A simple click or swipe on your laptop, tablet or smartphone to purchase a gift, buy sports and concert tickets, or book a trip may seem like the easiest way to shop this holiday season. Yet it’s important to protect your credit and your identity in the process. 

Americans plan to spend just under $1,000 on gifts and holiday items this year, according to the National Retail Federation. Surveys show the majority of consumers will shop online for holiday gifts and use credit cards to pay for them. And, about 1 in 5 shoppers — including 38% of millennials — will use “buy now, pay later” services to make purchases instantly and pay for them over time with no interest, a Morning Consult survey found.

Whether you do your holiday shopping in a store, online or with an app, it’s important to keep these five tips in mind before making a purchase. 

1. Credit cards are often the safest payment option

There are several federal mandates to protect you when you use your credit card. For example, if you are charged twice for the same item or are billed for items you never received or already returned and paid by credit card, you can dispute those charges. Also, if your card is lost or stolen, your losses may be limited to $50 as long as you notify your issuer promptly. 

There may be some consumer protections with debit cards, but when money is debited from your bank account it’s just gone and it may take time to resolve the issue.

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“You’re almost certainly going to get money back with a debit card,” said Matt Schulz, chief credit analyst at Lending Tree. “But there may be a short window where if there is a bill that comes due, there’s no money in that account.

“If it takes you a while to see the fraudulent transaction and you have autopay, you may potentially miss payments.”

Also, if online stores or sellers say they only accept payment by gift cards, money transfers (Western Union, MoneyGram) or cryptocurrency, the Federal Trade Commission warns that’s definitely a red flag. It’s nearly impossible to trace and reverse those payments.

2. Consider using “virtual cards” or mobile wallets

Your credit card company may offer “virtual card numbers” that link to your account when you make online purchases. These are unique, randomly generated numbers that are only used once and can provide an extra layer of protection for your real credit card number. Capital One and Citi will let you create virtual card numbers when you shop online. 

Also, digital wallets, like Apple Pay, Google Pay, Samsung Pay and PayPal, will store credit card information but use “tokens” instead of your credit card’s primary account number when you make purchases. That helps to keep your real card number safe and make your transactions more secure. It’s useful online or in stores so that you don’t have to carry cash or your credit cards when you shop. 

3. Be careful with ‘buy now, pay later’ services

4. Watch out for social media scams

blackCAT | E+ | Getty Images

According to the Better Business Bureau, scammers may offer attractive deals by email or on social media but, once the payment is made online, no product or service is delivered. Or, they’ll send low-quality or counterfeit products. 

Research the website or business through an independent source before making a purchase. Most consumers don’t do that. Also, check the website and URL for errors or inconsistencies. 

And, make sure you see an “s” strategically positioned in the web address. Look for “https” in the URL (the “s” is for “secure”) and a small lock icon on the address bar. The BBB says never enter payment or personal information into a website with only “http” — it is not secure.

5. What to do if you are a victim of fraud or identity theft

Post source: cnbc

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