What Is a Virtual Credit Card?

Virtual credit cards help prevent against online fraud.

Virtual credit cards (sometimes called controlled payment numbers) are one service offered by some banks and credit card companies to help online shoppers protect against fraud. While they have their disadvantages, they are one of the best online safety measures currently available.

The Dangers of Online Shopping

Fraud--always a danger with credit cards--is particularly important to guard against while shopping online. Sites or programs that appear legitimate may only be tricks designed to collect credit card numbers, and even legitimate transactions may be spied upon if a connection lacks the proper security or if an online company's database is hacked. While most credit card companies do not hold their customers liable for a significant portion of money lost to fraud, access to your credit card number isn't anything you want to give to anyone without your knowledge or consent, as it can be the first step in a larger campaign of identity theft.

Virtual Credit Cards

What's often called a "virtual credit card" is actually merely a credit card number. Providers that issue virtual cards will usually supply a piece of software to be installed on your computer. Using this software will generate a temporary credit card number, tied to your permanent one, which can be used to make purchases online. The number can't be traced to your real credit card or to your identity, and won't last forever, so thieves or unscrupulous merchants won't be able to do much with it.


Some virtual credit cards are one-use-only. You generate a new number each time you make an online purchase. Others can be set to expire after a specific length of time or a specific expenditure. Still others may last longer and be used multiple times, but only with a single merchant; anyone attempting to use them to buy anywhere else will be denied. How exactly your virtual credit card works depends on your provider and on the program you choose.


The "controlled payment number" system was developed by the Dublin-based company Orbiscom (now a subsidiary of MasterCard.) Credit card providers supporting it currently include Citi, Discover and Bank of America--see the Resource section for links to all three.

Similar Services

A virtual credit card isn't the only way to protect against online fraud. Services like PayPal mediate transactions between merchants and customers, allowing money to be transferred without having to reveal credit card numbers to every merchant you patronize. Prepaid credit cards--also offered by many providers--are approved for a set amount of money when they are activated, preventing a thief from continuing to use them after the limit is reached.


Because virtual credit cards can be a hassle--and because customers are usually liable only for $50 of fraudulent credit card charges anyway--many people do not take advantage of this program. But if you do a lot of online shopping and would prefer not to give your card number to a service like PayPal, virtual credit cards can be a very effective way of preventing fraud and identity theft.

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