AWD Moneyextra
- Our Online Buys
- Get a Loan
- Get a Credit Card
- Get a Mortgage
- Cheap Car Insurance
- About Us
- Contact Us
- My Portfolio
-
Money News
- Finance Features
- News Feeds
- Guides
- Dictionary
Buying online
Our Online Card Buys *
| Typical APR Variable | Max Int Free | ||
|---|---|---|---|
|
14.9% | 56 days |  |
|
14.9% | 56 days | |
|
14.9% | 56 days | |
|
|
14.9% | 56 days | |
|
14.9% | 56 days | |
| * Based on Lowest Standard Rates and is not a full search of the whole market | |||
More and more of us are using either a credit card or debit card to make purchases online. Our guide to buying online explains what you need to know about the growing internet shopping phenomenon and how you may ensure that your bank account details remains secure and your purchases are successful.
- How internet shopping has taken offer
- Beware of fraud - new opportunity brings new danger
- How to set up an internet transfer account
- Shopping without an internet transfer account
- Keep anti-virus software up to date
- Keep track of what you spend and how
- Get what you bargained for
- Selling online - make sure you get paid
How internet shopping has taken off
Just a few years ago inputting your credit card or debit card details to a website to pay for something was a practice reserved for the brave, forward-thinking or just plain naïve. But no doubt this was the same for the first people who 'dared' to insert a plastic card into a machine built into the outside wall of a bank to read their balance - and even withdraw cash - in public.
But, like any type of technological advancement, time has taken effect and today few people would blink an eye at making an online purchase. The average number of card transactions each individual carried out online in 2006 was 23.2; thats up from an average of 18.5 in 2005 and just 13.6 in 2004. (Source: APACS [www.apacs.org.uk])
Of regular internet users (that's a staggering 26.4 million people), three quarters had shopped online last year, bringing the total UK spend to £33.5 billion, which is almost double the amount spent just two years prior. And, when it comes to cyber shopping, things are still moving at a rate of knots. According to figures from Scottish Enterprise (April 2007), the growth in internet shopping is 15 times faster than that of general retail sales, while UK online sales are growing three times faster than in the USA.
Beware of fraud - new opportunity brings new danger
However, it would appear that the British public has not been so quick to keep up with the security aspects of the buying tool of our age. One in eight online shoppers fail to log out when shopping online and a quarter of online shoppers do not check whether a website is safe and secure.
Although internet fraud only accounts for 8% of all fraud in the UK, according to a report published by Attorney General Lord Goldsmith in July 2006, the vast majority is a result of criminals obtaining genuine credit card and debit card details in the real world - and then using them to shop online. However, no one wants to be part of the 8% - so what measures can you take to ensure that you are not?
Credit cards with 0% purchase rates
How to set up an internet transfer account
The best protection available is an internet transfer account, which is formally known as a 'payment transmission service'. This is basically a 'middleman' between buyer and seller that allows transactions to go ahead with neither party needing the other's bank details. In effect, you can buy and sell with just an email address - and of course a postal address to where the item should be sent.
There are several versions of this type of account - the most well-known being PayPal, which is owned by and used in conjunction with auction website, eBay. Others include Nochex, Moneybookers and Egg Pay.
As well as being a safer way to shop online, another advantage of internet transfer accounts is that when sending money from one to another, the process is immediate. This is also how articles, bought on eBay for example, can be dispatched immediately as the seller has confirmation that the money has been paid.
The downside, of course, is not every part of the service is free. With PayPal for example, while it will cost nothing to send money as the buyer, it will cost the seller 3.4% of the balance (plus a fixed 20p) to receive their money from debit or credit card funded payments. However if payment is from a PayPal account, there will be no charge. For anyone wanting to withdraw funds from their account, they will pay 25 pence if the sum is £49.99 or less.
Shopping without an internet transfer account
If you are buying something online with your credit card without using an internet transfer account, it's crucial to ensure that you are on a secure website so if there is anything slightly amiss with the way it looks - even down to a spelling mistake - use your instinct and don't proceed. There are also practical ways to ensure you are as protected as you can be whilst shopping online.
- If you are given the option to sign up to Verified by Visa or MasterCard SecureCode, make sure you take the time to do so before entering any personal details.
- Ensure that the locked padlock symbol is showing in your browser - this is usually found in the top of the screen if you are using Internet Explorer or Firefox 2. If the address bar turns green - as it does in some newer browsers such as Explorer 7 - it signifies that there is an additional level of security.
- Remember you will never be asked for your four-digit PIN number online or in any other circumstances. This is for your knowledge only. Similarly, never input card details as a result of marketing emails received.
- At the end of the transaction, go back to the old-fashioned security of paper and ink and print out your order, along with the retailers terms and conditions, postal address and telephone number.
Keep anti-virus software up to date
Once you have decided to enter the world of cyber shopping, you will need to put the type of vigilant head on your shoulders that was not required in the days of handing over tangible cash in return for some goods you could see, feel and take with you. So get into the right online shopping habits as early as possible.
It is imperative that your computer has up-to-date anti-virus software installed and that you download the latest security updates - known as 'patches' - for your particular browser and operating system. This is because, when your computer is unprotected, it can fall victim to a 'Trojan' - a type of virus which can be installed on your computer without your knowledge. A Trojan is capable of memorising and logging the keystrokes you make, thus capturing your passwords and other information.
Even if thought of all this sends you into a state of mind-numbing and irreversible boredom, get a technically-minded friend to help or even pay for a computer specialist from the Yellow Pages. Because one thing's for sure; contracting this 'disease' will be a lot more expensive and stressful that trying to prevent it.
Keep track of what you spend and how
Ironically, to protect you in the virtual shopping world, you should go back to good old-fashioned paper and ink by printing out your order along with the retailer's terms, conditions and contact details. This means that if you encounter any problems with the order, it can help your card company in taking up the case to find the missing funds.
Start reviewing your credit card and bank statements every month for any transaction you don't recognise - for example it could be for an irregular amount, made in a different country or paying for something you would be most unlikely to buy. Roll all this together and fraudulent transactions are pretty easy to spot - a £200 purchase in a book shop in China for example, should not be able to slip the net.
Get what you bargained for
It might sound obvious but are you are fully aware of what you are buying? Not just in what quantity but in what frequency? For example, it could be that you think you've bought a one-off service - a credit check for example - but it's actually a series of payments that you have unwittingly signed up to.
When buying online, the seller may suggest wiring money - usually with the excuse that they are on holiday or need the money quickly. But, however much you want the item being sold, never be tempted. Instant money transfer services are designed for people that already know or trust each other, as they deem the other party untraceable if your cash disappears. In fact, in 2006, eBay banned people from using Western Union and other money transfer services of this nature.
Selling online - make sure you get paid
There are hazards to selling online too, mainly associated with dispatching items before you have received payment. If you have sold something successfully on eBay for example, you will be sent an email telling you that the PayPal payment has gone through to your account. But don't take this as read. Fraudsters can send bogus emails of this nature, hoping you will send the goods before you actually check the account for yourself. Always make sure that funds have arrived in your PayPal account before sending the item.
20 August 2007 © Moneyextra.com
Our senior editor Robin Amlôt recommends you should consider taking independent financial advice before acting on any article. Please contact us for help with your individual circumstances if any assistance is required.