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August 06, 2021

The case for 'virtual' credit cards

By Jason Buckland, Sympatico / MSN Finance

Over the years, it’s likely we’ve all made an Internet purchase we haven’t exactly been giddy to use our Visa for.

And it could have been a number of things that drew our apprehension. Maybe it was the weight loss pills from that shady overseas pharmacist, a curious response to a male enhancement trial offer or that annual membership to your favourite d**-f******-and-c***e-a**-s**ts fetish website.

In any case, there is a safe alternative to protect your credit card info from less-than-reputable online sellers and it turns out not many of us are taking advantage.

George Gombossy of the Chicago Tribune points to one-time use or “virtual” credit cards as an overlooked weapon we can all use to combat any unauthorized charges from popping up on our monthly statements.

The virtual cards, offered by many banks and online services like PayPal, work like a pay-as-you-go-type transaction. Each time you make a purchase, you can generate a new credit card number, load the temporary account up with money and only expose yourself to the risk of spending that pre-determined amount.

Now, you might be saying to yourself, Well, Internet shopping has come along way and the chances of fraud ain’t what they used to be. And you’re right – that doesn’t, however, mean one-time use cards can’t cover your behind, anyway.

Say you’re using your credit card for a trial purchase. Like, say, for a teeth whitener or newspaper/magazine subscription. What do both of those things have in common?

They’re both likely going to ask for your credit card number to “cover only shipping and handling” for your free sample, right? Only, problem is, purchases like that have provisions in them where you need to manually cancel the transaction to stop receiving the service.

This doesn’t sound like much, but companies that work like this enjoy making it as tough as possible to actually find out how to void the deal.

With the virtual credit cards, though, you can set a limit for how much you authorize the seller to draw from your temporary account. So say you pump eight bucks onto your one-time card for a trial magazine subscription – now the retailer is blocked from scamming more cash from your real credit card because you forgot or didn’t know how to cancel your deal to keep getting an unwanted issue of SewPerfect every month for the next six years.

Anyhow, there’s a case to be made for virtual credit use, I think. As Gombossy suggests, check out the services available online to find “which is the most beneficial for you.”



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

James HaversJames Havers

James is the senior editor of MSN Money living in Toronto. He has worked for the Nikkei Shimbun (Tokyo),,, Canadian Business and other publications. Havers turned to journalism after teaching overseas.

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...