I have worked in Credit Card Acquiring for about 18 years and I am just giving my personal opinion as a person who knows a little about Credit Cards. I am not an expert, just have a lot of experience. Take this advice as you would any other on the internet and do a little research.
This product would protect you if you had a keylogger installed. All this device is doing is reading the card data off the credit card and encrypting it from the point of entry (card reader) and inserting it electronically in the fields on the website. All Credit cards have a shared Magnetic Stripe format (Track 1 or 2 for Bank Cards, Amex, Discover, etc.). This enables the reader to know what fields are present and correctly take Card Number, Expiration Date, and Your Name (name is on Track 1 only, not Track 2) as it appears on the Card. You would still potentially have to enter the Secure 3 digit (4digit for Amex and some Discover cards) number on the back panel (or front on Amex and some Discover) because that number is not stored on the Magnetic Stripe. To get really technical, there are up to 3 Security Codes on a Credit card. One is on the Magnetic Stripe, Second on back Panel (except Amex Discover), and the third is on the Chip if the card has a Chip. All of these Card Security Values are not allowed to match and are derived by 3 different algorithmic methods as mandated by the Card Association (MC, Visa, Amex, Discover, etc.). This product would insure that from the time the card number was entered (swiped on device) until the time it was inserted on the website, it would never be "in the clear", or readable by someone with software inserted on your PC. For our friends that are nervous to buy on the internet, who have a PC that may have a virus or keyloggers, or are not super PC savvy, this product would be great. It would give you a way to securely keep your Credit Card Number hidden. However, if you have something that can read your card on your PC, there is a very high level of chance that it can read your User ID and Password for the sites you use (including the ones you make purchases at). So while this may encrypt your Credit Card on your PC, your User ID and Password for all sites would still be exposed and vulnerable if you have a keylogger. This would make it harder to immediately use your card or get your card number, but someone could still switch mailing addresses and have purchases sent to their address or a "drop".
You should take a look at a free product called KeyScrambler. "KeyScrambler encrypts your keystrokes at the keyboard driver level and decrypts them at the destination application, giving keyloggers "scrambled," useless keys to record." When it sees a sensitive field like User ID, Password, and Credit card data, it makes the value impossible to read. Best of all, it is FREE. There are 3 different versions, but the Personal version is free. It is available for Firefox and Internet Explorer and I use it on all my PCs. It is useful all the time, not just when you are entering your card number and lights up Green when it is securing a field or data for you. Go here for more info on KeyScrambler http://www.qfxsoftware.com/index.html
I would also recommend Microsoft’s free “Security Essentials” for people that do not have Virus protection and use a Microsoft based PC. I use this on my Home PC and it is not very intrusive and my wife and kids do not blindly click “ignore” when a problem is found like some programs. It is free and can be found at http://www.microsoft.com/security_essentials/
I would also recommend using a Real Credit Card, and not a Debit Card or Checking Card that is tied to your Checking account. While they both offer the same level of protection against fraud, it is much easier to live your life if you are not waiting for your Bank to put “Real” money back into your Checking account. A Credit Card is exactly that, a line of Credit granted you. A Debit card is your money in a Checking account that you may need immediately to pay pays and buy food. My $0.02.
This is my own personal opinion and I do not work for KeyScrambler or Microsoft. While this product may work for you and does add a good level of security for your Credit card data, you should still take these small steps to insure your PC is healthly and secure all the time, not just when making purchases with your credit card.