Photo of Woman using a Laptop and holding a cup of coffee

Financial Advice

Banking Made Just for You

We believe great banking is about building lasting relationships and providing the financial resources to help our customers achieve their individual and business goals.

Digital (or Virtual) Credit Cards

Digital (or Virtual) Credit Cards

Data breaches occur all the time these days. They hardly make the news headlines anymore. One of the outcomes of these widespread breaches is that some credit card companies have started to provide digital or virtual credit card numbers to their customers. But, is it the best solution for you? Let’s explore what these cards do, the benefits they offer, how to get them, and what you need to know.

What Are Digital Credit Cards?

A virtual credit card allows you to mask your main credit card number and use a unique card number for each transaction. You can create as many of these virtual card numbers for your actual credit card without jeopardizing your credit score or your standing with the credit card company.

Depending on your credit card issuer, you will receive unique numbers for each transaction or a single virtual card to use with all merchants. Many allow you to request a new number for the card as often as you like. While these cards can make online transactions safer for you, they do not make you impervious to fraud. It would be best if you continued to manage your account and monitor transactions for suspicious activities.

Getting a Digital Credit Card

Most credit card providers offer this service free of charge to their customers. You must first have a credit card. Then, you must log into your account with the credit card company and take the following or similar steps:

  1. Go to account settings and look for the “virtual card numbers” or “digital credit card” option and select it. If your credit card company does not offer one of these options in the account settings, they may not yet provide this service.
  2. Download the app that allows you to access the digital card if required. That will make the process of using your credit card easier.
  3. Accept the assigned digital credit card number.
  4. Choose how long you would like that card to be valid. You may have the option of one-time use or the ability to establish specific expiration dates. Suppose you have the type of digital credit card that is different for each merchant. In that case, your expiration date may be pre-selected.
  5. Get the security code for your digital credit card. That allows you to use the digital card just as you would a physical card, except for online purchases.

There may be variations from one credit card provider to the next. However, most will offer something very similar to this. The goal is to make it easier to protect yourself, not more difficult.

What to Be Aware Of?

Digital credit cards are different from payment apps, like Google Pay or Apple Pay. Those services are for use at brick-and-mortar locations. On the other hand, digital credit cards are designed specifically for use with online transactions.

Other things to be aware of concerning digital credit cards include the following:

  • Returning items purchased online with virtual credit cards to physical locations may be problematic. You will not be able to insert or swipe the card used for the transaction.
  • Virtual credit cards often have short expiration dates, making them unattractive options for recurring fees unless you plan to update the information regularly.
  • Not all providers offer digital credit cards. While that may change in the future, it is not yet universal.
  • Obtaining a digital credit card number can be a bit of a hassle, and some consumers find it unattractive for that reason.

The primary benefit is that if a data breach exposes a virtual credit card number, you don’t have to cancel your credit card. You only have to cancel that specific digital credit card number and seek a new one of those. You can continue to use your physical credit card for essential shopping.

Takeaway

  • Digital credit cards can be highly beneficial when it comes to protecting your financial interests.
  • Digital credit cards do not completely prevent fraud, but can insulate your exposure when data breaches occur.
  • It may be a bit of a hassle to get a digital credit card, but many consumers feel it is well worth the effort.