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How to Pay Online Without a Credit Card


Charging purchases to a credit card is the way U.S. consumers most commonly pay online. But there are several reasons you might not want to use a card when you buy something on the internet. Maybe you’re concerned about incurring interest if you don’t pay the card off right away or about keeping your financial information secure. You could also be looking for a smoother checkout experience.

Here are some credit card alternatives to consider.

Digital Wallets

A digital wallet is a payment mechanism that works on a connected device like a smartphone or desktop computer. Examples of digital wallets include Apple Pay, Google Pay and PayPal.

You can link the wallet to a debit card, checking account or other source of funds, and the wallet saves your payment information. You can also store funds in the wallet.

To make a purchase with a digital wallet, select that option at checkout. Enter your password or use touch or face ID on your device to access your account. Then, you authorize the transaction, and the wallet uses your money to pay the retailer.

Digital wallets offer convenience. “You’re basically able to check out in less clicks,” says Manny Pansa, senior vice president of product and solutions engineering at BlueSnap, a payment technology company. “You don’t have to enter in all your payment information. You don’t have to remember your card number; you don’t have to put in your address. It’s all about frictionless checkout as far as the consumer goes.”

Security can be another advantage. A digital wallet moves money for you but doesn’t share your bank account information with retailers, allowing you to keep that data private.

One of the main downsides of a digital wallet is that it’s tied to a device, so you may not be able to use it if you lose the phone or tablet it runs on. And if your device is stolen, you need to remember to remotely erase the information in your digital wallet.

Payment Apps

Another option is to use a payment app like Venmo, Zelle or Cash App.

“Payment apps were traditionally just something that peers would use to exchange money with each other,” says Sheridan Trent, director of market intelligence at TSG, a payment analytics and consulting firm. Increasingly, though, the apps offer most of the same functions and convenience as digital wallets.

As with a digital wallet, you use a payments app by first linking a bank account or other funding source. When you want to check out, you select the app, log in and authorize the transaction.

Consumer protections vary among payment apps. Depending on the app’s policies, it could be difficult to get your money back if you pay a scammer. So you should make sure you’re dealing with a reputable retailer before paying through an app.

Buy Now, Pay Later

Buy now, pay later is a payment method offered through a third-party service provider such as Affirm, Klarna or Afterpay. You apply at checkout, and if you’re approved, you make a series of equal payments over several weeks or months to pay for your purchase.

“This is something that gained a lot of traction during the COVID-19 pandemic,” Trent says, adding that one of the reasons this option gained popularity is that many consumers were struggling with funds at the time.

The application is usually quick and requires sharing some basic contact information. The buy now, pay later provider typically runs a soft credit inquiry, so applying doesn’t affect your credit score.

Often, providers charge little or no interest if you pay as agreed, so this can be an affordable method of spreading out payments for a large purchase.

However, fees and interest will likely apply if you take too long to pay off your bill. “You need to make sure that you’re still financially sound in budgeting these purchases and making those payments on time. Otherwise, you are going to end up paying more in the end,” Pansa says.

Cryptocurrency

If you find a retailer that accepts it, you can pay with a cryptocurrency like bitcoin or ethereum. This method often involves scanning a QR code to connect your crypto wallet to the retailer’s payments processor. You then select the cryptocurrency you want to use.

Because cryptocurrencies are highly volatile, the payments processor typically freezes the exchange rate between the cryptocurrency and U.S. dollars for a certain period of time. You authorize the payment in your crypto wallet, and the processor pays the retailer in dollars.

Crypto payment isn’t widely available, probably because there isn’t much demand for it, according to Trent. “In the U.S., it’s probably even less than 5% of people who have actually used cryptocurrency to make a purchase. It’s just not common,” she says.

An advantage of paying with crypto is that transactions go through quickly, without waiting periods. And you might prefer using crypto if you like the fact that it’s decentralized.

But there are some downsides, Pansa says. The volatility of crypto prices means it could be hard to predict how much you’ll need to pay for a purchase. And cryptocurrency transactions are not reversible, so you can’t recover your money if something goes wrong.

Debit Cards

Paying with a debit card may seem similar to paying with a credit card. At checkout, you enter your debit card number, expiration date and CVV code. The difference is that, unlike paying with a credit card, a debit card purchase moves money directly out of your linked bank account.

A debit card is as easy to use as a credit card. And some people find paying by debit card is helpful for sticking to a budget. “You’re basically limited to what you’ve got in your checking account. You have better control of your spending versus using credit,” Pansa says.

But compared with a credit card, debit cards come with security risks. One danger is that hackers could steal your card number and spend the money in your account. While there are limits on how much you’re liable for, you have to report fraudulent debit transactions within two business days to cap your loss at $50 or within 60 days to limit it to $500.

And if you buy something that’s never delivered to you or if a product turns out to be defective, the money is already gone from your account. “If you do get scammed, it can be harder to recoup funds,” Trent says.

Gift Cards

There are two types of gift cards you can use for online shopping: open-loop and closed-loop. Both allow you to spend an amount of money that’s loaded onto the card.

An open-loop gift card is issued by a bank and displays the name of a payment network like Visa or Mastercard. You can use it at any online retailer that accepts credit cards in that payment network. At checkout, you enter the card number, expiration date and CVV code just as you would for a debit or credit card.

A closed-loop gift card is issued by a retailer and can be used only for purchases at that retailer. To use it at checkout on the retailer’s website, you enter the code printed on the card in a designated field.

Paying with a gift card may be a good choice if you want to limit your spending, because you can’t spend more than the card’s balance. Another plus is that you don’t have to share any bank account information or other financial details with the retailer.

With certain gift cards, you’re able to register the card so you can recover the balance if it’s lost or stolen. If you can’t register the card, there’s nothing you can do to get the money back if you misplace it.

Some gift cards have an expiration date, so you have to be careful to spend them in time. “The retailers bank on people not using their gift cards,” Pansa says. Federal law requires the expiration date to be at least five years after the card is issued.

And you should keep in mind that a closed-loop gift card will typically lose all of its value if the retailer goes out of business.



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