Why You Might Want to Use a Secure, Virtual Credit Card from Privacy.com

NOTE: The following article is “off topic.” That is, it contains no genealogy information. Instead, it describes a new credit card service that I have been using for a while. If you are looking for genealogy-related articles, I suggest you skip this one. If you are looking to save money and to add security to your online shopping experiences, you may be interested in this article.

virtual-credit-cardMore than 205 million Americans – more than half the population – uses online shopping. While all of these online shoppers apparently are comfortable with the security, a few others are still nervous about using credit cards online. That’s sad as millions of people prove every day that online shopping is safe.

Federal laws specify that you’ll only be liable for up to $50 of any bogus transaction. However, the credit card companies exceed this legal minimum; they will reimburse you for the first $50 as well as the remainder of the charge.

However, if someone needs a bit more assurance, a virtual credit card may be just what they need.

A virtual credit card makes it almost impossible to have your credit card number stolen by hackers or by anyone else. A virtual credit card, sometimes referred to as a temporary credit card or throw away credit card, is a credit card number that is generated by a credit card issuer, on your behalf, for temporary use.

You don’t actually receive a physical credit card with this number. Instead, the issuing bank or company simply provides a valid credit card number electronically. You save the number, then use it in future online purchases.

In addition to the virtual credit card number, you can use an online payment service like PayPal and Google Checkout to create an additional layer of protection. These systems come with their own protection measures that offer even more protection above and beyond what the credit card companies offer. However, for this article, I will focus only on credit cards.

Virtual credit cards are available in different “flavors.” One use for these virtual numbers is to use them when you’re signing up with a free trial. Let’s say you want to get your free credit score and report. As you probably know, most of these services are free for only a month. You then have to opt out of their monthly service or you will be charged on an ongoing basis. If you were to use a virtual credit card number instead of your regular card number, you would never run the risk of being charged the continuing fee.

My favorite use is as a one-time use card: you can make exactly one charge, and then the credit card is automatically canceled. Even if someone steals that credit card number, it won’t work when that person tries to make an additional charge. The second charge will be rejected as “card expired.”

Another version of virtual credit cards is an early expiration date. Let’s say you want to purchase a one-year subscription, but you are suspicious that the publisher may attempt to automatically renew your subscription next year without first asking your permission. That is a shoddy business practice but is all too common with many of today’s businesses. With virtual credit cards, you can specify your own expiration date. You can specify that the temporary number will expire six months from now or even one month from now. The attempt to charge an expired card will be rejected. The publisher will have to contact you to get a new card number. YOU remain in the driver’s seat; YOU decide whether you want to renew or not.

A final variation of virtual credit cards is a limitation on the amount to be charged. Let’s say you want to purchase something online that sells for $19.95. You can create a virtual card that has a maximum limit of a $25 charge. (I’d suggest adding a few dollars to cover possible taxes and/or shipping charges.) The seller can charge your card for $19.95 or even for $25, but any attempt to charge more than that, possibly for something you don’t want, will be rejected.

I have used virtual credit cards for years for online purchases, especially when purchasing something online from a new vendor with whom I have not previously done business. I am very happy with the results.

Some banks offer virtual credit cards, but not all banks do so. Some are offered under the banks’ own “brand names,” such as Bank of America’s so-called ShopSafe virtual cards. Bank of America offers the virtual credit card service to its customers free of charge. See https://www.bankofamerica.com/privacy/accounts-cards/shopsafe.go for details about Bank of America’s virtual credit card. Other banks may or may not offer similar services.

If your bank also offers virtual credit cards, I would suggest you first investigate using the bank’s product. However, many banks that used to offer virtual credit cards have stopped doing so. Apparently, there isn’t much profit in offering such card numbers. Luckily, a few commercial services have stepped in and offer virtual credit cards although they usually charge for the service. However, there is one notable exception: Privacy.com offers a variety of virtual credit card services free of charge. At least it is free to you, the user. Privacy.com is free to use and makes its money by taking a cut from the interchange fees that merchants pay to Visa and the banks.

Privacy.com will create a virtual credit card to meet your preferences and will even (optionally) add it to your web browser as an extension where it can be used quickly and securely. See something you wish to buy? Click on the browser’s extension and the virtual credit card number, expiration, and CVV2 number will automatically be filled into the online order form. If you prefer, you do not need to use a browser extension. You can enter the information manually. The company also offers apps for Apple iOS and for Android mobile devices.

Privacy.com keeps your personal information private while being even more convenient than using a regular credit card online.

Privacy.com uses industrial-grade security. Your private information is PCI-DSS compliant, the same rigorous security standards as used by your bank. You can read a detailed explanation of PCI-DSS compliant standards on Wikipedia at https://en.wikipedia.org/wiki/Payment_Card_Industry_Data_Security_Standard.

Data is never sent over the Internet in plain text. All web traffic is sent over Transport Layer Security (TLS) HSTS for privacy and security.

