A FEW YEARS AGO, I fulfilled a lifelong dream and traveled around the world. It was fascinating to see how people lived, worked and—more important—ate.
I sampled the cuisine of every country I visited. There was goulash in Hungary, hummus in Israel and escargot in France. In each location, I tried to learn how to ask for “the bill, please” in the local language. It’s “kérem a számlát” in Budapest, “חשבון בבקשה” in Tel Aviv (pronounced “khesh-bon be-va-ka-sha”), and “l’addition, s’il vous plait” in Paris. The smile on the server’s face was well worth the small effort of learning a few words of the local lingo.
In each case, I used a credit card to pay the bill. Note that I didn’t say pay the “check.” Outside the U.S., a check is that piece of paper old farts sign promising to pay someone else a certain amount of money. While the concept of using a credit card is ubiquitous worldwide, the actual use of one is far less consistent.
In Nordic countries, credit and debit card use is so pervasive that a law was passed in Sweden to ensure people could still get cash from a bank. The law’s purpose was to prevent the country from going completely cashless, which could be a problem during an electricity or internet outage.
Canada is also a prodigious user of credit cards, being named the “world’s most cashless country.” At the other end of the spectrum is one of the most advanced economies on earth, Germany. Often, when I asked for “die rechnung bitte,” I was politely informed that a kreditkarte was not accepted. I asked a Berliner why, and he informed me—in impeccable English—that “Germans like to feel their money.” I’m not exactly sure what he meant, but I think it had to do with Germans not trusting credit and liking to control their spending through the use of cold, hard währung—cash in English.
Germany’s bias against credit cards is so pronounced that it actively worked to prevent the abolition of the 500 euro note. It appears that in Germany, a businessman’s need to settle up after taking a large group of clients out for expensive schnitzel and schnaps had trumped concern that large bills might help facilitate terrorism. The 500 euro note is unsettlingly known as the “bin Laden” in Germany because of its link to terrorism financing. In 2019, Germany and Austria became the last countries to stop issuing the 500 euro note.
This German-American begs to disagree with the preference for cash-driven transactions. He loves his credit card for three obvious reasons. One, I can easily track my spending. Two, I don’t have to carry a large number of forints, שקלים or euros. Three, saving 2% with my Capital One Venture Card rewards me with a discount on every transaction.
Recently, I discovered another reason to love my credit card. Capital One offers the ability to use virtual credit cards. What’s a virtual credit card, you ask? Well, through a browser extension that I loaded on my good-enough HP computer, I can shop online without giving merchants my actual card number. Instead, for each online purchase, my team at Capital One creates a one-time virtual credit card number just for me.
I have found a virtual credit card has two benefits. First, the virtual card number is specific to each merchant, which provides me with an extra measure of security. If someone steals my virtual card number, it’s useless to the thief because it can’t be used again. This also eliminates the subsequent hassle of having to replace a stolen credit card.
A second benefit is it allows me to sign up for various introductory and promotional offers without worrying that I’ll be automatically re-upped. For example, I just received a free month of music from Spotify, with subsequent months billed at $9.99. I used a virtual credit card to sign up. The next day, after listening to the Boz Scaggs album, I locked the virtual card so it couldn’t be used again. I enjoyed 30 days of unlimited tunes without having to worry about remembering to cancel my subscription.
I used this same trial-offer technique to binge-watch Outlander on Starz for free. That Caitriona Balfe is a very good actress. I used the virtual card again to charge the “Top 12 Wines” with “BONUS Bottles & Glasses” from the WSJ Wine Club. The Alambrado Malbec 2020 was particularly juicy and jammy, by the way.
Currently, Citibank, Bank of America and Capital One offer virtual credit cards. If you carry a card from one of them, you definitely need to avail yourself of the service.
Michael Flack blogs at AfterActionReport.info. He’s a former naval officer and 20-year veteran of the oil and gas industry. Now retired, Mike enjoys traveling, blogging and spreadsheets. Check out his earlier articles.
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I’d like to point out that the CapitalOne virtual credit card browser extension is only available on Microsoft Edge and Google Chrome browsers. In my case, I have the Firefox and Safari browsers which aren’t yet supported.
