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May 23, 2019
Shopping Online: The Safest Ways to Pay
Posted by Rhiannon
- Credit cards
- Debit cards
- Gift and pre-paid cards
- Third-party services (PayPal)
Credit Card Pros
- Credit cards often have excellent fraud protection. If your credit card provider flags a purchase as suspicious, they can quickly and safely reach out to you to confirm if you made the purchase or not.
- Charges on credit cards are often easy to reverse. If you make a purchase on a website that you realize later likely wasn’t safe, or that never sends you your product, you can reach out to your credit card provider to have the charge reversed. You can also have fraudulent charges reversed as well.
- Cancelling a credit card is easy. If your card information falls into the wrong hands, cancelling the card can be done immediately and safely, with no damage to you as long as the danger is discovered quickly.
- When you use a credit card, you don’t pay up front. Instead, the card provider will issue the funds and you pay off your bill at a later date. This is great for ecommerce especially because items often do not arrive the same day you purchase them. Using a credit card allows you to receive and check the product before paying for it, so you can cancel the charge (or get it refunded) before actually paying from your own pocket.
- Because credit cards are one of the most popular payment methods in the world, many ecommerce companies put extra emphasis on making sure those transactions remain safe.
Credit Card Cons
- If you often have recurring charges on your credit card (for example, subscriptions, phone payments), accidentally having your card information fall into the wrong hands becomes a hassle. You have to cancel it and switch all recurring payments to the new card.
- Using a credit card online requires you to give your name and card details as well. While it’s a mostly safe method of payment, data breaches can happen, which puts your personal information at risk.
- Some companies automatically save your credit card information in your account (if you don’t opt out of doing so). While that makes your next purchase more convenient, it also means that if your account is ever hacked, the person who did the hacking also has access to your credit card.
Tips for Using Credit Cards Online
- If you don’t trust a website fully, choose a payment method other than a credit card.
- If you make online purchases frequently, consider getting a separate credit card to use exclusively for those purchases. You can easily track your spending on just that card, and also avoid having to change your billing information for recurring payments if the card’s information is compromised.
Debit Card Pros
- Debit cards are a quick way to pay when shopping online by directly drawing funds from your bank account. You don’t have to worry about debt or tedious applications; if you have a bank account and money in it, you can use your debit card for any purchase you want.
- Most (but not all) debit cards offer “zero liability” protection, similar to what credit cards offer. Check with your bank to learn the details of your card.
Debit Card Cons
- Your bank account directly links to debit cards. If your card information is stolen, it can be used to drain all of your money very quickly, and without permission.
- Fraud protections on debit cards do not work as fast as credit cards. If you realize someone is making unauthorized purchases from your account, you may have to wait up to 10 days for the bank to begin handling the problem. It’s possible you may never get your money back at all.
- Not all online retailers accept payments made with debit cards.
Tips for Using Debit Cards Online
- In general, it’s best not to use a debit card for an online payment.
- If you must use your debit card for an online purchase, set up alerts on your bank account so you see every purchase made, whether it was made by you or not.
Gift and Pre-Paid Card Pros
- Most pre-paid cards are a more anonymous way to pay online than with a credit or debit card. You can buy ones for large retailers at your local grocery or convenience store (or your bank for pre-paid credit cards) and even pay in cash for them, so they don’t infringe on your privacy whatsoever.
- Shopping online can be addictive and pre-paid cards are a great way to set yourself a limit and stick to that limit.
- Because the cards have a set limit on them, even if you lose the card or someone else gets a hold of the number on the card, there’s a hard limit to what they can spend without your knowledge.
Gift and Pre-Paid Card Cons
- Unfortunately, not all retailers accept pre-paid cards or offer gift cards to use on their website. This may limit where online you’re able to shop.
- Unlike with other payment methods, some pre-paid cards come with extra fees (for example, an activation fee), so you have to weigh that knowledge before choosing to use this payment type online.
- If the card accidentally falls into the wrong hands, there are very few protections on them. Any money lost may be difficult or even impossible to get back.
Gift and Pre-Paid Card Tips
- If you plan to use a pre-paid card, check the retailers you intend to buy from first to ensure they accept that method of payment.
Third-Party Service (PayPal) Pros
- The greatest benefit of using a third-party payment service like PayPal or Google Wallet is that you reduce the number of places your banking information exists online. Instead of giving it to every retailer, the information is kept on a single site that other retailers can no longer access after a transaction is complete.
- Some services also offer “buyer protection” to compete with credit cards. They make it easy to dispute and resolve a charge should an issue arise.
Third-Party Service (PayPal) Cons
- In the event of a dispute between you and a seller, some third-parties may freeze your account while they investigate. This means it can’t be used for further purchases until the issue is resolved.
- Because you can connect banking information to some third-party services, a hack of their service leaves you at risk.
Third-Party Service (PayPal) Tips
- If given the option, connect your credit card to a third-party service instead of your banking information. This not only allows you to dispute charges twice (once with the payment service and again with the credit card provider if needed), but it also reduces the risk of valuable banking information being stolen.
While there are several payment options that are great for making online purchases, not all are created equal. They all have benefits and drawbacks. At the end of the day, it’s up to the user to decide which method works best for them.
To further protect yourself while shopping online, use a VPN to encrypt all of your transactions.]]>
Posted by Rhiannon
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