Privacy.com is not linked to an existing credit card. Instead, it directly accesses your checking account. You can obtain a virtual credit card even if you do not have a normal credit card. You’re also trusting Privacy.com to keep all that data safe and private. In exchange, you get a new layer of insulation from the world of online fraud.

You can sign up for Privacy.com’s service free of charge. It is free to join, and it is free to create a new card. It also means there are no charges for keeping cards open, and it is free to you to use the virtual card. This is an excellent option for services that have recurring fees that you need to leave open for months.

The company also says that some premium (paid) features are planned for the future, but the core service described in this article will always remain free.

Privacy.com is another example of the Internet coming up with solutions that just aren’t practical in the physical world. Having multiple virtual credit cards is a good way of reducing credit card fraud. An individual card is far less useful to thieves than is a normal card. Creating that system with plastic cards would be far too costly. A computer, however, can generate a card number and get into the payment system in seconds.

I found Privacy.com to be simple to use; and, in my limited testing, it worked perfectly. In short, it worked as advertised. While it may sound scary to connect it to your bank account, keep in mind that Federal laws limit your liability to $50 of bogus transactions. However, Privacy.com says the company will also reimburse you for the first $50 as well as the remainder of the charge. In short, I trust Privacy.com

For more information about virtual credit card numbers from Privacy.com, or to sign up for the service, go to: https://privacy.com.

NOTE: I am not compensated in any manner for publishing this article. I am simply a satisfied customer of Privacy.com and decided to share my enthusiasm with newsletter readers.

8 Comments

If you are buying an info product which includes automatic renewal – beware. I had established a CC with a very low limit thinking this wold prevent automatic renewal and return the renewal decision to me. The bill was paid anyway! — because automatic renewal was exempted from the limit. I now us a “one time CC” which Mr Eastman described many moons ago. Personally, I use a Bank of America service called “Shop Smart” which created a CC with a specified short term expiration date and a limit I set. It works online like any other CC, including the expiration date, and security code.

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Citi MC also offers virtual cards – i’ve used it for years for all subscriptions as well as many online sites that I do not routinely shop at as well as online charity donations – think its great and it’s truly the only reason I keep my Citi MC. I limit the amount as well as the expiration date and it works so well – any subscription based site has always had to contact me for renewal.

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I’m curious to know how virtual credit cards would affect a credit score. Would there be in impact if you open several, even with short expiration dates? I wouldn’t mind using a virtual CC, especially to avoid auto-renewals, but wouldn’t want to negatively impact my credit score.

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    It shouldn’t affect credit cards, except the ones are aren’t using because of using them. The more credit you use and pay off regularly, the better your score.

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What is the advantage of using this versus paypal? Or using the payment methods of sites that use paypal for the transaction where you don’t have to have a paypal account? Paypal can be set up to draw off a credit card or a balance transferred from your checking account. Paypal is not without issues, but for sites that accept it, I use it. I only have to trust one online entity, paypal, just like one is with privacy.com.

Some sites (looking at you Amazon) won’t accept paypal. But some sites also will not accept virtual cards (again Amazon), which are a form of pre-paid cards without an actual card. An alternative is to set up a separate checking account with a debit card and keep only a small balance (beware though of using it for gas or restaurant charges which may pre-authorize a larger amount). You generally can transfer from your main account online into that 2nd account. Amazon will accept such debit cards.

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    —> the advantage of using this versus paypal?

    There are many differences between virtual credit cards and PayPal. For one, virtual credit cards allow you to limit the amount that may be changed or the expiration date of the card.

    PayPal is generally considered to be more secure than credit cards. For instance, PayPal does not allow anyone to charge you without your permission. (There is an OPTION for subscriptions in PayPal that allow for periodic automatic payments without asking permission every time but even that is under the user’s control. The PayPal user can cancel a subscription at any time within a few seconds. I have done that a couple of times with PayPal. It is much more difficult to do that with credit cards.)

    —> Some sites (looking at you Amazon) won’t accept paypal.

    True, but PayPal also offers debit cards. You can use the PayPal debit card to pay Amazon or any other account that accepts credit cards and debit cards. I normally travel on my PayPal debit card and it has always worked perfectly for me. I use it to charge airline tickets, restaurant meals, hotels, and, yes, to occasionally purchase something from Amazon.

    Liked by 3 people

There’s another credit card out there with a lot of control over who can charge your card. It’s called Final (http://getfinal.com). I have it, and I can lock a virtual card number to a particular vendor, meaning someone else can’t steal the number and charge it. I also can generate unlimited one-use virtual card numbers. They’re coming out with even more new features soon, like capping at a monthly charge total (good for your Comcast bill that suddenly goes through the roof with no apparent explanation). It’s worth a look!

Liked by 3 people

I’ve used the virtual cards before and they’re not as easy as you’d think to use. The concept is a good one though. I found Guard Street (www.guardstreet.com) and signed up for their lowest cost package which includes a secure web tool that protects my digits as I use the card. It’s not a fake card, but it does keep things invisible while I use a card.

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