However, if you have a CapOne credit card you can login to the website and be assigned a virtual credit card number for a pending purchase.
Also, any points you earn will be credited to your regular credit card account.
Phillip Stein, appreciate the clarification and details. I use Google Chrome and didn’t realize the Capital One virtual credit card wasn’t supported by all browsers.
I love Eno, Capital One’s virtual account number system. I use it for just about all my online transactions. I have about 40 different numbers, for everything from Amazon to utility bills and department stores. The correct credit card number for a particular vendor pops up automatically whenever I go to pay that bill. And for a new vendor, the option to create a new number appears whenever I approach payment options on the vendor’s website.
You can even use it overseas if you use a VPN so it looks like you’re in the U.S.
The only time it’s gotten a bit tricky is when I’ve done an in-store return of something I bought online, and the store employee wanted to see the credit card it was charged to. You can call up your virtual credit cards on the Capital One site, so in that case I printed out the virtual card for that vendor to show in-store.
Lynne, thanks for the further details. Never had to do an in-store return of an online purchase – now I can prepare myself. Thanks!
I’ve been using CapitalOne virtual cards for several years. Their browser extension will even pop up and offer to create one for me when it senses that a web page is asking for credit card information.
From what I’ve found online, Bank of America stopped offering their similar service in 2019. They still have a product that they call a virtual credit card, but it’s for electronic wallets and doesn’t generate a different “card” for each merchant.
As for cash, I used to go to an ATM and withdraw $200, which would typically last me over a year. I don’t think that I’ve withdrawn any cash at all since before COVID.
Gary W, thanks for the Wells Fargo update. I think they made a bad decision as the virtual credit card benefit has made me a loyal Cap One customer.
Thanks Michael for an interesting article. I was unaware of virtual cards and really like that feature. I am a longtime WF customer and hope they get the virtual card soon. I do a lot more online transactions nowadays. I started using my CCs for all transactions when the pandemic began 2 years ago to have contactless transactions. I only use cash or debit card now when I have to which is rare. I rarely use my debit card and visit an ATM maybe once a year.
I never thought I would have 3 CCs. I use Costco VISA for their store (2%), restaurants/travel (3%) and gas (4%) and for warranty extension where it applies. Amex for groceries (6%) and WF Visa for everything else (1.5%). I get less than a $1,000 back a year from the cards but it is effortless to use the right card for a transaction and bill payment is automated.
Now if I could only get my wife to use the right card for transactions. Ha!
Jerry Pinkard, you may want to put a new CC in your wallet. IRT your credit card system, I respect your organization and discipline.
Let’s not even think about “digital currency” disaster looming ahead of everyone who values some modicum of privacy. At this point, so far, I believe a subpoena is required for the LE authorities to view someone’s credit card account/bank account.
Chazooo, thanks for the feedback. I think you’re correct about the requirement for a subpoena – at least according to the most recent episode of Law & Order.
Thank you, Michael, for keeping us up to date with the world of credit cards. Bank of America also has virtual cards, and I will sign up. Still plan to use cash, though, for most in-store transactions. I’d like to think that the savings in fees add up for the proprietors.
Jo Bo, thanks for the comments and for helping out small business people.
Thank you for your article. I would say for Germany, businesses have been slow to adopt because of the 1-5% vendor fee which they need to pay to the CC companies. That is why most prefer cash or debit card. The trend is there, but if you don‘t want the hassle in taxis or local restaurants, have cash on hand. Most restaurants here are not megacorp chains but locally run with fresh ingredients, high quality, lower priced wine, etc. So, their margins are tight. I hope we can hold off the chains as long as possible here, for foods sake.
Sean Mooney, 5% does sound excessive.
Michael, thanks for the interesting article. I used to travel for business in southern Germany and remember their fondness for cash. I have been meaning to look into Capitol One’s virtual card service. My Capitol One card was recently hacked and I had to go through the annoyance of getting a new card and providing it to a number of vendors. Thanks for test running it for all of us!
Rick Connor, Munich did seem less “credit worthy” than Berlin. I cannot recommend the Cap One virtual card enough.