Go Virtual for Safer Online Shopping

Even if you're diligent in protecting your PC from every online hazard imaginable, you may not be able to do much about the biggest threat to your data--and to your finances. Thieves can tap into millions of financial records belonging to companies that charge or process credit cards.

The good news is that you can make your recorded credit card number worthless to any thief. Virtual credit card numbers--which you can get from some banks, PayPal, and a new online service--allow for additional fraud protections.

Banks typically offer fraud liability protection to guard against stolen or misused card numbers, but the hassle of proving your innocence and dealing with the aftermath might be just as painful as losing your money. Virtual credit card numbers keep you from having to deal with either scenario. Merchants process virtual numbers just as they would a standard card number, and you can use the numbers for online or phone purchases that don't require showing your card. However, if you're buying will-call tickets or anything else that requires you to present the card used to make the purchase, you shouldn't use a virtual number.

Virtual credit card numbers may be your best defense against credit card theft these days. A regular credit card number has real value on the Internet's black market, and data breaches in which criminals steal such numbers are on the rise. In August, the U.S. Department of Justice charged a Florida man with taking part in a huge heist of financial data from credit card processor Heartland Payment Systems. By the time authorities caught that suspect, the damage may have already been done: The stolen numbers almost certainly changed hands and appeared on underground sites that offer card numbers for a mere $2 each.

A crook who steals a virtual credit card number, however, gets only a meaningless string of numbers. If you have a credit card (not a debit card) from Bank of America, Citibank, or Discover, or if you use PayPal, you already have free access to the feature. A new online service called Shop Shield also provides various levels of protection.

All of those offerings add an extra step to any purchase, since you must first create a new card number through a banking site, desktop software, or a browser plug-in. That extra step is worth it, though, as every virtual number is tied to the first merchant that uses it, so any subsequent charges to the same virtual number are denied. Other options may allow you to set a spending limit or an expiration date.

How to Create a Virtual Card Number

Bank of America cardholders can create a virtual card number by logging in to the online banking site, clicking the View Options link to the right of the credit card account, and then choosing Create a ShopSafe account number. From there, you can set a spending limit and expiration date. Head to Bank of America's site for more on ShopSafe.

If you have a Discover card, you create a virtual number via Discover's Secure Online Account Number page. Discover also offers downloadable software for Windows that runs from the system tray. (Click the Download Now button under Desktop Version on the same Web page.) The software can pop up to allow you to create a virtual card number when you're making an online purchase, and it can fill in forms.

For Citibank, log in to online banking and click on Virtual Account Numbers in the upper-right corner. You can also download software by logging in to citicards.com or universalcard.com, selecting Get a Virtual Account Number from the 'Tools and Services' drop-down menu, and then clicking Download Now. Citi's software works much the same as Discover's desktop app does.

PayPal users can grab a browser plug-in for Internet Explorer or Firefox (only for Windows) by logging in to their account, choosing Products & Services, and then clicking the PayPal Plug-in link under 'More Products and Services'. The plug-in adds an icon to the upper-right corner of the Web browser with drop-down menu options to create a Secure Card virtual number and perform other PayPal tasks.

Virtual Numbers, Virtual Profiles

You can tie Shop Shield to any credit card or checking account. It creates not only a virtual credit card number but also a faux e-mail address, name, and other contact information for use with the number. You can create such profiles either at the company's site or through a Firefox add-on (installed as part of your signing up at the site; an add-on for IE is in the works). Once installed, the add-on recognizes shopping sites and autofill forms. Shop Shield offers a free level of service linked to checking accounts; a pay-as-you-go service for debit and credit cards ($1.99 per use, plus a $0.49 charge for transactions less than $25); and an "unlimited" service for checking, debit, and credit-card accounts, priced at $99 annually.

Soon, you'll likely be able to add some benefits of virtual numbers, such as spending limits and merchant restrictions, to regular credit cards and debit cards. MasterCard, which bought the company that licenses the software used for most virtual credit card offerings, says it is working on a service with both features. In the meantime, virtual credit card numbers will keep potential data thieves chasing a moving target.

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