Cybersecurity is a constant concern for retailers that store consumer data online. Even so, hackers are persistent, and data breaches have happened to some of the largest retailers in the world. When you use your credit card or debit card to shop online, you run the risk of your account information falling into the wrong hands.

Some credit card companies offer virtual card numbers that can keep your accounts safe. These one-time use card numbers eliminate the need to use your physical card number, protecting your account.

How Virtual Card Numbers Work

If your credit card or debit card information is stolen online, thieves can use it to make unauthorized purchases or even empty your bank account. Credit card companies that offer virtual card numbers reduce your exposure because you won’t have to use your real card number.

The details vary between credit card companies, but the basics are the same. When you’re ready to shop online, you can request a virtual credit card number from your card provider. You will have the option to set a custom spending limit and expiration date for that number.

The card provider will then send you a temporary, 16-digit virtual credit card number that is linked to your account. You can use that number to make online purchases, and the charges will show up on your credit card statement like normal.

However, if a thief gets a hold of your virtual card number, the damage is minimal. The temporary number can’t be used to identify your permanent credit card number. It also has a predetermined spending limit and you can set an impending expiration date to render the number useless after a brief period of time.

A few credit card companies, such as Bank of America and Citi, offer the virtual card number service free to their customers. There are also third party companies that offer virtual card services, which can be linked to your existing credit card or even your bank account.

The Benefits of Virtual Card Numbers

You should remember that your liability for unauthorized credit card charges is already pretty low. Under federal law, you can never be held liable for more than $50 in unauthorized charges. That liability drops to $0 if it is your card number, not your physical card, that is lost or stolen, or if you report your card missing before unauthorized charges occur. Many credit card companies will even cover that $50 liability at no cost to you.

Still, a stolen credit card number means you will have to spend time replacing your card, disputing charges, and even filing a police report in some cases. You’ll also have to update every account with your stolen credit card number on file. A virtual credit card can eliminate these headaches.

If you typically use your debit card number to shop online, the benefits of a virtual card number are much clearer. You could be liable for much more than $50; in fact, you could be responsible for all losses if you don’t report your card missing in a timely fashion. It’s generally a good idea to avoid using your debit card information online.

The Limits of Virtual Card Numbers

Not all credit card companies offer virtual card numbers – you should check with your credit card provider. While some third party virtual card services exist, their level of service might vary and you’ll have to sign up for an additional account.

If you already use your credit card for online shopping, virtual card numbers aren’t strictly necessary. You can’t be held responsible for more than $50 in unauthorized charges, and that liability drops to $0 in many cases.

Finally, virtual card numbers don’t completely protect you from theft. Your physical card could still be stolen, and virtual card numbers don’t protect you from identity theft. Even if you use virtual card numbers, you should still monitor your credit reports, bank account statements, and credit card statements closely for signs of fraud or theft.