Why you should consider a virtual credit card

Danny P. lives in London, England.

One evening, he was relaxing and watching TV when he received a text message from his bank.

The message said, “You will shortly receive an SMS to confirm recent activity on your card.”

Danny hadn’t made any unusual purchases that day so he thought the text might be a scam.

Thirty seconds later he received another message saying his credit card had been used about a minute before for $150.

Danny didn’t recognize the name of the retailer where the card was used.

So, he did an online search and realized the card was used at a supermarket in a small city in South America.

Danny was pretty sure he hadn’t ever been at the supermarket before.

He was still unsure if he wanted to respond to the text message.

So, Danny called his bank and they confirmed someone attempted to use his credit card over 4,500 miles away.

Thankfully, the bank was able to block the transaction from going through.

Danny immediately canceled his card and ordered a new one.

He couldn’t figure out how someone on the other side of the world was able to get ahold of his credit card number.

A hacker may have stolen it from a website where Danny used, then sold the information on a third-party website.

There are many “what if” scenarios where his card could have been compromised.

There are over 25 million online retailers around the world. Over 218 million Americans shop online.

That’s a lot of retailers who could have access to credit card information.

And this is why you should consider getting a virtual credit card.

What is a virtual credit card?:

A virtual credit card is a card that works with an existing account.

But the virtual card number is different from the physical card number.

When you use a virtual card, it randomly generates numbers to keep your actual card number secure.

The generated card number can be either temporary or permanent.

You can also put a spending limit on a virtual card to protect it from being fraudulently used.

How to use a virtual card:

Virtual cards use randomly generated numbers.

But to the merchant, the numbers appear as regular card numbers, and they won’t know there is a difference.

Virtual credit cards are different from Apple Pay or Google Pay because those two can be used as physical cards for purchases from a retail store.

Instead, a virtual card is primarily used for online purchases.

Benefits of a virtual card:

The biggest benefit of a virtual card is that it protects your actual card number.

Even if a hacker were able to obtain your virtual card number it wouldn’t mean they could access your actual account.

That’s because, depending on the specific virtual card, you can customize the length of how long the virtual number is good for.

And card number would likely expire before a hacker could use it.

Which means, if the card number is stolen, you don’t have to close the account or get a new card.

Also, transactions on your virtual card are posted to your actual account so you can monitor them like you would the real card number.

Drawbacks to virtual credit cards:

The main drawback to virtual credit cards is that they can basically only be used online.

You can’t walk into a store and use a virtual card number.

Also, it’s best to link the virtual card to a real card account.

If you don’t link it to an actual account, the virtual card will be limited in its uses.

For instance, it might not work if you need a refund.

Finally, if you have a virtual card you need to be careful when using it to book things like airline flights, hotel reservations, and car rentals.

Oftentimes, these places will ask for the credit card you used when you check in.

Since the card numbers won’t match up it could turn into more of a headache.

But, virtual cards are a great option when shopping online because they protect against hackers and having your card number stolen.

Many credit card companies offer options for virtual cards including American Express, Capital One, and Citi.

But don’t stop at just a virtual credit card.

Instead, you should develop a security plan and systems to keep you and your family’s personal and private information safe online.

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