These days, almost everyone shops online. Even if you don’t do a massive amount of online shopping, you probably have subscriptions to things like streaming services that you pay with a credit card.
Unfortunately, using any online payment method exposes you to some fraud risk. Hackers may try to intercept your credit or debit card details, or companies might lose your card details in a data breach.
What is a Virtual Card?
Virtual cards give you a temporary credit card number to use to make purchases. They’re great for use on insecure connections or less-than-savory websites and can help you avoid the hassle of replacing your card after a data breach.
Pros and Cons of Virtual Cards
Using a virtual credit card brings many benefits, but there are also downsides to consider.
Security, flexibility, and ease of use are some of the many benefits of virtual cards.
Protect your information: When you use a virtual credit card, you don’t have to provide your true account number to the vendor. That means if someone intercepts your data or breaches the company’s network, your actual credit card number or banking information is safe. All you have to do is create a new virtual card number, adding a layer of security to your online purchases.
Set purchase limits: Many virtual card providers allow you to set spending limits for individual virtual cards. This feature can be a great way to create a budget for yourself or limit how much fraudsters can spend if they get ahold of your virtual card info.
You could also use spending limits to allow your children to make online purchases or buy virtual items in games without worrying about overspending.
Multiple cards for multiple purposes: Many virtual card services give you the option to create multiple virtual cards. dash.fi goes a step further, letting you create an unlimited number of virtual cards. You can create a different virtual card for every online store or subscription to protect yourself further.
Easy to cancel and replace. If someone gets ahold of your virtual card details, you can cancel that card and turn off the fraudster’s access to your account in just a few clicks. You can also set up a new virtual card just as quickly, and that’s much simpler than dealing with the headache of replacing a physical credit card if its data gets stolen.
If you know you’ll only use the card for a limited time, and you can set an expiration date to cancel it automatically.
Like all things, virtual cards do come with cons. Here are some issues you may encounter.
Primarily applies to online transactions: For the most part, virtual card numbers only work when you use them online. Because there’s no physical credit card associated with the virtual card number, you can’t swipe a virtual card at a physical retailer to make a purchase.
There may be exceptions to this, as some virtual cards are compatible with digital wallets and many digital wallets generate virtual cards when you use them in stores.
Issues with refunds: If you have to make a return, some online merchants will only offer refunds to the same account used to make the purchase. If you use a virtual card number set up for one-time use or you’ve canceled or let it expire, you might have issues getting the refund applied to your card.
Identity verification problems: If you use a virtual card to do something like book a rental car or hotel stay, you might run into problems. You may be asked to provide the card used to reserve the car or room to prove your identity, only to find that the hotel or car rental company can’t match you to your reservation based on your physical card number.
Require more effort: Keeping your data safe requires a bit more work. If you want to use virtual cards, you may create a virtual card every time you purchase for an extra layer of security, which could feel tedious.
Alternatively, you could use the same virtual card number on multiple sites, but that has its own drawbacks. If you have to cancel that virtual card, you’ll be left updating card info in many places, just like you’d be doing if your actual card number was compromised.
How to Use a Virtual Card
For the most part, using a virtual card is just as easy as using an actual credit card.
When you create a virtual card, you’ll receive all the information you need to use the card, including the card number, expiration date, and security code.
If you want to make a purchase, select your payment method like you usually do, then enter the virtual credit card account information in place of your actual card number and details. When you complete the purchase, the store will charge your virtual card, and the charge will show up on your normal card account.
You can also add some virtual cards to digital wallets, like Apple Wallet or Google Pay, which let you use them for in-store purchases.
Where to Get a Virtual Card
There are many ways to get a virtual account number for your credit card.
One is through your credit card company. Many major credit card issuers offer virtual cards as a benefit for cardholders.
For example, both Citi and Capital One make it easy to protect your credit card information with virtual card numbers. Other card issuers, like American Express, will sometimes give you a virtual card number to let you start spending while you wait for your card in the mail, but otherwise don’t offer virtual cards to customers.
Even if some credit card issuers don’t let you create virtual card numbers directly from your account portal, there are still ways you can protect your account information. Some services allow you to create virtual cards automatically.
For example, when you pay with Google Pay or Apple Pay, the program automatically generates a virtual card for the purchase, protecting your credit card during the checkout process. These lack some of the benefits of virtual cards, such as customizable spending limits, but they still help prevent credit card fraud.
You can also use a service like dash.fi to create virtual cards to use on other websites. Each service has a slightly different focus and features. Some may offer browser extensions to easily create cards while you check out, and others may focus on using virtual cards as a budgeting tool.
What are the Best Virtual Cards?
Choosing the best virtual card is difficult since everyone has slightly different goals and needs. Every virtual card offers fraud protection by keeping your actual card details a secret, so each service’s additional features are what set them apart from competitors.
The easiest way to get a virtual card is through your online account, but only if your credit lender offers virtual cards to its users. If you don’t have that option, these are some of the top services to consider.
dash.fi: dash.fi lets you create an unlimited number of virtual cards. The service bills itself as “the modern charge card for digital ad spend,” offering great perks to business owners who want to use their cards to buy online ads. These perks include 3% cash back for 60 days after enrollment and a scaling concierge that can help you save on advertising costs.
Citi Double Cash: Citi lets cardholders create virtual credit card numbers easily without using a separate service. The Double Cash is one of the best simple cash back cards, offering 2% back on everything you purchase. That makes it a top choice for people who want to earn rewards and keep their info safe.
Apple Card: The Apple Card offers an instant virtual credit card when approved, meaning you can immediately add the card to your Apple Wallet and start spending. You can use the card virtually if you don’t want a physical card.
Google: While Google doesn’t offer a credit card of its own, it lets you use almost any card as a virtual card. When you add a credit card to your Google account, Google may prompt you to use a virtual card when you go to make purchases. These prompts will automatically appear when you’re on the checkout screen on your Android phone or in the Chrome web browser.