So, what’s in your digital shopping cart this week, sis? U.S. shoppers spent $791.7 billion online last year, up 32.4 percent from 2019 , mainly thanks to store closures and safety measures during the pandemic. The use of food delivery apps doubled. That’s a lot more sharing of our credit card numbers, expiration dates, security codes and zip codes. How comfortable are you plugging this data into an app or an online retailer’s website or sharing it over the phone with the teen taking your order at the local pizza joint?
The 2021 Identity Fraud Study, released by Javelin Strategy & Research and cosponsored by AARP, found that traditional identity fraud losses (for example, from fraudulent purchases) totaled $13 billion last year. With credit card scams on the rise these days, it’s more important than ever to be vigilant for various forms of fraud. They can be frustratingly time-consuming to remedy, even if your bank softens or absorbs the financial blow.
One way to protect yourself when ordering goods is by using “virtual” credit cards that mask your real credit card number.
Never heard of this? Here’s a quick primer on virtual cards and what you need to know to shop and spend safely when you’re using plastic for your purchase.
What are virtual credit cards?
Virtual credit cards are computer-generated, random credit card numbers designed to thwart crooks who try to steal credit card data for their own gain. Virtual cards work by swapping out your actual credit card number with a string of substitute numbers during a transaction.
As such, virtual cards are sometimes called temporary credit cards, single use cards or disposable cards because they’re typically meant for one-time use, or they’re designed to work with just one merchant.
Virtual credit card numbers are used during online purchases and when you’re shopping by mail or telephone — in other words, with transactions where you don’t have to show your physical credit card.
How does using a masked credit card number benefit you?
The main benefit of using a virtual or masked credit card number is that it hides your true account number from cyberthieves and other con artists. If a crook can’t see your credit card number, they can’t steal it or make unlawful purchases on your account. That’s peace of mind.
Obviously, given data breaches at major companies, it’s not possible to always prevent hackers and thieves from getting their hands on your information. But with virtual card numbers, you can nix theft when you’re using credit, which makes you a much harder target to victimize.
When should you use a disposable card?
To gain the broadest level of protection against hacking, credit card fraud or identity theft, you should consider using a masked card number anytime you’re shopping online, by mail or phone and are about to make a purchase. Admittedly, that might seem a bit extreme to some folks, especially if you mainly shop at trusted stores or with brands that are well known to you.
If that’s the case, you can also just get a virtual card number when you’re buying from a seller you don’t know (like someone on Etsy or Amazon) or patronizing a retailer with whom you’ve never done business.
Either way, don’t forget that even big-name retailers can be hacked, compromising consumers’ data. Case in point: Credit card security breaches have occurred at a range of popular stores, including Target, Michaels and Neiman Marcus.
Experts from the Financial Industry Regulatory Authority (FINRA) remind consumers to practice good online spending habits no matter where you shop. That means avoiding public Wi-Fi when shopping, creating strong passwords for all of your financial accounts and thinking before clicking so you avoid clicking on phishing links from scammers. (Phishing refers to bogus emails or texts that crooks send — while pretending to be from a company you know — in order to get your credit card data or other personal information.
“It’s incredibly important to stay on alert, especially when purchasing items online or through social media promotions,” says Gerri Walsh, president of the FINRA Investor Education Foundation.
Where can you get a virtual credit card?
Getting a masked or virtual credit card number is as easy as reaching out to your bank or credit card company and inquiring about their credit card masking features and process. They vary and most are free.
For instance, Citibank customers with select Citi cards use a three-step system to get what’s called a VAN, or virtual account number, at no cost. For added protection, Citi users can set dollar and time limits on virtual card numbers, and they can close them at any time. A Citi virtual card number is also only good at the one specific merchant that you designate. So if a thief tries to use that virtual number elsewhere, it won’t work.
Meanwhile, Capital One offers a complimentary service called ENO that generates a masked credit card number for cardholders when they’re shopping online. ENO allows users to lock, unlock or delete their virtual card numbers at any time to have greater control and flexibility when shopping online.
So just call the toll-free number on the back of your credit card and inquire about your credit card firm’s specific masking service.
Lastly, if you do find yourself the victim of some kind of credit card fraud, be sure to report it as soon as possible to the bank, credit union or entity that issued your card. That should help minimize the fallout because the Fair Credit Billing Act limits a consumer’s liability to $50 for fraudulent charges on credit cards and revolving charge cards, like department store cards.
Some credit card issuers even offer their own $0 fraud liability protection, so ask about that too should you need it.
Stay safe while shopping
Adobe Digital predicts e-commerce purchases will reach as much as $930 billion in 2021 and then hit a record $1 trillion in 2022. Even in a post-COVID world, it’s understandable that most of us are expected to keep shopping online frequently, mainly due to comfort and convenience. But during this online spending boom, just remember to safeguard your credit card data while shopping.
Elly Rodgers
