Privacy Blog

"Friends don’t let friends get spied on.' – Richard Stallman, President of the Free Software Foundation and longtime advocate of privacy in technology.

Why You Need a Temporary Credit Card Number

This may not be a true privacy issue but it certainly is important for security and peace of mind.

One of the things I detest about many web sites is that when you sign up for a subscription and pay with a credit card, the site automatically renews your subscription when it expires. Some web sites will automatically renew without even the courtesy of notifying you in advance. They keep on billing, and you cannot easily shut down the offending vendor.

Of course, you could cancel the credit card itself, but that usually isn’t convenient.

Another risk, although rare, is that someone might obtain your credit card number surreptitiously and make illegal charges against it. While all online charges are insured by the credit card companies so that you will never lose any money, going through the process of filing a claim and getting your money back can be inconvenient, at best. I think it is better to stop such an illegal transaction BEFORE it occurs.

Luckily, these problems are easily prevented if you take appropriate steps in advance.

First, let’s stop this “automatic renewal” process that is common on some web sites. I recently signed up for a web site’s daily newsletter that provides investment advice. The site asked for my credit card number, requesting payment for one month’s subscription. However, I did notice the small print on the sign-up page, stating that the site would automatically charge my credit card every month for renewal.

Such a policy apparently is perfectly legal, but I consider it inconvenient and a bit shady. I was signing up for something I had never seen before, something that I hoped would be worthwhile. In my mind, I was willing to pay for a month as a “trial subscription;” but I was not prepared to pay month after month for something I had not yet seen.

To be sure, there usually is a mechanism to cancel the subscription at any time. However, my past experience with such cancelation procedures is that they are often confusing and difficult to use. Sometimes there is no method to cancel online; you have to call a telephone number and talk to someone with a nearly undecipherable accent. I suspect many people want to cancel, encounter the difficult cancellation procedure, and then give up. They continue to pay for something they no longer want. I decided to not let that happen to me.

I solved this by using a credit card that expires at the end of this month. If someone tries to renew a subscription after the expiration date, the credit card bounces because it has expired. This prevents any attempted new charges. I know the company will need to contact me when the renewal time approaches. I can then make the decision whether or not I wish to renew. I am in the driver’s seat, not the company that wishes to charge my card.

Unfortunately, you might not have a credit card that expires this month. In fact, neither did I – until I created one. Luckily, that is easy to do with some credit cards. A number of credit card companies will allow each customer to generate his or her own limited version of their real credit card – a disposable version that cannot be used beyond the limit that the customer dictates. In the earlier example, I used one such disposable credit card to thwart a web site’s automatic subscription renewal.

Disposable credit cards are useful for many purposes. In many cases, you can limit the amount to be charged on the card. For instance, I might want to make an online purchase for $49.95. I can create a disposable credit card number that is authorized for a maximum total of $60 in charges. The extra ten dollars will handle shipping charges and sales tax, if any, but will block higher charges. If anyone attempts to charge the card for more than my $60 max, the transaction will be rejected by the credit card company. Also, if a dishonest employee of that company obtains my credit card number and tries to charge even more, the charge will be refused.

Some credit card companies, although not all, will also allow “one-time use” numbers. That is, the credit card number can only be used one time. If anyone tries to enter a second charge for the same card number, it will be rejected.

A “disposable” credit card number is sometimes called a “virtual” credit card number because it’s not quite real. There is no physical credit card. The credit card number only exists in the issuing bank’s servers. The beauty of a disposable credit card number is that it provides a method to avoid using your real credit card number. I always use Bank of America’s ShopSafe service (*see for details), but similar services are available from Citibank and others. PayPal, Chase, and Discover Card used to offer similar “virtual debit card programs,” have since dropped the programs.

This “one-time use” method replaces your real credit or debit card number with a new, or virtual, credit card number. While several options are available, I typically choose to create a new number for each online purchase I make. Each time I do this, I am issued a number that is good for one purchase only. If anyone steals the number and attempts to make a second purchase, the transaction is rejected by the credit card company with a status message of “card expired” or something similar. As a result, I never worry if someone steals the virtual credit card number. The virtual credit card number will be useless to the thief.

Another option provides for recurring monthly payments that allow you to securely manage your monthly bills. For instance, if your cell phone bill is consistently $65 a month, you can pay the bill with a virtual credit card number that allows $65 or perhaps $75 a month in charges, but rejects anything above that.

