Now here's a new idea – put the buyer in complete control of their own debit card number. There seems to be some stigma to prepaid debit cards (sometimes called "reloadable" cards,) but from the identity theft standpoint this is a clever way to protect your money and shop online safely. Having a card number and personal identification number (PIN) is something we are all familiar with. But a "virtual card" is something worth giving serious consideration to as a way to protect your money while making online purchases. And wouldn't it be great if we could manage our account on our cell phone?
An Idea Bears Fruit
While you can get a prepaid card at your local Wal-Mart or CVS, these cards do not have a bank account associated with them. This means they may be declined if the merchant uses a bank account to verify the debit transaction. This limits your selection of services, since it's perfectly acceptable for a company to refuse payment by a prepaid card. But Horizons Bank has fixed that with their new Mango® card.
Since the Mango card has a bank account number and routing number behind it, you can have your paycheck direct deposited. This means you don't have to pay anything to load the card with money. This functions like a regular credit card at any checkout, and has the benefit of declining if you do not have enough funds on the card.
By logging into their website, you can create another card number, a "virtual card". The virtual card (v-card) has a 16-digit number, expiration date, and CCV number that are associated with your account. You can cancel this v-card with a click of a button, which means it's perfect for shopping online. (This is also a good number to use with sites or services that offer a 14-day trial period, and automatically charge your card if you don't cancel within that 14 days.)
You can also send money to your Mango account from another checking or savings account through electronic transfer. Mango won't charge you for this, but your bank probably will. And it will take a couple of days to go through. Used this way, you keep spending money separate from bill money. So if an identity thief actually gets your Mango card, he can only get what you put on it.
Mango also offers a feature to transfer money to another Mango card by text message. The transfer happens instantly, not even enough time to blink. This makes it easy to get money to a friend or relative quickly. You will want to delete your text messages, though, since the transfer is verified by PIN. The only drawback I found when I set up my own Mango account was the fact that I could only associate one phone number with the account. I'm guessing that the opposite is true as well, that you can only have one account per phone number.
Since a prepaid debit card won't authorize for more than you have on your account, you don't have to worry about NSF charges. Texting money to a friend only costs 50¢, you can't even buy a soda for that. If you put more than $500 on the card in a month (like a direct deposit,) there's no service fee, and right now you can even sign up for free. When it comes to handling your money, this is a fast easy way to immediately put up some protection, and since the program is in its infancy, the fees are almost nonexistent.
Prepaid debit cards are becoming more popular with people who do not want a bank account, or for some reason cannot get one. Since you can also check your account history and balance through text messages, prepaid cards have all the tools anyone would want to keep an eye on their account, even at 3:00 AM!