Using Virtual Credit

Cards in the Fight Against Identity Theft

Identity

theft. It can be a consumer’s worst nightmare — someone uses

your name, your Social Security number, your credit card number

to rack up thousands of dollars in bills, potentially leaving

you to pay for a criminal’s spending. Almost as bad, it could

take months to straighten out the damage, convincing utilities

that it wasn’t really you that started up new service, convincing

credit card companies that it wasn’t you who bought that new

refrigerator, convincing reporting agencies that it’s not your

credit record that should be dinged for unpaid bills.

While

identity thieves use multiple tactics to get their hands on

your personal information, stealing credit card numbers is a

key component of their strategy. Besides the obvious advice

to keep your credit cards closely guarded, there is another

option you can use to thwart identity thieves — virtual credit

cards.

Virtual

credit cards are actually virtual credit card numbers

— temporary numbers tied to “real” credit cards —

which can be used for online or phone purchases, but can not

be stolen and used elsewhere by thieves.

Virtual

credit cards work in slightly different ways depending on the

credit card issuer, but the idea is the same. You contact your

credit card company and ask for a virtual credit card number.

This temporary number can be used for a single purchase or it

might be good for purchases only at a single retailer. Your

credit card company treats this number just like your regular

credit card number, putting your charges with a virtual number

on your regular credit card bill — but the virtual number is

useless to thieves, because no further purchases can be made

with it.

Citibank

and Discover are two of the major credit card issuers that offer

virtual credit card numbers. While these and other credit card

issuers will rarely charge you more than $50 if your credit

card is stolen, virtual credit cards can still be helpful in

preventing larger identity theft attempts — it is when a thief

puts together many different pieces of your personal information

that identity theft becomes so dangerous. Keeping your credit

card number safe can stop a thief from opening utility or other

accounts in your name, as credit card numbers are often used

as a form of personal identification in these transactions.

Virtual

credit cards require a bit more effort than simply pulling your

card out of your wallet. But, considering the time, energy and

money a theft of your identity could cost, they just might be

worth it.

Published 12/05/05 (Modified 05/07/12)