The virtual card numbers work just like regular credit card numbers, with one exception: they only work online. There is no actual card to swipe at the grocery store or any other in-person transaction. When ordering goods online with a virtual card number, you enter that number into the space that says “credit card number.” The merchant you are dealing with will never know that you used a virtual credit card number in place of a “real” number. In fact, the merchant (or the merchant’s dishonest employees) will never see your real credit card number. The numbers on a virtual card look about the same as the numbers on a plastic credit card.

On the down side, using a virtual credit card number certainly can feel inconvenient: you must take extra steps and spend some time online with your credit card provider. However, I would suggest the extra security and peace of mind are worth it.

Admittedly, all of this is an extra layer of security that may not be needed. After all, VISA, MasterCard, American Express, and Discover Card already offer 100% insurance for all online transactions. Even if your real credit card number does get stolen, the credit card companies will reimburse you for any losses incurred. While you will never lose any money, you may still have the hassle of filing claims and providing documentation. I prefer to use virtual credit card numbers to avoid problems BEFORE they happen.

Besides, this insurance against theft and fraudulent charges does not cover automatically-renewing subscriptions. The insurance only covers fraud.

Check with your current credit card provider to see if the company offers virtual credit card numbers. If not, you might consider switching to a different credit card company.

Here are some virtual credit card number providers I know about. If you know of others, please post a comment at the end of this article:

Bank of America credit cards offer ShopSafe®. Go to for information. ShopSafe® apparently works only with Bank of America credit cards, not with debit cards.

Citibank credit cards: I cannot test this as I don’t have a Citbank account. However, information about Citibank virtual credit cards may be found at

Discover® Card used to offer a virtual credit card generator, called a Secure Online Account Numbers. However, Discover Card discontinued the service early in 2014. Details may be found at

I mentioned earlier that PayPal also discontinued its virtual credit card numbers; however, any payment made by PayPal already enjoys many of the protections of virtual credit card numbers. First of all, the merchant (and the merchant’s dishonest employees) never see your real credit card number. Since they don’t know the credit card number, they cannot make any unauthorized charges. Next, all charges made by PayPal must be initiated by the buyer. Even though PayPal does offer an automatically-renewing subscription payment option, canceling the subscription payment at any time is a simple and straightforward process.

Finally, all credit card payments made by PayPal are actually insured twice: once by PayPal and once again by the credit card company. Even if anyone does succeed in ripping off a payment by PayPal, you always can get your money back.

Finally, any recurring payments funded by PayPal can be stopped by logging onto the PayPal site.

When given a choice of paying by credit card or by PayPal, I always choose PayPal because of the extra security. I have been a PayPal user for fifteen years, have made hundreds of online payments with PayPal, and have never had a problem with any of the payments.

Still, many web sites do not offer PayPal as a payment option. When PayPal is not available for online transactions, I feel much better using a disposable credit card number than risking unwanted charges to my real credit card. You might agree: It’s your credit card. Use it wisely!

Categories: Credit Cards

6 replies

  1. how does this affect your credit rating with Expedia and the others? I had always understood that opening more cards makes your points go down. Having some kind of tickler system in the computer to notify you of those pesky cancellation dates seems easier. And I agree there are companies which post no phone numbers so it is almost impossible to cancel. Thanks for the helpful article.


    • If your present credit card provider offers an option of adding a virtual credit card, you are not opening a new account. You are simply adding an extra card to an existing account. I doubt if that will affect your credit score. However, if you need to open a new account at a different bank, the new card(s) will be the same as opening a new account anyplace else.


  2. Does shopsafe allow me to create recurring cards? for example i own a business and to organize i want to generate a new card for each different expense so its easy to track. Can i do that?


  3. —> Does shopsafe allow me to create recurring cards?

    I don’t think so. However, you can read all the details about Shopsafe at:


  4. Have you heard this… “Once the card number expires, any additional charges that are applied against it should be denied, but that’s not always the case. For example, if you set up a recurring payment with a virtual card number, it could still show up on your credit card statement regardless of when it expired.”

    I have no idea if that’s true


    • As you stated, “Once the card number expires, any additional charges that are applied against it should be denied…” If you do have one of the rare exceptions, immediately contact the bank or company that issued the card and they will credit your account with the erroneous amount.


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