Online shopping has truly transformed how people make purchases, and the payment methods available have evolved just as rapidly to meet the changing needs of consumers. Some customers may still want to rely on credit cards, which have remained a dominant payment method for online purchases since the early days of e-commerce. But a sizable chunk of the population may also want the option to pay with their digital wallets due to the fast, seamless checkout experience they can achieve with just a few taps.
The interesting thing is, there are times when using a credit card is the better option for shopping, and there are times when it’s vice versa. In this article, let’s explore the unique advantages of credit cards and digital wallets, as well as the best circumstances for using each when shopping online.
Use a Credit Card When:
You’re Earning Rewards
Many credit cards come with programs that allow you to accumulate points, cashback, or miles with every purchase you make. As such, using a rewards credit card for online purchases is a great way to make the most of your spending. For this kind of approach, you not only get the items you want, but also accumulate rewards that can lead to future savings or experiences.
For example, the Landers Cashback Everywhere Credit Card by Maya offers a 1% cashback on all qualifying transactions, including online purchases. Each point you earn will equate to PHP 1, and when you reach 500 points, you’ll receive a voucher worth PHP 500 that you can use at any Landers Superstore in the Philippines. In addition to these rewards, you can expect a high level of security from this card thanks to its dynamic CVV feature, which allows you to shop safely as the CVV you input for a transaction expires the next day. Indeed, this makes the Landers Cashback Everywhere Credit Card the best card for online shopping for Landers members.
You Want Credit-Building Benefits
Whenever you use a credit card for online shopping, you’re not just completing a transaction, but also doing more to establish your credit history. This history is crucial for your credit score, which lenders assess when you apply for loans, mortgages, or other forms of credit.
Regularly using your credit card and paying off the balance in full each month will demonstrate to credit agencies that you are a reliable borrower. It positively impacts factors like your payment history and credit utilization ratio, both of which are critical components of your credit score. If your goal is to improve your credit profile within the year, using a credit card for your online purchases can be a strategic choice that benefits you in the long run.
The Merchant Doesn’t Accept Digital Wallets
Although digital wallets are steadily gaining popularity, it’s important to recognize that they are not yet universally accepted. Many online merchants still rely solely on credit cards for payment processing. As such, if you find yourself shopping at a website that doesn’t support digital wallet options, you’ll want to use your credit card as a sure mode of payment. In these situations, your credit card is what will allow you to complete your transactions without any hitches.
Use a Digital Wallet When:
Speed and Convenience Matter
For many consumers, speed and convenience are the biggest considerations when it comes to online shopping. These factors account for a seamless experience that saves customers time and effort, making it easier to find and purchase desired items quickly given customers’ increasingly busy lifestyles.
Digital wallets excel in this area because they can often streamline the checkout process. They also have the capability to store a user’s payment information, allowing for quicker access and enabling transactions to be completed in just a few taps or clicks. For many customers, this is easier, more pleasant, and less frictionless than the tedious task of entering card details and billing addresses every time.
You’re Taking Advantage of Special Offers
Many retailers offer promotions and discounts if their customers opt to pay using specific payment methods. Digital wallets typically come with exclusive deals that can be applied at checkout, making them an attractive choice for savvy shoppers.
Using your digital wallet, you may find access to limited-time promotions, bonus rewards, or special discounts that can help stretch your budget further. This can be especially valuable if you frequently shop at the same retailers.
You’re Shopping on Public or Unsecured Wi-Fi
Shopping online over public or unsecured Wi-Fi networks subjects you to significant security concerns. These networks can be vulnerable to hackers, who may intercept data transmitted between your device and the online retailer. Unless you have a VPN to encrypt your internet connection, sensitive information, such as credit card details and personal data, can be easily accessed by cybercriminals. In these situations, using a digital wallet often means enhanced protection for your financial information.
Today’s digital wallets are designed with advanced security measures, such as encryption and tokenization, which can safeguard your payment details during transactions. Instead of transmitting your actual card information to the merchant, a digital wallet generates a unique token for each transaction — which, in turn, minimizes the risk of your data being intercepted by cybercriminals. Opting for a digital wallet when shopping on public Wi-Fi will allow you to enjoy the convenience of online shopping while significantly reducing the chances of your sensitive information falling into the wrong hands.
Conclusion
The choice between using a credit card or a digital wallet for online shopping ultimately depends on your individual preferences and circumstances. Each option brings its own set of advantages and considerations that can improve your shopping experience in various ways. Knowing the advantages of credit cards and digital wallets when choosing what type of online shopping payment to make can help you get the best deals—and the best value out of your shopping experience overall.
