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A virtual credit card offers an additional layer of protection when you're shopping online by letting you pay using a temporary digital credit card number instead of your actual credit card number. Virtual credit cards offer more security, but they're not widely available and may not be accepted by all merchants. Here's what you should know about virtual credit cards and how to decide whether they're a good option for you.
What Is a Virtual Credit Card?
A virtual credit card is a digitally generated credit card number that's linked to your existing credit card account. Instead of using your physical credit card number when you're shopping online, you use the virtual number to hide your card information and protect your account from fraud. Transactions made with a virtual credit card will appear on your billing statement alongside your regular transactions.
The security code, expiration date and credit limit on a virtual credit card may differ from your actual credit card. Card issuers may create one-time use or merchant-specific virtual cards or allow spending limits.
A virtual credit card typically can be used only online. In some cases, you might need a specific app, internet browser or another tech tool to take advantage of a virtual card number. You may also need to use it with your laptop or desktop computer rather than a mobile device.
Learn more: What Is a Virtual Credit Card?
Issuer-Generated vs. Device-Specific Virtual Cards
Virtual credit cards aren't the same as the virtual credit card numbers used by digital wallets like Apple Pay or Google Pay. Virtual credit cards are a service offered by credit card issuers and can be created, managed or deleted through your online account or mobile app.
Digital wallets create a device-specific virtual card via tokenization when you add your payment information. Similar to virtual credit cards, these device-specific virtual card numbers protect your card information during transactions, but they generally can't be viewed, managed or used outside of the device and app where they're created.
Benefits of Virtual Credit Cards
Using a virtual credit card can offer several benefits, including security and spending control.
Better Fraud Protection
If your virtual credit card number is compromised in a data breach, you can replace or deactivate the card number and protect your account. Because your physical card number isn't shared with the merchant, you can continue using your credit card without requesting a replacement.
Learn more: What You Can Do to Avoid Identity and Credit Card Fraud
Greater Privacy
When you use a virtual credit card for purchases, your physical credit card number remains safe from being exposed. This can reduce the number of merchants that have your actual credit card number on file. To increase privacy, some card issuers allow you to limit how long virtual credit cards are active and where they can be used.
Spending Controls
Depending on the card issuer, you may be able to set limits that help control spending. For example, your card issuer may allow you to set a spending limit, cap the number of transactions, specify a merchant or set an expiration date for the virtual credit card.
This feature is particularly helpful for controlling spending for teens, employees or other authorized users. These controls can also help you stay within your budget.
Instant Replacement
When a physical card is lost or stolen, you generally must cancel it and wait for a replacement credit card to arrive in the mail. Virtual credit cards can be replaced almost instantly by logging in to your account and following the card issuer's instructions. That means you can often continue shopping online instead of waiting for a new physical card to arrive.
Faster Checkout
A virtual card can simplify online shopping. For instance, instead of typing out a card number every time you make an online purchase, you can copy and paste the card information or autofill using the browser extension or app where you've saved your payment information. This can save time and lower the chance of entering your payment information incorrectly.
Drawbacks of Virtual Credit Cards
While there are a number of benefits, virtual credit cards do have some disadvantages that limit their usefulness for some cardholders.
Limited Acceptance
Some virtual credit cards can't be used for in-person transactions, merchants who have opted out or when you need to verify your identity. Additionally, some merchants, like hotels and rental car companies, require your physical card for final booking, so you can't complete the transaction with a virtual credit card. Virtual credit cards may not be compatible with some digital wallets.
Tip: If a merchant requires you to present the same physical credit card used for a purchase, you may need to use your physical card instead of a virtual one.
Tech Requirements
Virtual credit cards may require a specific internet browser or extension for setup or use. This could mean using a laptop or desktop computer to use the virtual card number. The setup process and supported devices vary by card issuer.
Additional Management for Subscriptions
If you set an expiration date or delete the virtual card used for subscriptions, future payments may be declined, putting your subscription at risk of cancellation. If you plan to use a virtual credit card for recurring payments, choose one without an expiration date or update your payment information before the card expires.
