Virtual Credit Cards Provide Consumers with an Extra Layer of Protection Against Credit Card Fraud
Written by Curtis Arnold
Posted On: October 25, 2005
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Cardholders of Discover, CitiBank and MBNA credit cards have the option of participating in a program using virtual credit card numbers aka single-use credit card numbers. The program was designed to give consumers concerned with credit card fraud and identity theft some peace of mind when making purchases online.
Cardholders can sign up for the free program at their credit card company’s website. When they want to make an online purchase, they receive a 16-digit number, randomly generated by the credit card company. This temporary credit card number can be used once or sometimes repeatedly at the same online store.
According to a recent article in the Washington Post, virtual card numbers were initially designed for Internet shopping, but can be also used for purchases made over the phone as well as through the mail. However, they cannot be used for in-store purchases or whenever a traditional plastic credit card is required for payment.
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The virtual card technology has been around for six years, but according to consumer advocates the technology has not been very popular with consumers. In fact, American Express dropped its program last year due to lack of interest. Interest in virtual credit cards seems to be increasing, though, thanks to recent headlines regarding identity theft breaches. A major benefit of virtual card programs is that personal information is concealed during the transaction.
A recent study found that 46% of credit card fraud victims had no idea how fraud occurred, but 21% said they believed their credit card number was stolen off the Internet. Obviously, card issuers hope that virtual card programs will help address such concerns. Curtis Arnold, founder of CardRatings.com, sums up the benefits of the technology by stating that,
"The virtual card program is simply an extra layer of security to protect the credit and identity of consumers who choose to buy online, much like installing a home security system helps to protect a home from intruders."
More information about this topic can be found in the Credit Information section of CardRatings.com.
For information on identity theft protection, please visit CardCops.com
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Curtis Arnold, a nationally recognized consumer educator and advocate, has been educating consumers about credit cards since 1998. New! Curtis is the author of "How You Can Profit from Credit Cards: Using Credit to Improve Your Financial Life and Bottom Line" (FT Press, 2008). He is also the co-author of the upcoming Complete Idiot's Guide to Person-to-Person Lending (Alpha Books/Pengiun Group USA, April 2009), a contribitor to The Ultimate Allowance (InnerWealth Publishing, 2008) and is extensively featured in 42 RulesTM for Driving Success With Books (Super Star Press, January 2009).
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