What is a virtual credit card number?

With identity and credit card fraud as a prevalent threat, banks continue to search for ways to help keep user data safe. That’s where a virtual credit card number can potentially help.

With a virtual credit card number, a person can make an online purchase without using their actual credit card details. This can help ensure that sensitive data — such as the actual credit card number — is never revealed during the checkout process.

This article explores how a virtual credit card number may work and the potential advantages and disadvantages of using one.

How do virtual credit card numbers work?

Virtual credit card numbers are a type of credit card that can be used exclusively online and are linked to another credit card. Think of them as a temporary or one-time credit card number for online purchases.

A credit card's virtual number is different from the physical card it’s associated with, meaning the actual card details aren’t shared within the transaction. Therefore, the credit card details aren’t readily available to those seeking to steal the information via fraudulent methods. Since virtual credit card numbers are meant for single use, any transactions attempted after that first use would fail.

An important distinction to note: virtual credit card numbers are not necessarily the same as digital credit cards, which are simply the digital versions of physical cards that can be stored on a smartphone.

Pros and cons of using virtual credit card numbers

Before using a temporary credit card number for an online purchase, consider some of the potential pros and cons of using them.

Potential pros of using virtual credit card numbers

Here are some potential advantages of virtual credit card numbers:

• Fraud protection. Virtual credit card numbers usually don't link to personal banking or financial information. That means if the number gets compromised after making a purchase, a scammer would not be able to use it.

• Convenience. Virtual credit card numbers are typically generated instantly and can be used right away.

• Ease of use. When shopping online, a virtual credit card number works the same as a physical card.

Potential cons of using virtual credit card numbers

Here are some possible disadvantages of using virtual credit card numbers:

• Not all card providers offer them. Although virtual credit cards continue to gain popularity, not all financial institutions make them available.

• Can only make online transactions. Usually, virtual credit cards cannot be added to a digital wallet or used in stores, so they're only valid when shopping online.

• They may complicate some purchases. Some transactions, such as hotel or rental car reservations, require people to show the same credit card used to make the reservation. Since virtual numbers can be temporary, verifying information may require additional time.

How to generate a virtual credit card number

Each card provider may have a different method of generating a virtual credit card number, but the following steps are what people can typically expect:

1. Check to see if the credit provider offers virtual credit cards.
2. Log in to the card's online account.
3. Enroll in the virtual credit card program if required.
4. Request a virtual credit card number to be generated.

How do virtual card numbers differ from mobile wallets and payment apps?

Virtual credit card numbers are normally created randomly and may only be used when shopping online for a single transaction. A digital credit card is a version of a physical credit card that can be stored in a digital wallet or payment app. Since digital cards stay on a mobile device, they can be used for in-store purchases that allow contactless payment via mobile device.

Potential safety considerations when using virtual credit cards

Though virtual credit cards may be considered safe, there are additional steps people can take to potentially better protect themselves from fraud. Here are some tips:

• Shop on reputable sites. If a price looks too good to be true or a website doesn't have many reviews, be cautious as it may be fake.

• Monitor transactions. Review statements and online account activity regularly to identify any unauthorized or suspicious charges promptly.

• Avoid public Wi-Fi. When making transactions, avoid using public Wi-Fi networks, which may not be secure. Instead, use a trusted and private internet connection.

Learn about making secure online payments.