Credit Cards

What Is A Virtual Account Number

By David Krug David Krug is the CEO & President of Bankovia. He's a lifelong expat who has lived in the Philippines, Mexico, Thailand, and Colombia. When he's not reading about cryptocurrencies, he's researching the latest personal finance software. 5 minute read

While buying online might save time and energy, it also leaves you vulnerable to identity theft. Your personal information may be compromised in a number of ways, including traffic interception and website hacking.

The theft of credit card information might lead to unauthorized purchases being made in your name. You can almost always get the charges removed from your account, but you’ll also have to deal with the headache of getting a new card shipped to you and updating your payment information everywhere you use the card.

Intent on avoiding such a mess? Using a virtual credit card number is one approach to protect your real credit card information.

What Is a Virtual Credit Card Number?

Virtual credit card numbers are numbers that can only be used with one particular credit card account. When making an online transaction, you can substitute the virtual credit card number with your actual credit card number.

You don’t have to tell an online merchant your real card number to make purchases using your virtual card number; instead, the charges will be charged to your real credit card account. You may shop worry-free knowing that your actual card number isn’t being used at any point in the process.

It’s not the same as using a physical credit card or connecting it to a mobile payment service like Apple Pay when using a virtual credit card number. Perhaps most significantly, with a virtual credit card, you get to decide how much you spend and for how long a given card can be used at a given store.

For one-time purchases, you can generate a virtual card number with a limited validity period (say, two days). In this manner, even if someone gets a hold of the virtual card number you generate, they won’t be able to access your real credit card account.

In a similar vein, you can restrict a virtual card number’s spending to a predetermined amount. If you’re planning on making several transactions with the same virtual card number, this feature can help you stick to your spending limit.

For subscription services and other ongoing expenditures, it is also helpful. You have the option of establishing a monthly cap at precisely the right level to meet your subscription fee. No matter what happens to your card, setting a spending restriction will prevent it from being used to go on an extravagant shopping spree if it gets into the wrong hands.

What Is the Process for Virtual Credit Card Numbers?

Virtual credit card numbers have the same functionality as physical ones. After generating a virtual card number, you will have the card number, CVV, and expiration date necessary to make purchases online.

A virtual credit card number can be used at any online store that accepts credit card payments. Virtual cards can be added to mobile payment apps or digital wallets. For online purchases and payments, you cannot tell the difference between them and a real credit card number.

The amount of any purchases made with a virtual card will be deducted from the card’s available balance. You will receive one bill at the conclusion of the billing cycle that includes both virtual card costs and normal card charges without differentiation.

How Can I Get a Virtual Credit Card Number?

The process of obtaining a virtual credit card number is simple. You can use this feature through the online banking section of the customer service website of many card issuers. Citi, Capital One, and Wells Fargo are just a few of the issuers that allow for the creation of fictitious credit card numbers. 

Some credit card companies, including Visa, Mastercard, and American Express, provide systems that generate virtual credit card numbers immediately at checkout to save you time.

However, you are not completely out of luck if your card issuer does not support the creation of a virtual account number. Websites like Privacy.com allow users to make their own virtual cards for online use for a little charge. These services even allow you to generate fictitious checking account numbers for use with a debit card.

Getting a virtual card number typically requires no additional paperwork. Credit card companies will grant you a virtual account number if you have an active credit card account and sufficient credit.

Advantages and Disadvantages of Virtual Credit Card Numbers

While virtual credit card numbers can provide added financial protection and peace of mind, they are not without their disadvantages.

Virtual Credit Card Numbers’ Advantages

The adoption of digital credit cards has several advantages. This includes, but is not limited to, protecting your credit card information and allowing you to limit your spending with a variety of virtual cards.

  1. Ensure the Security of Your Financial Data. If your credit card number is stolen, you must immediately replace the card and update the information on any websites where you used the compromised card. If a stolen number is discovered and a virtual card is in use, it has just to be disabled. Getting a brand new card and account number isn’t required. This simplifies the process of investigating and preventing credit card fraud.
  2. Put Constraints in Place. It is possible to limit your spending with virtual card numbers. With a virtual card on Amazon, for instance, you can set a monthly spending limit of $100. You can more easily keep track of your spending habits if you set a limit and refuse any transactions exceeding that amount.
  3. Lessen the use of tracking data. Nowadays, practically everything is monitored by companies and ads. A user’s movements can be monitored if they use the same card at several establishments. Your online transactions are more secure when using a virtual card number.

Virtual Credit Card Numbers Have Disadvantages

While there are several advantages to using virtual credit card numbers, these numbers cannot prevent all instances of credit card theft.

  1. The Service is Not Provided by All Card Companies. However, certain banks don’t allow for virtual card numbers, and Discover is one of these. To produce such figures, you’ll need to resort to a third-party program.
  2. There is No Actual Card. Electronic transactions are the sole purpose of virtual account numbers. For in-store purchases, your real account number will still be used, as you cannot generate a physical credit card with a virtual card number.
  3. Doesn’t Put a Stop to Fraudulent Purchases 100% of the Time. If you haven’t established very high spending limitations on your virtual credit card if someone gets a hold of your number they can still use it to make transactions. You can repair the damage done to your credit without getting a new card, but you will need to contact your card issuer to get the fraudulent charges erased.

Bottom Line

Using a virtual credit card number can help you avoid being the victim of credit card fraud and the headache of having to replace your credit card. While they won’t prevent all instances of identity theft, they will provide you with an additional safeguard.

It’s crucial to take safety precautions against online fraud because of its seriousness. Virtual card numbers are just one method of combating identity theft; other options include freezing your credit, reviewing your credit report frequently, and enrolling in an identity theft monitoring service.

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