This free tool just saved me $200
How (and why) to use virtual payment cards
Plus: Scratchgate, Spotify’s free upgrade, and Google’s new desktop app
Jared Newman | 
Hey there! I’m Jared Newman, a longtime tech journalist, and you’re reading the free edition of Advisorator, my weekly tech advice newsletter. Did someone share this newsletter with you? Sign up to get it every Tuesday.
Let me tell you about how a virtual credit card just saved me nearly $200 in unexpected charges.
Over the summer, my wife and I signed up for three-month trials to Clear+. We wouldn’t normally pay for this kind of thing, but we had a lot of travel coming up, and being able to speed through airport security for free seemed like too good of an opportunity to pass up. Still, I was wary of being billed $199 per person if we neglected to cancel before the trial period ended.
So instead of putting actual credit cards on file, we signed up with virtual Privacy Cards, which allow you to set strict spending limits on each card. While we did in fact attempt to cancel Clear+ during the trial period, customer service offered my wife an extra two months free as a retention tactic—and then tried to charge her card $199 on the regular renewal date anyway. Had we not used virtual cards with spending limits, we’d have gotten burned.
I’ve previously written about Privacy Cards in the context of streaming, but I’ve since found it useful in other scenarios as well, and it’s been a while since I’ve done an explainer on how it all works. Here’s what you need to know so you can avoid surprise charges yourself.
How virtual cards work
Privacy connects to your checking account or debit card, then provides virtual cards that draw from those payment sources. That means you can set up separate cards for each merchant, with spending limits for each card.
While some other card providers such as Capital One provide a similar service, Privacy doesn’t depend on having any other type of credit card. It has a generous free tier that has served my purposes for years, letting you create up to 12 new cards per month. (If you want to use more than that, or get extra features such as category-locked cards, you’ll need a subscription starting at $5 per month.)
After creating an account, you must link a checking account or debit card through Plaid, a third-party service that connects banks with various financial tools. It’s generally considered safe and is widely used by other finance apps such as Venmo and Cash App.
Setting up a card is fairly simple:
- Hit “New Card” on the Privacy.com website.
- Choose either a Single-Use or (for recurring charges) a Merchant-Locked card.
- Give it a name and optionally pick a logo so you can remember what it’s for.
- Hit the “Add Spend Limit” button.
- Set an amount and have it apply per card, per transaction, per month, or per year.
Now, you can click on the card to see its full card number, expiration date, and security card. Enter these into any online payment form (along with your regular ZIP code) like you would with a regular card. You can always edit the spending limits later or delete a card to cut off all future transactions.
Where to use a virtual card
Virtual cards come in handy for all kinds of uses, beyond just streaming services:
- Worry-free trials: For subscription services that end your free trial immediately after cancellation, you can use a virtual card to enjoy the full trial period without being auto-billed at the end. (Note: Even for free trials, you should still set a spending limit of $1 or $2, otherwise your card may be declined.)
- Promo price protection: Privacy.com is especially handy for subscription services that offer multi-month discounts. Set a monthly spending limit to match the discount price, and you won’t get bill shock when the promo period ends.
- Billing reminders: In a perfect world, subscription providers would email you every time they charged your card (like Advisorator does for paying members). For those that don’t, Privacy.com can keep you informed, as it sends emails by default for every transaction.
- Untrustworthy merchants: I once signed up for a premium trial on a download site that’s widely used by live concert bootleggers, and for months afterwards I was hit with all kinds of suspicious charge attempts. Using a virtual card prevented those scammers from ever receiving a penny.
- Difficult-to-cancel services: While visiting London over the summer, I set my wife up with a cheap eSIM card from a local prepaid provider, but cancelling it from the provider’s U.S. website after the trip was seemingly impossible. Shutting off the virtual card we used was a lot easier than trying to deal with customer service.
While I wouldn’t use virtual cards explicitly for this purpose, I’ve also found that some streaming providers will continue your subscription for weeks or even months after your payment method fails. This has happened to me with Fubo, HBO Max, and Paramount+ over the past year.
When to use a regular card instead
While Privacy.com has been an invaluable tool for me, I don’t use it for everything, and not just because of the monthly card creation limits. There are some cases where you’d better off using a regular card instead:
- Postpaid services: Do not use virtual cards for any service that might refer you to a collections agency over unpaid bills. Those include utilities, home internet, and postpaid wireless plans. (Streaming services like Netflix and Hulu will simply cancel your subscription without penalty.)
- Cash back rewards: Privacy.com only offers cash back with its $10 per month “Pro” plan, and the rewards are a mere 1%. I’ll keep using regular cards with better cash back on things like restaurants and groceries.
- In-person transactions: Privacy.com charges $10 per month for cards that you can add to your phone’s digital wallet and use anywhere. I’d rather just use Apple Pay or Google Pay with my existing cards.
Setting up and using virtual cards takes some extra time and consideration, but they’re worth using any time a surprise charge might come back and bite you. If I hadn’t done so with Clear+, I would’ve been $199 poorer.
Thanks for reading! I appreciate your patience this week as I navigated Rosh Hashanah and the requisite travel to be with family. We’ll be back to the usual Tuesday publishing schedule next week.
Until then,
Jared
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