Avoid unexpected credit card charges with my ultimate online shopping hack

Buying stuff online can be a risky proposition. Sure, the big vendors do their best to make you feel safe, but what if you have to give up your credit card digits to a vendor you don’t know?

As it turns out, there’s a type of financial instrument — called a virtual card — that can help. A virtual debit card can be turned on and off, spending limits can be set, and create unique card numbers created.  

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Not only will a virtual card come in handy when shopping at unfamiliar online merchants, but you can also use it for those free trials that renew automatically — and can be difficult to cancel. Use a virtual card, allow it to have one charge, and then it shuts down. No unfair renewals. Similarly, you can use it to prevent overcharges on subscriptions. Set a maximum limit, and you won’t suddenly find yourself with a huge bill you must dispute.

I use a service that enables me to limit how my card is charged without my express permission. Privacy.com lets me limit the amount that can be spent on any card I create, limit how many times a card can be used, and more. 

Let’s discuss how to get started, how the process works, and the benefits you get from Privacy.com.

Getting started with Privacy.com

To get started, point your browser to Privacy.com.  Note: Privacy asks you for some personal information, including your name, residential address, date of birth, and possibly a copy of your driver’s license. They may also request other documents.

Why? The company explains its reasoning for these fairly intrusive requests:

To help the government fight the funding of terrorism and money laundering activities, federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens a Privacy Account.

You’ll also need to set up a funding source. This is the account from which Privacy will pull your money in order to pay it out to the vendor you’re paying. Remember that although Privacy will issue you credit card numbers, it does not provide credit. Everything you pay using Privacy will be removed from your bank account directly or via a debit card linked to your bank account.

Those are your two funding source possibilities: a personal bank account or its associated debit card. Privacy — at least the free version — will not work with a business bank account. You’ll be asked for a funding source when you first create your Privacy account. If you later want to change sources, go to the Account menu item under the little head icon in the upper-right corner of the page.

You can have multiple bank accounts as funding sources, but you can’t have multiple debit cards, and you can’t have both a bank account and a debit card.

It’s been a while, but I recall it taking a few days after I signed up for Privacy to fully enable my account. So, if you plan on using this service, don’t wait until the last minute when you really need it.

Using Privacy.com’s virtual credit cards

As you can see, I have two Privacy cards set up. They are for two hosting providers I was reviewing, where I needed to provide a card number. 

These two cards are currently active with a total spend limit of $1. I could have set it up for any amount I wanted, but I chose $1 since it should never actually be used. If I change my mind, I can change the transaction limit later.

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Before we create a new card, let’s do a little housekeeping with these two cards. First, I want to pause the Bluehost card.

Pausing prevents the card from being charged but keeps the card number viable in case I want to turn it back on later. On the other hand, let’s say I want to close the WP Engine card. Using the same drop-down menu in the corner of the card, I can select Close.

This permanently retires the card number and shuts down the card. If I want to pay WP Engine again, I’ll need to use a different card number.

Now, let’s create a card. On the main dashboard, click Create Card. Notice that there are columns for Cards (showing open cards) and Activity (showing the last eight transactions).

Once you hit Create Card, you’ll be invited to create a Virtual Card. Privacy has paid plans that provide other services, like locking cards to certain purchase categories. In this article, I’m only showing the free plan, which has worked fine for me.

Click Virtual Card. Next, assign a name to describe the card. You can select from various brands; sometimes, the card’s graphic will reflect the brand. If you click the “See other popular cards” button, Privacy will give you a bunch of other brand logos.

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I’ve found that some brands, even though they’re not shown on that list (like Bluehost), will also be created with their proper logos. Don’t worry about whether or not the vendor you want to pay has a logo in Privacy or not. I’ve found their cards work equally well for giant vendors and the small companies I’ve had to work with over the years. For the free plan, each Privacy card is tied to a given vendor once it is used at that vendor. Once used, it can’t be used at any other vendor.

I went ahead and chose the nickname Boasty Hosty. As far as I know, there aren’t any hosting providers with that name, but it will serve as an example here.

Now that the Nickname is chosen let’s go ahead and click Create Card. You’ll see a card number, as well as what funding source is going to be applied to it.

Whenever you click on a card in the dashboard, you’ll see this detail screen. Here, you can easily see all transactions (including declines) and pause, close, and change the financial transaction limits.

The Transaction Limit area contains much of Privacy’s power. When you click on the words, this screen appears.

For a hosting provider review account, where I have to give my digits, I usually set a spending limit of $1. I also set the card as single-use, which means the card automatically terminates and ceases to exist the first time it’s charged.

You can also choose to set a spending limit per month (for example, no more than $20 per month), per year, per transaction (use it as often as needed, but never charge more than $5), and a total spend (when $100 is spent over the life of this card, stop).

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Remember that Privacy cards don’t have the same protections as credit cards. They work like debit cards. So, if you give a vendor unlimited use and that vendor overcharges you, that money will be removed from your account. I recommend always setting conservative spending limits.

Personally, I prefer the single-use option. I can issue a card for an amount I want to spend, and as soon as that card is charged, it shuts down. If I want to make another charge, I have to purposely create a new virtual card.

Just be aware that Privacy does assign certain usage limits for free accounts. If you plan on using this service a lot, be sure to read up on the limits assigned to your account.

That’s it. Beyond using Privacy cards for review accounts, I also often use virtual cards for software purchases when those purchases are out of the country. Most of the software vendors I’ve encountered are very much above board, but it gives me peace of mind knowing that whatever digits I share turn into a pumpkin at first use.

And, for the record, I’ve shut down the Boasty Hosty card already.

Will you use this service?

Have you ever been unexpectedly charged for a service you thought you had canceled? How do you usually protect your credit card information when dealing with unfamiliar online vendors?

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Have you tried using virtual credit cards like Privacy.com? If so, what has your experience been? Do you think services like this add an extra layer of security, or do you have other preferred methods for safeguarding your online purchases? Let us know in the comments below.

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