Nothing is easier than purchasing an item online with a credit card.
Whenever you make a purchase with a merchant you don't know, a credit card is your safest bet.
Not all cards are created equal though, and some cards carry more protection than others, here are some of the benefits that may or may not be included with your card:
* Zero liability: Offered by credit card issuers, including Visa, MasterCard, Discover Card and American Express. When someone steals your credit card and makes charges without your permission, you are responsible for the first $50. But if your card offers "zero liability," you're not responsible for any of it. Some cards require you to report your card missing within a certain amount of time, so be sure you know what the case is with your card.
* One-time use/virtual or temporary numbers: Offered by credit card issuers, including Discover; also by some banks, including MBNA. These allow you to download a card number that changes for every online purchase you make, thus increasing your security greatly. The downside is you won't be able to purchase airline tickets with this card, because you have to show your card when you pick up your ticket, and with the number changing for online purchases, your card won't match the number you bought the ticket with.
* Extra passwords: Offered by credit card issuers, including Visa and MasterCard. This creates a password to use for online purchases. The downside is that not every merchant participates, for those that don't you don't get extra protection.
You should read the terms an conditions of your credit card so you know what sort of rules apply to your card.
Pick a card, any card
Consumers prefer credit cards when making purchases online, because with credit cards you can issue a chargeback if you weren't happy with your purchase and the merchant won't issue a refund.
Zero liability adds another layer of armor. This prevents you from having to pay for any unauthorized charges made to your card.
But no matter how popular Internet shopping becomes, there are still those who don't feel comfortable putting their credit card numbers into the net.
When MasterCard did a survey of its cardholders in 2002, 70% indicated that they were concerned about security and fraud issues. Of those who indicated they were worried about security, 46% said they would shop online more often if security were stronger.
However, extra security comes with extra hassles. Many cardholders didn't like hte one time use numbers, because it was to much of a hassle to get a new number every time you wanted to make an online purchase.
There are those that enjoy the extra security this feature offers however. For some the inconvienience is worth the protection.
Another problem is there's no way to match up the one time use number to the card, so customers are limited to items purchased online shipped, not items they must pick up in person.
The jury is still out on the use of an extra password when shopping online. Passwords are easy to use, usually adding one extra step to an online purchase. But to use a password, both the e-merchant and the consumer must be signed up for the program.
How a consumer can sign up will vary by card and bank. Visa offers password protection to consumers directly, and the service is voluntary. MasterCard makes its service available through their participating banks.
The headache factor
But why should consumers even care about theft or fraud if they're not liable for fraudulent charges?
The headache factor is the answer. Nobody wants their card to be stolen, even if they're no liable for any charges that are made. They have to call up their company, get the charges cancelled and the credit card cancelled. Then get a new card issued, and wait while it's being processed and shipped.
You must provide any documentation the credit card company requests to help show that you did indeed lose your credit card, and this can sometimes be a large pain.
