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Virtual Credit Card Number Makes Shopping On-line Safer

May 1, 2008
Millions of people each year are victims of identity theft. As a result consumers have become even more cautious about the use and release of their credit card information. Although many consumers want to enjoy the convenience of shopping on-line one-fifth of identity theft victims claim that on-line credit card use was the primary reason for their identity theft. The number one reason stated by many consumers for not shopping online is the fear of becoming a victim of identity theft.

How Can Consumer's Be Safer Shopping On-Line? In addition to the protection software such as antivirus, anti spyware and phishing protection, virtual credit cards may be one of the most inventive, and unknown services available by credit card companies to make shopping online that much safer.

A virtual credit card is replacement for your actual credit card number that can be used to make purchases on line. Some credit card providers call them "single-use card numbers." The number assigned is associated with your actual credit card number, but the only people aware of this are you and your credit card company. The virtual card acts as a protective layer between you, your purchase and your credit card information.

Several banks and credit card companies offer this service. Currently, DiscoverCard, Citi Bank and MBNA credit card companies each have a virtual credit card program. American Express testing one, and while consumers were pleased with it, the program was discontinued due to a lack of interest overall among customers.

Virtual credit cards are not a new concept. They have actually been available by many credit card providers for about approximately7 years, however, with the increase on credit card fraud and identity theft, they are getting more attention by both consumers and business.

SafeShop, is the name of MBNA's program, which has been available for approximately three years. "It's very popular with the people who use it," says Jim Donahue, spokesman for MBNA. "The only people who know the real number are you and us," Donahue.

Virtual Account Numbers, is the name given to Citibank's protection program. Users may set a monetary limit or an expiration date to be applied to the virtual credit card number. The virtual number is associated with your real credit card number, but the information is only available to the credit card holder. While shopping you use the "new" credit card number which is generated through a CitiBank program and designed specifically for this purchase. Many program request a credit card for trial services, and this credit card is especially useful for those events, as the consumer can set an expiration date and do not have to worry about cancelling, or unauthorized charges to be cleaned up later.

Discover offer a virtual credit card program entitled, Deskshop and according to Steve Furman of Discover, Deskshop has "grown at a fairly strong pace over the last six to eight months."

A BETA version of virtual credit card numbers is currently offered to a limited amount of PayPal customers. PayPal partnered with MasterCard to create its virtual credit card which offers such features as form fill, and expiration limits. PayPal's BETA version also offers a downloadable tool bar to make the process simpler, a security image to assure customers they are on the PayPal site and fraud alerts to warn users that a website is fraudulent. There is no additional charge for using the PayPal service.

Each providers program varies according to software and virtual credit card requests. However, all of the participating providers offer this service currently at no charge. Most providers offer this service through their website, and may require a download of specific software to complete your virtual credit card request and transaction. In many cases, consumer can choose an expiration date for some virtual credit cards that ends in one month or up to a year, as long as the date doesn't extend past the expiration date of the actual card. Discover's program expiration dates concur with the actual card. Some plans have spending limit options as well.

Virtual Credit Card numbers can be used for any purchase where credit cards are accepted including, on-line shopping, on-line bill pay, and shopping by mail or catalog order. You can even use it for many television or telephone shopping purchases such as QVC and HSN. However, purchases made online that require presentation of your credit card to pick up the purchase are not eligible, for example, "will call" game tickets.

Virtual credit cards may take some time to set up and some extra steps prior to completing your on-line purchase. However, these extra steps are a simple and cost effective compared to the steps consumers may have to take to clear their credit record and repair the damages made by identity theft due to credit card fraud.
About the Author
Lisa Carey is a contributing author for Identity Theft Secrets: prevention and protection. You can get tips on Identity theft protection, software, and monitoring your credit as well as learn more about the secrets used by identity thieves at the Identity Theft Secrets blog.
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