Who Needs a Virtual Credit Card? | Credit Cards

If you’re concerned about protecting your credit card information while shopping online, a virtual credit card can add an extra layer of security. Not all credit card issuers offer the option of a virtual card, but if yours does, it could be worth exploring.

A virtual credit card is an alternate version of your physical credit card. It typically has a different set of 16 digits, expiration date and CVV, or card verification value, that you can use when shopping online. Even though it has a different number, it’s still connected to your credit card account, and any transactions made will appear on your statement.

“Regarding security, virtual credit cards are secure, and because they come with a card network logo (like Visa, Mastercard and Discover), they have the same consumer protections as a standard debit or credit card,” says David Shipper, strategic advisor in retail banking and payments at Datos Insights, a financial services research firm.

Virtual credit cards are appealing for their added layer of data protection, but in general, these are the two main benefits:

Protection when shopping with lesser-known online retailers. “If you’re buying from a new website that you think is a little sketchy, but you really want to buy the item, that’s a great time to use a virtual card,” says Matthew Goldman, founder and managing member of Totavi, a payment consulting firm. It would probably be overkill to use a virtual card to shop with reputable online retailers like Amazon, though, he adds. 

That said, virtual cards can make things easier if something goes wrong. If you made a purchase with a virtual card and the merchant later got hacked, exposing your card number, you don’t have to worry about replacing it, says Goldman. “You don’t have to change that number everywhere,” he adds. “You just can kind of turn off that virtual card.”

To manage free trials and subscriptions. “Think about how many times you’ve signed up for a trial offer and forgotten to cancel your trial or subscription until it was too late,” says Shipper. “Virtual cards can be active for one purchase or for a limited time, so you can use them for the trial, but they won’t work when the trial ends.” So you don’t have to worry about remembering to cancel since the purchase will be automatically declined.

What every virtual credit card has in common is its different number from the physical card, while still linked to the main account. But there could be slight variations as to how they work depending on the issuer.

Multiuse virtual cards. This is when you are able to generate a virtual card number that can be used over and over just as you would with your physical card number.
Single-use virtual cards. Some issuers may give you the option to request a single-use virtual card number that will only work for one transaction. 
Customizable virtual cards. In some cases, you may be able to set parameters for the virtual card, such as allowing it to only be used within a certain time frame, up to a certain dollar amount, or for a specific merchant or spending category.

Virtual cards have been around for over 20 years, says Goldman. For instance, Discover had a virtual card platform as far back as 2000. As technology evolved, some early adopters, like Discover, did away with their virtual card capabilities. However, as consumer concerns about online fraud have grown in recent years, other issuers began launching their own virtual credit card services. Here are the most notable ones:

Capital One has a feature called Eno, which is a virtual assistant for cardholders. One of its main tools is virtual card numbers. “It’s probably one of the most popular and well-developed options,” says Shipper. “Capital One kind of led there.”

If you’re a Capital One cardholder, you can create virtual cards from any online checkout page so you can pay without your physical card.

Citi also offers virtual account numbers for some of its cards, but not all of them. If you have an eligible card, you’ll have the option to enroll or request a virtual account number via your online account. You can then use the number to make online purchases. Your monthly statement will note which transactions were made with the virtual card number.

American Express offers virtual card numbers as well, but they can only be used when shopping on the Google Chrome browser on your desktop or from an Android mobile device. You have to save your card information within a Google account in order to enroll. Once enrollment is completed, you can use your AmEx virtual card to shop.

If you get an Apple Card, you will be issued a physical card as well as a virtual card number. You can access the virtual number in your Wallet app. Apple does something unique, however, says Goldman. “The physical card doesn’t have a card number on it,” he says, though he notes that there is a number encoded. “And I think we’ll see more of that from banks, because then they don’t have to reissue the plastic if your number is stolen.”

Apple also has an Advanced Fraud Protection feature in which you can request that just the CVV changes periodically. It creates an extra security layer without having to keep track of an entirely new card number.

The Brex card, which is for business owners, issues one physical card and one virtual card number for each employee on an account.

Another business card using virtual credit cards is Ramp. The main reason is to help business owners manage expenses by creating virtual cards for various needs from a one-off transaction, for specific merchants or with set dollar amounts.

For most of the issuers that offer virtual card numbers, this feature will be built into the card’s app and/or your online account. Capital One takes it a step further by offering the Eno browser extension that lets you generate virtual card numbers when you’re shopping online.

To set up via your card app or online account, follow the prompts to generate your virtual credit card number. Depending on the issuer, you may be asked to set rules regarding how the virtual card can be used – in some cases, the card number might only be good for one transaction.

“A lot more issuers are doing what’s called digital-first issuing” says Goldman. “It’s when you get a new card and you can add that card instantly to your mobile wallet or use a number online as soon as you get approved, even though it can take seven to 14 days for your physical card to show up,” says Goldman.

In some cases, the instant card number you are given will match the physical card that is on its way to you. If that’s the case, the instant-use card isn’t really a virtual credit card. But in other cases, you may get a temporary number to use until your plastic arrives. In that case, it can be considered a virtual credit card.

“Technically, any version of a card that’s not the physical plastic in your hand is a virtual card,” says Goldman. That would include Apple Pay or Google Pay since they generate a different card number than what’s on your physical payment method. “That’s why sometimes if you tap your phone to pay at a physical store and you look at the receipt, it shows the last four digits on the receipt that are different from what you have on your physical card in your hand,” he says.

There is one main difference, though – a mobile wallet is used for in-store purchasing, while a virtual credit card is primarily used for online shopping.

“I think we’re going to see a lot more banks roll this out,” says Goldman, noting that Visa and MasterCard have both recently announced virtual card subscription management capabilities for their bank clients.

Until then, if you don’t have access to a virtual credit card, the best way to protect yourself when shopping online is to choose reputable retailers and monitor your card accounts and credit reports regularly. You could also explore some of the third-party services that can generate a virtual card for you, including Privacy.com and ScribeUp (which uses virtual cards for subscription management).

Otherwise, don’t stress too much. No matter which type of credit card you use – physical or virtual – you’ll generally be protected by the zero-dollar liability guarantee that big networks and banks provide in cases of fraudulent credit card charges.