It seems like every time you turn around, there's news of a new data breach – and the breaches continue to get larger with time. When breaches reach the level of affecting millions and even billions of accounts, it's only a matter of time before your accounts are affected. How can you keep your accounts safe yet still enjoy the convenience of online shopping?

Some consumers are turning to virtual credit or debit cards that link to your existing credit card or bank account but allow you to issue separate, random card numbers that are good only for a single transaction or set of transactions. These cards are linked to your account but do not contain any of your account information, ensuring that your account information can't be stolen from the vendor.

Credit-based programs such as Citi's Virtual Account Numbers and Bank of America's ShopSafe® allow you to sign into your credit card account and set up virtual cards with temporary 16-digit account numbers and security dates. You must assign a maximum amount to each card along with an expiration date of up to one year from the activation date.

You can set up the card for a single transaction or set it up to handle recurring monthly payments. To handle recurring payments, you must make sure the card has the correct expiration date and a sufficient amount of funds to handle all payments.

If you like the single-use concept but prefer debit cards to credit cards, consider Privacy. Privacy links to your bank accounts and allows you to generate virtual accounts with disposable numbers to shield your debit card and bank account information.

Privacy virtual cards are linked to a particular merchant and may not be used elsewhere. In contrast to the virtual credit cards above, you don't have to set a transaction limit on your card – so you can set it up as a running virtual debit card dedicated to a particular merchant. You can still set transaction limits if you prefer – either per transaction, per period of time, or total transactions.

For single-purchase situations where you don't trust the vendor and aren't likely to use them again, Privacy allows you to create a true single-use "burner card" that is closed after the first transaction. The questionable vendor never sees anything but a disposable set of information good for a single transaction.

For single-use applications, you don't have to worry about fraudulent use – but in the case that one of your multi-use accounts are hit with unrecognizable charges, you can easily turn off that particular account and prevent further damage. If you would like to prevent identity theft, check out our credit monitoring service.

Are you a small business owner concerned about using your credit account for vendor payments? Small businesses can make use of virtual cards through the efforts of Visa and their partnership with Viewpost, a payment technology firm based in the Bay Area. You can eliminate the vulnerability of having your credit card account information stored with multiple vendors.

Virtual credit cards and debit cards are not perfect. While the single-use mechanism protects your main card account number from being exposed with vendors, you are still dependent on the security of the credit card issuer and/or third-party companies like Privacy or Viewpost. However, they do greatly reduce your risk compared to your fellow consumers that give out primary credit/debit card information with every purchase.

Perhaps the one good thing about recent massive data breaches is that thieves have plenty of fresh consumer information from which to choose. Use virtual credit or debit cards to make your information relatively difficult to acquire, and thieves will simply move on to greener pastures.

If you want more credit, check out MoneyTips' list of credit card offers.


Photo ©iStockphoto.com/alengo

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