After you identify some stores of interest (or perhaps as part of the process of deciding where to shop), you’ll need to consider payment options.
Most online retailers accept all major credit cards as well as other options, such as PayPal. These are by far the most popular payment options, and they account for the majority of online spending. But using a credit card online can be risky if you aren’t careful about managing your information and Internet connection. Around the holidays, it’s especially important to regularly check your card statements for signs of fraudulent activity and to work with your card company to address any issues.
Debit or credit?
Credit card companies tend to protect consumers through credit limits, statement reviews, and numerous fraud countermeasures, and consumers have limited liability in cases of fraud. The advantage of these features is that they provide a buffer between the time a transaction appears and the time you pay, allowing you to identify and dispute fraudulent charges before they cost you.
The main risk associated with debit cards is that they draw funds directly from your bank account, so this buffer time does not exist for debit accounts. Debit cards are also not necessarily covered under the same protections as credit cards, although debit cards issued by major payment networks (e.g. Visa or MasterCard) often carry the same protections as credit cards in the same network. If your debit card is not protected by anti-fraud features, then you may only discover fraud if your card is later declined or if a check bounces (both of which would occur after funds have been deducted from your account). Routinely check your debit card statements for signs of fraud. If you have questions about debit card security, contact your card issuer.
If you’re not comfortable using your credit or debit card online, consider using a prepaid, refillable card such as a MoneyPak or Visa Gift Card to make online purchases without disclosing your card information. In the event that your payment information is compromised, a hacker will only have access to the limited funds you placed on this secondary card. As an added benefit, this strategy helps to prevent you from going over budget on your shopping spree.
No matter what payment type you use, never submit payment information over an unsecured connection or to an untrusted site. Remember to check for the padlock icon in your browser bar and a URL beginning with “https”.
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