There aren't many things in life that are guaranteed. Unfortunately, having your credit card information stolen is one of the few exceptions to this rule. When retailers like Target are hacked or major companies like Equifax have data breaches, there's really no way to keep your information 100% safe. There are, however, steps you can take to help keep your information safe.
If you're shopping online, consider using a virtual account number or VAN. These are randomly generated credit card numbers that are linked back to your main account. You can set up VANS to be good for a period of time (up to a year in most cases), good for a specified dollar amount, or valid for a number of transactions. Once you are done using the VAN, simply delete the number and the account will no longer work.
When is using a VAN appropriate?
- If you're running a one-time payment at an unknown online retailer a VAN is a great tool. Sometimes you see a deal that is too good to pass up, but you're unfamiliar with the site. To help protect yourself from identity theft use a VAN.
- Signing-up for a subscription service - We've all been in a situation where we've cancelled an online subscription account and we continue to be charged. Yuck. Use a VAN for a subscription account and cancel the VAN when you hit the unsubscribe button from that box a month club. You won't have to worry about unwanted charges after you cancel your account. Take that Blue Apron. You should have never made us thought we were qualified to cook. Also, how dare you not send beer with the ingredient list.
- Worried about hidden charges? Use a VAN to limit transaction amounts to what you believe you are purchasing. If a retailer charges you more than you agreed to the charge will be declined. No one wants five Trumpy Bears to show up at their house when they only ordered one.
Keep in mind that your standard fraud liability coverage will still apply. If you select the credit option when at check out, you shouldn't be liable for any unauthorized charges in most cases. This doesn't change with a virtual account number. A VAN is used to help you avoid needing a new credit card number all together and risk compromising your entire account.
Are there downfalls? Always. Here are a few things to keep in mind when using a VAN.
- Multiple Transactions - If you limit your VAN to one transaction, you may run into issues on a site like Amazon. If your cart has items from more than one seller, everything after the first transaction will be declined. This can cause a lot of headaches, so be mindful of this.
- If you have to return an item, you may run into issues if the VAN is no longer active because it expired. It's hard to issue a refund to a card number if it no longer exists. If the VAN is still active, you shouldn't have an issue.
- Card verification required - Think RedBox. If you need to swipe your physical card to validate your purchase/identity, don't use a VAN. On the flip side, if you are renting a car or hotel a VAN shouldn't cause you any headaches. You can normally use another card or your ID to validate your online order if you explain that the number used to book the reservation was a temporary code. Keep in mind you'll likely need to leave a physical card for incidentals in this case, which probably negates your use of the VAN.
So, how do you use a virtual account number?
Great question. It depends on who you currently bank with. Right now, Capital One, Citi, and Bank of America are the major banks that provide access to VANs. Looking for a card from those banks? We'd recommend one of Bank of America's no annual fee cards as your VAN provider of choice.