Are Virtual Credit Cards Better Than Physical Cards?

Posted by Kermil J. Fogarth

June 30, 2009

by Kermil J. Fogarth

Having recently received the credit card bill for a card that has not been activated since I received it several months ago, I was surprised to find charges on the bill. Somehow I managed to use this unactivated card to sign up for a monthly MLM deal, purchase travel from hotwire and a train ticket as well. As I said, this card has been in my wallet with the little sticker to call this number from my home phone to activate it, for over seven months! But the charges didn’t start until November. How could this have been prevented?

Throw away card numbers - virtual card numbers - can be of some use when shopping online but I doubt they would have prevented what happened to me. In my case, the thief had somehow determined my name and correct card information. If you want to use virtual card numbers for online shopping protection that is fine, just don’t be lulled into a false sense of security. They wouldn’t have protected me since I wasn’t even using the card to make physical purchases.

Just like using a disposable camera instead of your expensive camera while you are traveling to protect from loss or damage, you can use a virtual card to prevent loss when purchasing online. With a virtual credit card number, the number is discarded after one use.

As credit card fraud is so widespread we are no longer surprised by it which means the card companies are looking for some method to deal with their costs. This means they must do so without inconveniencing the ability of the consumer to make purchases online and in person while at the same time protecting vital information. Many would say that the use of virtual credit cards may well be the solution to the problem.

The use of virtual card numbers for online purchases work the same way as a normal card number except they are only valid for a short time period. These numbers are issued as a short term replacement of the actual card number and are only valid for a short period of time. True card information is not sent to the vendor and these numbers can be single use or they may be used for multiple purchases over a short time period before it is no longer valid.

The objective here is to protect the real number from those who would use your card for their purposes thereby damaging your credit. If a computer hacker accesses a secure processing center to gather card information having used a virtual number could save your credit. Their attempted use of the virtual number will lead to denial of credit.

Everyone expects their card information to be safe and secure when making a purchase online. But there is the possibility, however remote, that an employee of the online merchant would sell card information to criminals. Of course this would make them a criminal as well but some people will do anything if the price is right and there is little possibility of them being caught.

Virtual credit card numbers biggest benefit is from protecting your valuable information online. If such a number is stolen, it is or becomes worthless in a short time. If you make several purchases with your credit card per month you may see a real benefit from using virtual card numbers to assure all your transactions are secure and your information protected.

About the Author:

Author: Kermil J. Fogarth has extensive finance information available at his website. For more tips on protecting your credit.

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