Credit in an Online World

As my obsession with online voucher sites continue (I recently discovered the blog everythinginbudget.blogspot.com which has links to soooo many voucher sites!), I find myself using my credit card in paying for my online purchases more and more. These online sites offer different modes of payment, such as credit card payment, e-banking payment (direct debit to your bank account), paypal, or upfront payment to the voucher vendor’s office. I choose to pay with my credit card because it’s convenient, I’m used to it (as opposed to paypal) and if I time my purchases correctly, I buy myself another month before I’m supposed to pay my debts. This is why I was surprised to find this article online – Why Credit Cards Are Not the Future of Online Payment.*

The article included a short history of credit (it’s a good read!) and statistics on online shopping payment modes. Apparently, there has been a significant shift from credit card payments online, to alternative payment methods (such as paypal) and the reason cited by consumers for not using their credit cards is the functional deficiencies involved. “One of the most basic examples: we can all agree that it’s downright painful to have to repeatedly type in your credit card number and security code every time you go to make a purchase online, right?” Also from a merchant’s perspective, “the cost of accepting credit cards -- and the associated hidden fees -- can make accepting payments online prohibitively expensive.”

I don’t know the costs from a merchant’s perspective, but I don’t think credit cards are going anywhere. Typing your card number and security code isn’t really that big of a hassle. Weigh that against the time you gain (provided that you time your purchases correctly, taking advantage of the cut-off periods) with the money you should have already paid, and I’m sure the benefits would outweigh the costs. If you invest that cash in securities (provided that you invest wisely), then by the time you pay your credit card, you would have money to pay your debt and then some! Sadly, this is something most consumers overlook in the way they handle their finances. Convenience isn’t everything!

Katrina May Sy, 15th Blog Entry

*http://news.yahoo.com/s/mashable/20110302/tc_mashable/why_credit_cards_are_not_the_future_of_online_payment;_ylt=AviMrta.8b27tOcGVAJK8nH6VbIF;_ylu=X3oDMTQydThjaTVvBGFzc2V0A21hc2hhYmxlLzIwMTEwMzAyL3doeV9jcmVkaXRfY2FyZHNfYXJlX25vdF90aGVfZnV0dXJlX29mX29ubGluZV9wYXltZW50BHBvcwMxNARzZWMDeW5fcGFnaW5hdGVfc3VtbWFyeV9saXN0BHNsawN3aHljcmVkaXRjYXI-