Limited Availability
Not every card issuer offers virtual credit cards. You may have to apply for a new credit card with a different card issuer if you're interested in using a virtual credit card and your current card issuer doesn't offer them. Features vary between card issuers, so it's important to explore what's available before using a virtual credit card.
Virtual Credit Cards vs. Physical Credit Cards
A virtual credit card and physical credit card share the same credit account, but their form and use are different. A physical credit card is a plastic or metal card that you can carry with you and tap or swipe for in-person purchases. On the other hand, a virtual credit card is a unique card number separate from your physical credit card generated by your card issuer for online or in-app purchases.
| Virtual Credit Cards | Physical Credit Cards | |
|---|---|---|
| Form | Digital only | Plastic or metal card |
| Primary use | Online purchases | Online and in-person purchases |
| Card number | Temporary | Permanent |
| Security | Hides your actual card number | Merchant receives your card number (unless encrypted via digital wallet or tap-to-pay) |
| Replacement | Issuer can generate a new card number instantly | Issuer sends a replacement card in the mail |
| Expiration | May allow custom expiration dates, depending on the card issuer | Set by the card issuer and doesn't change until renewal |
| Best for | Online shopping | Everyday purchases |
Virtual credit cards can be created and deleted as needed. Physical credit cards can only be replaced at expiration or by reporting your card lost or stolen.
Transaction Options
A physical credit card is more versatile and can be used:
- In stores
- At restaurants
- For hotel stays and car rentals
- Online
- In digital wallets
On the other hand, a virtual credit card generally is limited to:
- Online shopping
- Mobile apps
Account Generation
Virtual credit cards are created instantly through your card issuer either online or through the mobile app. If you need a new virtual card, your issuer can generate a new one immediately. However, you must have an open, active physical credit card account to create a virtual credit card.
It takes several days to replace a physical credit card since you have to wait for the card to arrive by mail. Some card issuers offer the option to add your card number to a digital wallet to make payments while you wait for your physical card to arrive.
Account Information Sharing
While a virtual credit card has a different number from the physical credit card, purchases still post to the same credit account and both accounts share the same:
- Credit limit
- Rewards program
- Annual percentage rate (APR) and fees
- Billing cycle and statement
Learn more: Are Digital Wallets Safe?
How to Decide if Virtual Cards Are Right for You
Virtual credit cards can offer protection from fraud or serve as an emergency backup if you don't have your physical card or prefer not to use it.
Here are a few ways to know whether virtual cards are right for you.
- You're a heavy online shopper. Using a virtual credit card can help protect your credit card information if a merchant you've shopped with experiences a data breach. If your card number is compromised, you can easily replace it without having to wait for a new credit card to arrive in the mail.
- You've experienced credit card fraud. If you've had your card information stolen before, a virtual credit card number can offer peace of mind when you're shopping.
- You want more spending control over employee or teen spending. Some issuers allow you to set spending limits, expiration dates or merchant limitations. These controls can help prevent overspending.
- You want another layer of privacy. A virtual credit card offers more protection for your account by hiding your actual account information. Your real account number won't be exposed in a data breach.
Tip: Most credit card issuers offer zero liability fraud protection, which limits your responsibility for fraudulent transactions. Beyond this protection, your liability is legally limited to $50.
Frequently Asked Questions
Are Virtual Credit Cards Safe?
Virtual credit cards are relatively safe since they don't expose your actual credit card number. If the card is exposed in a data breach, you can delete it without having to change your underlying credit card account number.
How Do I Apply for a Virtual Credit Card?
If your existing credit card issuer offers virtual credit cards, you can generate one through your online account. You don't typically have to undergo a separate application process.
Can I Get a Free Virtual Credit Card?
Yes, card issuers typically don't charge an additional fee for virtual credit cards. While your card may come with an annual fee, it's independent from your virtual credit card.
The Bottom Line
A virtual credit card can make online shopping more secure by helping protect your actual card number from fraud and data breaches. It doesn't replace your physical credit card, but can be a valuable tool for online purchases and subscriptions. If your card issuer offers virtual credit cards, using one for online purchases can add an extra layer of protection with less effort.
If you're looking for a new credit card, Experian's card comparison platform can help. You'll be able to compare offers from credit card issuers that are matched to your unique credit profile in one place to find the best card for your needs.