Wednesday 4 July 2012

Consumer alert: "Virtual" credit cards?

A reader asked for our feelings on a "Virtual" credit card he encountered.

First observation: Their web site is It didn't take too much detective work (I guessed) to establish that identical sites exist for pretty much every other country you can think of

The web site suggests that this "virtual" credit card could be very useful.

However, the truth is more complicated. This is not, in any sense, a credit card. Nor is it a debit card. They are lying when they claim either of these things.

In fact these "virtual cards" are nothing more than a very expensive prepaid payment scheme. You pay an amount of money to get no more than a card number with a specific value that you can use online. Once you've used up that value you'll need to buy another one. You can't "top up" or recharge a "card" once you've bought it.

Just like a real credit card the facility is time-limited, having "an expiry of between 12 to 24 months". After 6 months you even have to pay to keep it. They say: "Is there any monthly maintenance fee to be paid?
No, there is no monthly fee for first six months afterwards $2.5 per month."

It's also fantastically expensive to buy this "credit". For instance a $10 "preloaded card" costs $40. To buy $100 you need to spend $160. $5,000 costs $6,500.

It wasn't difficult to find a number of complaints online about the company, many saying that the "card" doesn't actually work with many online suppliers and others saying that the whole thing is a scam.

This is way too suspicious to be trusted. The costs are enormous, there's no guarantee anyone will accept it and they make a big point of saying they require no ID from you. This is deeply dodgy.

Steer clear!

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