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Comment by laurentdc | Hacker News Reader

Why the war on virtual cards?

My bank lets me create infinite "throwaway" credit cards that work for a single payment or up to a certain expiry date. They're great for never having to expose your real card number and keeping track of maximum spend. Are these classified as virtual cards? I use them all the time for Facebook ads and was planning to set up a AdWords campaign too, but now I'm worried

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The issue is that this is bypassing one of the things some companies use your credit card as - collateral.

For example, if you rent something, the credit card is used as a guarantee that you will return the item. If you don't, they can charge the card for the full price.

If you use virtual cards, they can't do that.

What is preventing them from placing a hold for the full price, then charging the card if the item is not returned? They get the same verification that they can be reimbursed if the item is not returned, but cannot make an arbitrary charge later on.

I would guess that for a large set of combinations of loaned items and customers’ typical credit card limits this would probably lead your customer to quickly hit his card limit and thus to a lot of frustration.

(Also, in many cases the potential ex-post charges are unknown and theoretically unlimited at the time of purchase, think e.g. of a car rental company wanting to charge you for your speeding tickets.)

Which bank if I may ask?

Bank of America allows me to do this for my credit card with them.

Capital One definitely does this (I used to work there and when we rolled it out it was considered quite innovative).

Intesa (Italy). Deutsche Bank offers them too iirc

Citi

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