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How does a masked credit card work?

Smiling couple using digital tablet and credit card at home
adriaticfoto / Shutterstock

A masked credit card — sometimes called a virtual credit card — isn’t a new, physical rectangle you can put in your wallet. A masked card is a digital service you use in combination with your normal card.

When you mask your card, you get a new unique card number, expiration date and security code that you can use to make purchases. Those details lead to a dummy account that will, in turn, charge your real credit card or bank account.

To online sellers, masked credit cards look and operate just like regular cards. However, they don’t contain your real information, which unscrupulous merchants and fraudsters can’t see.

Depending on your needs, you can use a masked card for multiple payments or treat it like a “burner” for a single purchase. You can also put a spending cap on the new number you create, give it a specific expiration date or freeze or cancel it at any time.

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Are masked credit cards really safe?

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Using a masked credit card is considered safer than using a normal one because you’re only trusting your real details to a single, secure company instead of every store and service you use online. Many famous companies have suffered through serious data breaches, so don’t assume a store is safe just because it’s a household name.

If you’re shopping on a website without knowing how seriously it takes security, you can generate a one-time number to make your purchase. After you use that combination once, it stops being valid — even if fraudsters get their hands on it.

No solution is foolproof. If you don’t use a one-time burner card, and your new number is stolen before it expires, someone could conceivably run up charges on your account.

But even if that happens, they won’t have access to your real credit card. Your financial information will stay private, and thanks to the Truth in Lending Act, your liability for any unauthorized purchases is limited to $50 so long as you report the fraud quickly.

The pros of using a masked credit card

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A little bit of protection can give you a lot of peace of mind. Here are some of the benefits of using a masked credit card:

  • Shield your account number. The main purpose of using a disguised credit card is that in the event of a data breach, your real credit card number stays hidden. You can just close your masked credit card and get a new one. Fraudsters will never get their hands on your genuine financial information.
  • Keep personal information hidden. Virtual cards can also conceal other sensitive data, like your name and your billing address, which reduces the risk of any of your personal information falling into the wrong hands. The last thing you want is your credit score taking a hit when your regular card is compromised.
  • Help control your spending. Going a bit overboard with online shopping? You can put a limit on your card to help stay within your budget. Once you reach the limit, the masked credit card will just stop working. It also comes in handy for subscriptions: set a limit on the amount a service is able to charge your virtual card each month, so there’s no risk that the price will get jacked up without you knowing it.
  • Share your card. Whether for business or between family members, you can use a masked number when sharing a card. That way others can make purchases on your credit card securely. Generate a number that’s valid to a certain date or maximum dollar amount and cancel it anytime.

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The cons of using a masked credit card

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The protection is great, but there are still some drawbacks that will probably keep you from using a cloaked card all the time:

  • Returns and reservations could be more difficult. Typically, stores want to refund your purchases to the same card — but they won’t be able to do that if you used a one-time number. It’s also harder to prove it was you who reserved that hotel room if your name isn’t associated with the card. To make these interactions go smoothly, keep all the records of your digital purchases when using a masked credit card.
  • You can’t use them offline. The 2013 Target breach, for example, affected millions of in-store shoppers, but unfortunately masked credit cards are only available in the digital world. Until the day masked cards come in a physical form, their benefits will be limited to online shopping.
  • It’s harder to earn credit card points. If you normally collect points from shopping at the grocery stores or pumping gas, you might miss out on valuable cash back or other rewards. When you make purchases on a masked card, your service provider acts as the buyer instead.
  • It could slow you down. Does convenience outweigh security sometimes? Using a masked credit card will usually add a step every time you make a purchase online. Depending on your provider, you may need to log into a separate portal each time, rather simply adding your card number or using stored card information.

How do I get a masked credit card?

Asian woman using laptop and credit card shopping ecommerce,
Tirachard Kumtanom / Shutterstock

Guarding against fraud doesn’t have to be inconvenient — and it doesn’t have to cost you a penny.

A website called Privacy provides free virtual cards to make your online purchases more secure.

It only takes a few minutes to install Privacy as a browser extension for Google Chrome or Firefox, and once it’s set up you can generate virtual cards with just one click.

The service even has a mobile app to help protect your financial details when you’re shopping on your phone.

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About the Author

Ethan Rotberg

Ethan Rotberg

Former Reporter

Ethan Rotberg was formerly a staff reporter at MoneyWise. His background includes nearly 15 years as a writer, editor, designer and communications professional. He loves storytelling, from feature writing to narrative podcasts. His work has appeared in the Toronto Star, CPA Canada and Metro, among others.

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