Single Use Credit Cards – Is it Right For You?

In just the past five years, online holiday sales have gone through the figurative roof as Black Friday’s dominance has been challenged by Cyber Monday.  Many consumers are turning to the internet for shopping needs because of convenience, the plethora of deals, and the fact that you don’t have to stalk a parking spot at the local mall like a hunterchasing his prey.  But with the added benefits of this new shopping avenue, new dangers have also cropped up of which consumers must be cognizant so that they can avoid them.  One way to avoid these pitfalls is with single-use credit cards.

Obviously, we have all heard the horror stories that go with putting out sensitive material online such as credit card numbers.  Many people have heard of companies being breached and having cyber thieves gain access to credit card numbers and other personal data.  Even the government isn’t completely safe.  Recently, the state of South Carolina was hacked and payment information stolen and other data was mined from people who had paid their state income taxes online.

So how can you take advantage of the ease of online shopping without becoming a victim?  Enter the wonders of the virtual credit card.  Bank of America, Citibank, and Discover are among the major card companies which are currently offering this awesome service.  Essentially, you sign up for the program and can set a maximum dollar amount and time frame that this card will be valid.  Once you have reached the time limit or maximum, the card is no longer usable.  This prevents thieves from going on a huge spending spree should they get access to your card because you can set the amount for just what you plan to spend online.  (This is another great idea that those of us on a budget can appreciate during the holidays.  Set your limit at exactly what you budget you can afford for Christmas presents and your card will close out when you reach that amount.)  When you buy something online, you enter the virtual card number and not your real, physical card number.  If the hackers get their hands on this information, you may be out the limit you set on your virtual card, but it is much better than having them able to run up thousands on your actual credit card.  You can also use this to set up limits on shared accounts such as Itunes, Amazon Kindle, or Barnes and Noble Nook so that your children can’t run up huge bills indiscriminately purchasing apps without your knowledge or approval.  As some have noted, the only downside to this is that you have no physical credit card to show for purchases so if you are ordering something online (such as theater tickets) you will still have to use a real credit card so that you can show your card at the ticket window to make your claim.

Peace on earth is the dream of everyone during the holidays.  But peace of mind is something that you can attain when shopping online.  Virtual credit cards on the end-all-be-all of subverting online thieves.  But they are another tool in the arsenal to staying safe, particularly this holiday season.

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