The virtual credit card has been around for some time. Remarkably, few consumers use them. American Express discontinued virtual credit card service in 2004 and Discover followed in September, but Bank of America and Citi still offer it.
Virtual credit card numbers were created to avoid giving out your credit card information. They are used when the credit card can not be physically produced to complete the transaction. These are typically purchases made on the phone or on-line. It is called “a card not present” or CNP transaction.
To create a virtual credit card number, you will need to log into your credit card account to generate a new one-time 16 digit number. The card owner can set a limit on the virtual credit card number. It creates an extra layer of financial protection. Additionally, you can still receive the miles or rewards on your regular credit card account.
There is debate, thought, as to whether this virtual credit card creates extra security or extra hassles. The card is helpful for card issuers because monetary and time limits for its usage. This helps the card issuer because the maximum liability per card is limited to $50. That is also a reason card users have been reluctant to use virtual numbers. To read more, click here.
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