security (and their hard-earned money) should consider. So, how do you go about getting one? The answer may be a bit of a let-down, but your best bet is to contact your bank and ask if they offer virtual credit cards. Many do nowadays.

However, if your bank or card issuer is unable to provide you with a virtual credit card for some reason, there is another service you could use called Privacy. It is a simple and easy-to-use online platform that generates virtual credit cards. Essentially, all you need to do is add a funding source, generate a card, and that’s it—you can begin using your virtual credit card immediately.

Of course, Privacy offers a lot more than that. The platform allows you to set spending limits, create an online wallet with several cards, set recurring payments (great for subscription services), track your spending, and more. Privacy also has a mobile app, and a browser extension, so you can use the service on pretty much any device.

Screenshots of the website

More importantly, Privacy is very secure. It is PCI-DSS compliant, which means it is held to the same standards as banks in the United States. All data center communications are protected by Internet Protocol Security (IPsec) with AES-256 encryption, while web traffic is secured by Transport Layer Security (TLS). Customers’ passwords are hashed, and their data stored on geographically distributed servers.

Privacy offers three different plans: Personal, Pro, and Teams. Personal is free, but you can’t create more than 12 virtual credit cards per month. With Pro, you can create up to 36 cards; and with Teams up to 60. These two plans cost $10 and $25 respectively, per month.

However, there is one major issue with Privacy: only US citizens or legal residents can use it, plus residents of Puerto Rico, Guam, the Virgin Islands, the Northern Mariana Islands, and American Samoa. The company says on its official website that it is working on making its services available worldwide, so make sure you keep your ear to the ground if you’re not based in the US but need a virtual credit card.

What Are the Downsides of Using Virtual Credit Cards?

Credit card illustration seen over a blurred photo of credit cards

One obvious disadvantage of virtual credit cards is the fact that you can’t use them in person. However, you can add some virtual credit cards to a secure and reliable mobile wallet, and pay that way when possible.

The main downside of using virtual credit cards, as opposed to physical ones, has to do with them being meant for one-time use, or one-day use. Besides, even if a virtual card is not meant for temporary use, you’d need to generate new ones quite frequently to ensure maximum safety. The problem with this is, if you pay for something online with your virtual credit card, but demand a refund when the goods don’t arrive or arrive damaged, there is no way of getting your money back if the card number has already expired.

Another possible disadvantage is this: sometimes you simply need to use the same card to pay for a service. For example, if you make a hotel reservation online with your virtual credit card, but don’t pay the full sum in advance, the hotel might ask you to pay for your room with the same card you used to book it—and you would not be able to do this if your virtual credit card has already expired.

Virtual Credit Cards Are Safer Than Physical Cards

Virtual credit cards are safe, easy to use, free (or at the very least affordable), and will strengthen your security and privacy. Most importantly, they will protect you from fraud, theft, and all sorts of cybercrime.

There is always a possibility you run into issues with not being able to get a refund or similar, but that is probably a compromise most would be willing to make. And until you get a virtual credit card, make sure you familiarize yourself with the most common online shopping security threats, and learn how to avoid them.

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