Why Credit Cards are the Safest Way to Pay Online

Last Updated Apr 4, 2010 6:51 PM EDT

Announcing that online commerce is routine wouldn't have been news even back in 2005. After all, 92 million people bought stuff online last year alone.

But how safe are your online transactions? And of the available options -- like credit card, debit card, and PayPal -- which is the safest? If you read the headline, you already know the answer.


Recently, the New York Times explained that credit cards offer the best overall protection for online purchases.

As it turns out, if you react quickly enough (say, within about 2 days of the event), all the major payment systems work about the same and offer similar protection. But credit cards work the best for the longest timeframe.

Credit cards limit your liability from fraudulent charges to $50 in meatspace and to zero when used online. In contrast, debit cards work the same for the first two days, but your liability grows as time passes if you wait to challenge a charge.

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