A virtual debit card is NOT a typical debit card. The main difference is that rather than using a PIN (personal identification number) to perform a transaction, a virtual debit card only uses the CVV2 code that is found on the back of the card. For example, when you order a pizza over the phone with your debit or credit card, they can’t ask for a pin, so they use the CVV2 code to authorize the transaction without actually swiping the card. A virtual debit card works the same way. It allows you to use the money that you have for online purchases and over-the-phone transactions, and at a few stores. Since they are relatively new and don’t have the PIN number attached to them, however, many stores won’t accept them as a form of payment.

There are a multitude of stores that still require that the card is swiped through the system, so a virtual debit card would not be of use there. However, if you do a lot of online banking, shopping, and over-the-phone transactions, it’s a great tool to have. You can allocate exactly how much money you want to spend, and spend it as you need while leaving your checking account in tact and not overspending.

The main goal of virtual debit card programs is to allow people who don’t have access to a checking account or credit card the opportunity to purchase items online and over the phone without having to worry about having a traditional account. By using the CVV2 code, the virtual debit card is authorized and the transaction is processed the same as a traditional card. For security reasons, when you get one of these cards, the CVV2 number will not be embossed on the card like it is on a regular debit or credit card. Instead, it will be mailed in a separate envelope much like a pin number for a debit card would, to protect your privacy and security. In the event your card is stolen, the thief cannot make a purchase without the CVV2 code, so they are very secure.

Since they’re not widely accepted in physical stores, the use of a virtual debit card does come with a few disadvantages. However, for online shopping and bill payments, as well as better money management and security, the virtual debit card is a great choice for those looking for an alternative to traditional payment methods.

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Places such as Spendone offer a virtual debit card as well as a physical debit card, so you can access your funds easily whether you’re online or out and about.