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Safer Ways to Make Online Purchases

Identity Theft News

If you’re a bit worried about making online purchases with your credit card – and let’s face it, who isn’t? – don’t despair. There are a number of steps you can take to make sure your next purchase is a bit safer.

The sheer number of online security breaches and sophisticated computer hackers has left many consumers weary about making online purchases. Although the only way to ensure safety from online hackers is to completely eliminate making online purchases, there are a few things you can do to greatly reduce the chances that you will become the next victim of online credit card theft:

• Ask your bank if you are able to create a “disposable” credit card number.  Consider ShopSafe, through Bank of America, for example. If you have a Bank of America Visa or MasterCard credit card, you can simply sign into your Bank of America account online and follow the ShopSafe prompts to sign up for a temporary, 16-digit credit card number, which can then be used to make an online purchase. This temporary card number, which even comes with its own expiration date and security code, is valid at only one online vendor. Therefore, you must sign up for a new card number for each online purchase. However, if you frequent a certain online vendor, you can continue to use that same temporary credit card number.
• Consider using an online payment service, like PayPal or Google Checkout. These online payment services eliminate the need to provide online vendors with credit card numbers and other personal information, and instead allow you to sign into the service and make the purchase. In addition, they also offer protection against unauthorized purchases, provided you report the fraud within 60 days.
• Consider purchasing a prepaid credit card. If you really want to avoid entering your credit card information online, you may want to purchase a prepaid credit card. To activate one of these cards, simply load it with the desired amount of money. Then, every time you make a purchase, the purchase total is deducted from your account balance, like a debit card. Be careful, however, of the fees that are often associated with prepaid credit cards, as they can come with their share of sneaky fees, such as activation fees and “load” fees.

Credit Card Usage Declines for Online Shoppers

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It appears as if credit card users are less likely to shop online with their credit cards than ever before.

Many individuals, as a result of the poor economy and mounting debt, have chosen to put away their credit cards and instead shop online using different payment methods.

In fact, according to a recent study by Javelin, entitled “Online Retail payments Forecast 2010-2014,” e-commerce grew nearly 11 percent in 2009, while credit card purchases fell below online payment services (such as PayPal and Google Checkout) and gift cards.

Online Shopping Increasing

According to American consumers, nearly 63 percent of us shop online, and this number is expected to increase to 78 percent by 2014. So, it only makes sense that credit card usage will also increase along with it. But, this doesn’t appear to be the case. The question is: why?

Many individuals, with the best of intentions, have decided to use other forms of payment when shopping online. For individuals who have difficulty managing their finances, this may be the best option. But for everyone else, using a credit card to make an online purchase is still often their best bet.

Credit Card vs. Debit Cards

Using a credit card for online shopping is a much safer alternative to using debit cards; for example, if a computer thief snatches an individual’s debit card numbers they could drain their bank account. A credit card, on the other hand, is protected from unauthorized spending. Keep in mind that even if your debit card is protected from credit card thieves, it can still wreak havoc on your life and your finances if your bank account is drained and checks begin bouncing.

Other individuals are simply moving away from credit cards altogether because of the state of the economy over the last year. Although, again, this may be a good idea in general, many consumers should consider the fact that credit cards can provide proof of payment and can often act as a receipt.

In other words, it may be best to keep at least one credit card for online purchases so that you can protect yourself and shop without worry.