Both credit cards and PayPal offer a number of security features and benefits when you shop online. Even so, they come with costs and pitfalls as well. PayPal offers slightly better encryption, which on some websites can help you protect your money.
Using credit cards for online shopping
Most online stores give you the option of paying by card.
With this method, you need to provide the following details:
- Card number
- Expiration date
- Value Verification Card, known as CVV or CVC
Similar to in-store purchases, card acceptance is subject to change depending on whether you use an American Express, Mastercard or Visa credit card.
Pros and cons of online with credit card
- 24/7 fraud monitoring. Most credit cards have security systems that monitor and flag activity as it occurs. Depending on the card, you will also have the ability to oblige or freeze your card if you suspect that it is being used for fraud.
- No liability policy. This feature includes fees for fraudulent transactions made on your account so you won't lose money if your card is compromised.
- Protect your real money. If your purchase doesn't appear or differs from the item description, your credit card provider may be able to help you get your money back.
- Free option. Some cards offer a 0% offshore transaction fee when you make a purchase with a business based abroad, regardless of from 1% to 3% per online purchase.
- Rewards. If you have an airline gift or credit card, you will earn points for every $ 1 spent on your purchase.
- Online fraud risk. Online credit card fraud is on the rise as more and more people use cards to make purchases over the web.
- Enter card details. You may have to type in your card details each time you make a purchase. Apart from being annoying, it can increase the risk of fraud if your internet connection is not secure or if you are in a public place. As a general rule, don't enter your credit card details on websites that start with http: //. Must be https: //.
- Potential interest expense. If you bring a balance from your online shopping, you will be charged interest according to the card purchase rate.
- Unforeseen expenses. If you are using a card that charges transaction fees overseas, it may not always be clear when these fees will be charged. For example, if the online store is based overseas, these fees may be appropriate for purchases in US dollars.
Using PayPal for online shopping
Unlike credit cards, PayPal allows you to store the payment details you choose in a secure account. You can then make a payment via PayPal when you enter a store that accepts it.
- Encryption payments. Every payment made via PayPal is encrypted so your details are stored securely. This reduces the risk of storing personal information or payments where you don't want them to.
- Fast payouts. You don't need to enter your card or account details to make a payment via PayPal. Instead, you will just log into your account and choose the payment option you want.
- Funding opportunity options. If you need to refund purchases made via PayPal, you can get reimbursed shipping costs, up to $ 30 per transaction. PayPal also offers reimbursement for items that were undeliverable or that differed significantly from the seller's description.
- Credit card gifts. If you add a reward credit card to your PayPal account, you'll earn points for every $ 1 spent on qualifying purchases. What's more, most of the major credit cards are accepted.
- Currency conversion fees. If you run a retailer that doesn't accept foreign currency, PayPal will use its own conversion rate for the transaction. This is often for an additional fee. PayPal will show you the conversion rate at the time of the transaction.
- Great payment details. Transactions conducted by PayPal may display their billing details, not the details of the company that made the purchase. If you are not aware of it, you could mistake a payment for fraud when checking your credit card or bank account transaction history.
If you shop a lot online, choosing to pay by credit card or PayPal won't make much difference in terms of security. PayPal does have better encryption when shopping on some websites, but not all retailers accept it as a payment method.