Online shopping always involves a few risks because there is always a chance that thieves can make purchases using your information or even withdraw money on your behalf. Technology is reliable to a large degree since information is usually encrypted into a hard-to-read format, but even when security is in place, there is always a chance of data breach or intercepted traffic.
While it is vital to keep your device secure and up to date, what is the best payment method when shopping online?
There are three common methods of payment when it comes to online shopping: credit cards, debit cards, or a payment service such as PayPal. Using one of these three choices addresses different concerns you may have.
Here are some advantages and disadvantages of using each payment method:
Credit Cards
Credit cards are often the first choice when it comes to shopping online. Many financial institutions have security processes in place to protect you if your card has been used for a fraudulent transaction. If you notice any suspicious activity, getting charges reversed is a phone call away.
The charges also do not come from your own money, but the card issuer’s. When a fraudulent activity is quickly acted upon, your liability can be greatly reduced to a small amount and in many cases, none.
Some individuals may use their credit cards as their form of payment for personal or business expenses and also pay automatic or recurring charges with the card.
If your credit card is stolen, a new card must be issued and all billing information needs to be updated in numerous places. When deciding whether your credit card is the best form of payment when shopping online, only do so when you are confident with the consumer protection available. There are also disposable credit cards that can be used once, or simply designate a credit card that’s only used for online shopping. That way, your expenses are accounted for and you won’t be inconvenienced if you need a new card.
Debit Cards
Using debit cards as a form of payment online is inexpensive and simple since the funds are pulled directly from your checking account. There are no credit checks required, payment in annual fees, nor the risk of accumulating debt like you do with a credit card.
Although using debit cards for online purchase is easy and straightforward, it is linked directly to your bank account. If the card is used without permission, money comes straight from your account and it can take 10 days for the bank to return money to your account.
Unless there are alerts and your checking account is monitored, avoid using your debit card if possible. If debit is the only form of payment available, consider using a prepaid card to help insulate your checking account from any problems.
Payment Services
Third-party payment services are also a good option for purchasing online, with PayPal being one of the most popular payment methods. These services can provide an extra layer of protection by keeping your bank account information in one central location, unlike credits cards which give out your personal information with every website you have shopped with. This reduces the risk of hackers finding your personal information.
However, when disputes with a vendor arises, these accounts are frozen while investigations take place and if you make a habit of disputing charges, your account may get closed. There are other payment methods that can substitute this service, but PayPal sometimes proves to be the easiest way to pay.
Hackers are always looking for new ways to steal personal information from the unsuspecting online shopper. Although there are always risks involved in every purchase, choose the payment method that lowers the risk of damages the most. Most importantly, stay vigilant.
