Credit Cards Online
There are more people every day who choose to do their shopping online. This means that more and more credit card users also do their shopping online. Of course, there are still many credit card users who are afraid to take the plunge for fear of fraud.
Most credit card users have nothing to be afraid of. By only shopping at secured websites, with web addresses beginning with https, and ignore any unsolicited “phishing” e-mail requests, the likelihood of your credit card information being stolen online is actually less than that of losing it to a thief who steals the information from your physical credit card. There are still some extra steps that the cautious consumer can take when shopping online to provide greater credit card security.
Some credit cards offer an option known as a “virtual credit card” which allows a consumer to shop using a temporary number connected to their existing account. This number will only function for the length of a single transaction or at only one store. The details of these virtual credit cards differ between credit card issuers, but by using a virtual number, possibly with a passcode attached to it, you can add an extra layer of security to your actual credit card information. The virtual information is used instead to make payment on an online merchant that would normally accept the actual credit card. The charges still appear on your regular credit card statement. These virtual credit cards can be used to avoid exposing your actual credit card information online only; they can’t be used in any real world shopping.
PayPal, which is owned by eBay, is probably the best-known alternative to using your actual credit card. Consumers can make payments with PayPal after providing the service with a source of funds in the form of either a credit card or a bank account. This way, you can again add a layer of protection between your actual information and that given directly to a seller. Instead, you simply tell PayPal to transfer your payment to the seller’s account, and PayPal will only identify you to the seller through an e-mail address.
While an increasing number of merchants accept PayPal, some large commercial websites still do not. PayPal promises full refunds for any unauthorized transactions, but its safeguards against unethical merchants are less than perfect. They will cover payments of up to $1000 for qualified eBay purchases if you do not receive the item or it is "significantly” not what you were promised. "Qualified," however, has specific requirements, and is limited to merchandise is physical. It does not cover services or software. If PayPal decides the claim is valid for a non-eBay transaction, PayPal will process a refund only if the seller’s PayPal account has the actual funds to cover the claim.
You may be able to find a way around this by using a credit card to fund your PayPal account and thereby recover the money through the credit card company. Unfortunately, PayPal is responsible for the entire amount, so it is expected that you will complete its dispute resolution process before even attempting to deal directly with your credit card issuer. The delay could mean missing the credit card issuer’s deadline for disputing the charge.
Some websites have recently begun to rely on the type of electronic payment systems that many consumers already use to pay monthly bills. When available, theses electronic payment systems are offered as an option for payment in addition to credit cards or PayPal. After the payment is made, you receive an e-mail confirmation that the merchant has received the funds. Instead of merchants getting your bank information, they simply receive notification that a payment has been posted to their account in your name.
Even when used online, major credit cards have zero-liability policies for credit card transactions made without your authorization. It can still be a major undertaking to fix your credit once your credit card number is stolen. It is always wise to be as cautious as possible and keep track of your credit card account through monthly statements or online. This can alert you quickly to any fraud. After all, better safe than sorry!