It’s a scary statistic: three-quarters of American retailers have reported data breaches, with more than half of them reporting stolen information in the last year alone. When you consider that even Equifax – one of the leading credit reporting agencies and a gatekeeper for every piece of identifying information you have – was hacked, it can leave you wondering just how to protect yourself.
Every time that you make a purchase online or in-store, you are risking your identity. If the retailer’s data is somehow compromised by thieves, everything from your credit card number to your address, phone number, and birthdate could be stolen. Thieves could then use this information to make fraudulent purchases on your card, open unauthorized accounts in your name, or use your identity in other nefarious ways.
So, how can you protect your information and your credit card account when you make purchases? Well, you could either pay exclusively in cash, or you could use a masked credit card.
What is a Masked Card?
Masked credit cards are temporary, one-time-use card numbers that are generated just to protect your information. Companies like Abine offer services (theirs is called Blur) that will create fake card numbers on demand. You can then use this temporary card and expiration date to make both in-store and online for the exact transaction you need.
Once you’ve made your purchase, that single-use card number is deactivated. This means that even if your retailer’s data is later breached, thieves won’t get your real information. Thus, they cannot steal your account number, won’t see your real address, etc.
When you use a masked credit card service, it is similar to buying a gift card. You will log in to the service’s platform, enter the amount of your desired transaction, and generate a temporary card number. This is then plugged into your merchant’s checkout page and you will complete your purchase as usual. The difference, of course, is that none of your information will be used. You will even enter the masking card company’s billing address and phone number rather than your own, for added peace of mind.
The Pros and Cons of Masked Cards
If you want to use a masked credit card, there are bot some upsides and a few downsides to keep in mind.
The pros, of course, start with the fact that you are protecting your identifying information. You no longer have to worry when a report comes out that yet another big retailer was hacked, or that personal information was stolen from a credit bureau. You will be able to rest easy knowing that any information thieves could get about your past transactions would involve one-time-use card numbers, another company’s billing address, and a phone number that’s not your own.
If you’re worried about identity theft, using a masked card is an excellent way to protect yourself. However, they’re not without negatives.
First off, masked card services aren’t free. The biggest company right now, Abine, offers its Blur Premium service for $3 a month. This seems like a very reasonable fee for protecting your information (they even offer email, web browsing, and phone number protections, which are included!), but it’s still an expense.
The other issue has to do with credit card rewards. If you are using specific credit cards in an attempt to rack up rewards in specific categories, a masking service will impact your earnings. Why? Well, when you request a masked card number for a transaction, the masking service will bill your credit card in that same amount. However, the masking company will actually be listed as the merchant, rather than the retailer you are using the masked card with.
So, if you’re buying food with a card that offers, say, 6% cash back at grocery stores, you’ll typically get 6% back on every dollar you spend. But if you use a masked card for that purchase instead, you won’t get 6% back. That’s because the grocer won’t be the merchant listed on your card statement.
While credit card rewards might not be worth the peace of mind that identity protection can provide, it’s important to at least keep this in mind when you go to use a masking service.
Masked credit cards are a relatively new idea in the world of credit cards and digital transactions. The idea is very promising, offering consumers an excellent way to hide their personal information while still buying online, in-stores, and even with questionable merchants. As more masked card providers enter the market, I’m sure the service will become even more convenient to use... and it will be interesting to see how masked cards will be able to improve identity theft statistics in the future.