I read on a4f that most freebie sites are banning these pre paid and virtual credit cards. I normally use one when doing online transactions to prevent any fraudulent activity/protect my identity.
Big War Bird
People are.were using these cards with very little money on then so that when a recurring charge attempted to collect insufficient funds would stop the transaction.
Yes, it's a bad idea. Some affiliate networks have reportedly banned, or are preparing to ban, their use due to rampant fraud.
Your identity isn't likely to be stolen from doing trial offers with reputable companies, any more so than using your CC anywhere else. The only possibility you have to deal with is stubborn advertisers who charge you after a cancellation, but those can be disputed with your CC issuer.
You can also use a PayPal debit card as long as your PayPal account is tied to your bank account. Reloadable pre-paid card like the GreenDot cards are probably acceptable, provided you keep enough money on there to cover any legitimate charges.
Bottom line is that if you owe a legitimate charge, there better be enough money on the card for it, otherwise you're considered guilty of offer fraud. You can thank the boatloads of idiots who behave this way for forcing them to crack down.