Virtual Credit Cards: What They Are and How to Use Them Safely

The world of payment options is constantly progressing. In the 1960s, when physical credit cards first became widely accepted, people gained a revolutionary new way to pay for their purchases. Today, shoppers have even ways to pay vendors, including a new evolution of the original credit card: virtual credit cards.

What Are Virtual Credit Cards and How Do They Work?

Virtual credit cards are very similar to traditional plastic credit cards. You still get a credit card number, security code, and expiration date — you just don’t get a physical card. Instead, you get a digital representation of your card that you can use for online purchases.

When you buy things with a virtual card, the credit card provider generates unique virtual credit card numbers for each transaction. The vendor charging your card doesn’t see your personal credit card information, just this unique number. That number expires when the transaction is complete. For an extra layer of protection, the vendor can only charge your virtual credit card for the approved dollar amount.

Physical cards don’t have these same security features. If someone steals your physical credit card or even just your credit card number, they can charge your account repeatedly. You have to count on your credit card company or yourself to notice the fraudulent charges and stop them.

Virtual credit cards aren’t only for personal use. Virtual business credit cards help businesses protect against payment fraud and manage their expenses.

Key Benefits of Using Virtual Credit Cards

If you already have physical credit cards, you may be wondering why you would need a virtual version. Though a virtual credit card serves more or less the same purpose as an actual card, it also offers additional benefits.

Enhanced Security and Fraud Protection

In 2024, there were over 400,000 cases of credit card fraud in the United States. The majority of credit card holders experienced at least one type of attempted fraud the year before.

Virtual credit cards offer enhanced security to protect you from these rampant fraud threats. Because the number you use for a virtual card changes with each online transaction, it’s much harder for criminals to steal your sensitive payment details. You don’t have to share your personal credit card number with every vendor you buy something from.

Plus, if there is a fraud concern with your virtual card, it’s easy to sign into your account and immediately deactivate it. That way, you limit the damage fraudsters can do.

Control Over Spending

If you struggle with sticking to a budget, virtual credit cards provide a solution. You can set spending limits across shopping categories to keep your spending in check. Your virtual card will keep track of your spending and only allow online payments up to the limits you set.

Adjust these limits as needed when your circumstances change. Not only will they help you with budgeting, but the limits also act as an additional layer of fraud protection. Anyone who tries to buy something with your card outside of your set limits will have the transaction rejected.

How To Get a Virtual Credit Card

If you’re interested in taking advantage of these benefits and expanding your payment options, apply for a virtual credit card using these steps:

1. Choose a virtual credit card provider. Several of the top physical credit card issuers, including Capital One, Citi, and American Express, also offer virtual cards. You may also be able to get a virtual card through banks or third-party providers like Airbase and Revolut.
2. Apply for a virtual card. If you choose a provider you don’t already have an account with, go to their website. Follow the instructions for applying for a virtual card. You may need to go through a credit check and application process, just like applying for a regular credit card. Once approved, you’ll have access to your new virtual card right away.
3. Activate your virtual credit card. If you are getting a virtual credit card through an existing account with a credit card provider, head to the provider’s website. Sign in and locate virtual card numbers in your account settings. You should see instructions for accessing your virtual credit card.
4. Download the app. You may need to download an additional app from your virtual credit card provider to access your card details. Sign in and follow any additional instructions to finalize your account.

Your virtual card should be active as soon as you complete these steps. The card provider will generate a credit card virtual number, expiration date, and security code to use as needed for your transactions.

Using Virtual Credit Cards for Secure Transactions

While the best credit cards offer some fraud protection, you can feel even more secure using virtual credit cards. A virtual credit card is one of your best options for completing secure transactions. The one-time use card numbers prevent merchants (and hackers) from being able to see and steal your actual credit information.

Limitations and Drawbacks To Consider

The best virtual credit cards have a lot to offer, but even they have limitations. Consider these drawbacks before using these cards.

Compatibility Issues With Some Merchants

Because virtual cards are still fairly new, some merchants may not accept them. If you do a lot of in-person shopping, you’re probably better off with a physical card. You also want to avoid using a virtual card for any online transactions that will eventually require you to show a physical card, like renting a hotel room or car.

Potential Challenges with Refunds and Returns

You sometimes need to provide your physical credit card or at least your credit card number to process refunds and returns. Because the virtual card numbers are single-use, you may run into problems authenticating your payment method later.

Best Virtual Credit Card Providers and Features

You have several options to choose from when it comes to virtual credit cards. Here are some of the top providers and what sets them apart.

Capital One

All Capital One account holders can access virtual card numbers for free with their accounts. All you have to do is install the “Eno from Captial One” browser extension and sign into your account. When you’re ready to check out while online shopping, the extension will generate a unique virtual card number to use on that site.

Citibank

Select Citi cardholders can access virtual account numbers for free by enrolling in the program. All the purchases you make with your virtual credit card will appear alongside purchases from your physical card in your monthly statement, making it easy to keep track of your spending.

US Bank

Corporate US Bank customers can access virtual credit cards to pay for business expenses. With these cards, users can instantly send virtual payment information to employees, track and manage expenses, and access B2B payment automation benefits — plus fraud protection.

Check credit card reviews for more details about the benefits different credit cards offer, including virtual card numbers.

Making Smart Financial Decisions With Virtual Credit Cards

Don’t be afraid to explore payment solutions to find something out there that might work better for you. A virtual credit card is one good option for better fraud protection and budget management.

MoneyAtlas helps make financial decisions like these easier with guides that compare all of your options. Explore credit cards with cash back and other benefits today.