On-line shopping is easy, convenient, saves gas and time. But how can we, as consumers, shop safely when so many instances of credit card theft occur as a result of using our credit cards on-line, especially with those sites that “store” your credit card information. Since we are shopping in the virtual world, why not use virtual credit cards?
As millions of people have become victims of identity theft, consumers have become savvy and cautious about how they use and protect their personal information, including their credit card numbers. Many people want to enjoy the convenience of shopping on-line and saving time and money, especially with today’s gas prices, but are fearful of using their actual credit card numbers on line.
One-fifth of identity theft victims blame on-line credit card use for making them vulnerable to this crime. Fear of becoming an identity theft crime victim is the number one reason given by those who avoid shopping on line.
A virtual credit card is one option and layer of protection for those who would like to shop on line but still protect their credit cards numbers.
What is a virtual credit card?
A virtual credit card is a set of replacement numbers for your actual credit card number that can be used to make purchases on line. In some cases they may be called “single-use card numbers.” Consumers use these replacement numbers and only the cardholder and card issuer have any access to the real credit card numbers.
Who offers this service?
Right now Discover, Citi Bank and MBNA credit card companies each have a virtual credit card program. American Express tried one and reports that members who used the program were very pleased but not enough of
their members used it, so the program was discontinued.
The idea is not a new one. The technology has been around for around for about seven years but it is just starting to get more attention as more and more people discover that they have been the victims of identity theft.
MBNA’s program is called SafeShop and they have been offering it for three years now. “It’s very popular with the people who use it,” says Jim Donahue, spokesman for MBNA. “The only people who know the real number are you and us,” Donahue.
Citibank’s protection program is called Virtual Account Numbers. It allows users to set an monetary or time limit of use and is tied to your actual credit card. When you place those settings, a “new” credit card number is generated for use for that purchase. The expiration date option is very useful when registering for a service for 90 days and you are sure you will want to cancel at that point.
Discover’s version is called Deskshop and according to Steve Furman of Discover, Deskshop has “grown at a fairly strong pace over the last six to eight months.”
PayPal, partnered with MasterCard, has begun a BETA version, offered to a select number of PayPal users. Using the PayPal Virtual Credit Card number also saves you time and money by filling in forms for you. Using PayPal’s virtual credit card number will automatically fill in fields in online forms, like your name, address and shipping information. There is no additional charge for using the PayPal Virtual Credit. To make it even easier, you can download the virtual credit card tool bar, and create a security image to be sure it is an official PayPal site. This service also provides you with a fraud alert service. This service detects if a website is fraudulent and then a pop up warning image appears on your screen, so that you do not complete your transaction.
What do I have to do? What does it cost me?
Each provider’s program may differ slightly but the basic idea is the same. Currently, there are no costs for the consumer. It is simply a free service provided by these credit card companies to offer their product’s users peace of mind.
Credit card holders can sign up for this service at their credit card provider’s web site. You may need to download software, or be able to opt for an on line version. Participants receive a randomly computer generated alternative 16-digit number that can be used on line, over the phone, or by mail. Some cards can be used once but some may be used more than once if it is for the same store. For some virtual credit cards, consumers can choose an expiration date that ends in one month, or some extend for up to a year, as long as the date doesn’t extend past the expiration date of the actual card. Discover’s program expiration dates concur with the actual card.
Some plans have spending limit options as well.
When can I use it? Only on-line?
Virtual Credit Card numbers can be used for any purchase where credit cards are accepted. This could include:
*On line shopping
*On line bill paying
*Shopping by mail
*Shopping by phone
Keep in mind that he virtual card number can’t be used for picking up purchases where you will have to show your actual card. A good example of this would be “will call” game tickets.
These services take some extra steps but can also offer an extra layer of protection and more peace of mind. For those who have utilized strategies such as requesting a new credit card number every three months, this won’t seem like more trouble.
Identity thieves strike using many vulnerable areas in personal privacy protection. Credit cards are just one of them. Virtual Credit cards have become a virtual reality that can offer protection and peace of mind for consumers who want to enjoy the convenience of on line shopping, without the fear that their cards will be overdrafted by criminals or abused by identity thieves..