The Internet has revolutionized the way people shop. You can now order nearly anything you imagine from anywhere in the world, but what are the safe ways to pay? Credit Cards and PayPal are two options.
Here we’ll show you what are the pros and cons of credit card and PayPal, which helps you decide which one is better for you.
Credit Cards VS. PayPal – Which one is better for you
What are the pros?
● Credit cards are generally a more secure alternative to debit cards because you can easily lock or cancel your card if your details are stolen. Credit cards are often covered by a form of fraud protection.
● Credit card companies will actively look for suspicious fraudulent transactions on your card, and you can easily query transactions you can’t recognise.
● Microchipping, PIN numbers and CVV combined make your card pretty secure.
● Some credit cards charge zero foreign currency conversion fee, or offer extra reward points, which would be handy for purchasing from international stores.
What are the cons?
● The most significant con of using a credit card is probably the increase in online credit card fraud as online payment activity increases.
● Some credit cards may charge a currency conversion fee when making purchases from international stores.
● Some international stores may decline your Indian credit cards.
✽Many credit card companies have launched credit cards for overseas purchases. You can apply for the most suitable credit card based on your financial status and consumption habit.
Further Reading: 10 Best International Credit Cards in India for 2020 (Source: MyMoneyMantra)
You can use this guide to compare credit cards that protect you from fraudulent transactions, and understand how transaction/foreign fees for overseas purchases are calculated and the interest rates of each card.
What are the pros?
● You can easily buy things from tons of online stores worldwide using your PayPal account.
✽We would recommend you using PayPal over credit cards for oversea purchases.
● All your payment information will be stored on your account so you don’t have to enter card details every time.
● Your financial details and transactions are encrypted and monitored to help prevent fraud and identity theft.
● PayPal offers a $0 Liability for Eligible Unauthorized Transactions program. If you believe something has gone wrong, simply report it to PayPal to initiate an investigation.
● PayPal has regular updates to its systems to help block external threats and protect your account.
● If you link the account to your credit card you can still gain reward points from your credit card company.
● Using a credit card in PayPal is generally a good idea anyway because you gain an extra layer of protection with your credit card’s fraud protection.
What are the cons?
● PayPal is a large, worldwide third-party payment platform and as such is liable to many threats from hackers. To stay secure, PayPal recommends watching out for hoax websites, phishing emails, and scammers.
● If international stores don’t accept Rupee, PayPal will convert the currency for you, charging the current wholesale exchange rate and a percentage above that. This can be a charge up to 4% above the exchange rate.
In actuality, PayPal is a relatively safer option than using a check, or your credit card/bank account to make purchases. However, users will need to take some specific actions to maximize security when using this 3-party payment gateway.
✓ Don’t link PayPal account to your bank account or debit card.
✓ Never click on any links in suspicious emails.
✓ Check your balance often.
✓ Buy from verified merchants.
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