How to Use Virtual Credit Cards for Online Shopping

For a long time, I resisted online shopping for the fear of giving away my credit card to a merchant’s website. My online shopping was limited to only major well-known sites like Amazon, Walmart, and Orbitz. For other sites, I did not shop online for security and privacy reasons. But, 2 years ago, when we had a baby, we switched from shopping at brick & mortar stores to online retailers for convenience and better prices. Over the last two years, we purchased lots of electronics, small appliances, clothes, and household items from a variety of online sites─ both small and big retailers. Slowly, but surely, we became experts at finding online coupons and clearance sales. To ease us into the online shopping experience, we started using virtual cards or otherwise known as Virtual Account Numbers offered by Citibank.

What is Virtual Account Number

Citibank offers a service called Virtual Account Number for its credit card customers. This service is completely free and you would NEVER have to give out your real credit card number when shopping online. Instead, a substitute credit card number will be generated to take the place of a real credit card number. Every purchase you make with a Virtual Account Number will appear on your monthly statement, just like any other transactions. Behind the scenes, all your Virtual Account Numbers are mapped back to your real credit card number, but the merchant doesn’t see or have to know your real credit card number in order to process your order. As far as the merchant is concerned, it as if you handed a real credit card number, but it is virtual.

A Virtual Account Number is for one-time use only. Once a number is used by one merchant, it will fail if you try to use it on other merchants’ sites. In essence, that is the idea behind a Virtual Account Number so that it is guaranteed to fail when your number gets stolen or mis-used.

By default, the Virtual Account Number can be generated with no dollar limit and a 12 month expiration period. But, you can fine tune your virtual account number by going into Advanced Options. There, you can specify the exact dollar amount and time limit anywhere between 2 to 12 months. I usually generate virtual account numbers for the exact amount the merchant is going to charge me. This guarantees that your merchant will not be able to charge you more than you specify and also after the card expires.

The time and dollar limit option also helps greatly with products or services that offer some sort of 'free trial' and beyond which you will get charged automatically at the end of the trial period unless you cancel. The ‘Free Trial’ merchants typically make money from people who forget to cancel their trial services before the trial period expires. Virtual Account Number comes handy in such situations because you will not be charged once the trial expires. For situations like these, I create a virtual card of $1 value with a month expiry.

How to generate Virtual Card

Step 1: Login to Citi Website

Log in to the Citibank website using your online login and password.

Step 2: Access Tools & Virtual Account Number Section

Go to Tools and select Get a Virtual Account Number. You will be asked to acknowledge on their agreement page. Once you acknowledge, you will be given to open up the virtual account flash program.

Step 3:  Login to the Virtual Account Number Software

In the next step, you will asked to login using the same user name and password you use on the Citibank website.

Step 4:  Choose Appropriate Option from the Welcome Screen

Once you login, you will see the Welcome screen. This screen has a Generate a Virtual Account number button. Clicking on this button generates a virtual card.

[caption id="attachment_114" align="alignnone" width="256"] Welcome screen for Virtual Account Number software[/caption]

If you want to specify dollar and time limit on the virtual card, then click on Advanced Options link. You can specify either a time limit or both dollar and time limit. If you are going this far, I would use dollar and time limit.

[caption id="attachment_115" align="alignnone" width="255"] Virtual Account Number Advanced Options[/caption]

Step 5:  Use the Virtual Account Number

Once you generate a Virtual Account Number, it is ready to be used. You will simply need to copy and paste it into your online retailer's website.

Caution

I have had this happen to me recently. I recently placed a ‘pickup from the store’ order with Lowes. When I went to pick up the product, I was told that they didn’t have one of the two products in their inventory. So, they offered to give me a refund. To refund the money, they asked to see my credit card I had used. Obviously, my real credit card was different than the virtual credit card. The refund did not go through. Ultimately, I ended up getting a store credit. Since the amount was small, it didn’t really matter to me. But, if the amount was larger, my money could have been tied up in the store credit. This situation varies from store to store. For other merchants, I have received refunds on virtual cards without any issues. Another disadvantage of Virtual Account Numbers is that you can't use these for recurring payments. For those, you have to use real credit cards.

Conclusion

Online shopping with virtual cards provides the peace of mind. It is quick and easier to generate the Virtual Account Numbers. I highly recommend it.