4 Credit Card Alternatives for Online Shopping in 2024 — How Do They Stack Up?

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Don’t want to use a credit card for online shopping? Keep reading to learn what your options are. 

Is there really anything better than shopping from the comfort of your couch? A good default payment method for online purchases is a credit card, and there are even options that offer excellent perks for those of us who’d rather shop from our phone, tablet, or computer. But what if you’d rather not lean on one of the best credit cards for online shopping? Here’s a closer look at a few alternatives.

1. Debit cards

Debit cards bear a startling resemblance to credit cards in appearance (you know, numbered, rectangular, and often plastic), but that’s where the similarities end. A debit card, unlike a credit card, is directly linked to your checking account — the money you spend using your debit card comes out of the account. If your debit card is part of the Visa or Mastercard network, you can use it wherever those card types are accepted, including online.

Security: If someone gets access to your debit card and makes fraudulent charges, the amount you’ll be responsible for varies based on when you report the crime. Wait too long, and you could lose all the money in your linked bank accounts.

Convenience: Debit cards are just as convenient as credit cards, but you’re limited to spending only what’s in your bank account — using a debit card doesn’t constitute borrowing money.

2. Virtual wallets

Sometimes, you can pay for an online shopping order with a virtual wallet. Options for these include Google Pay, Apple Pay, and Samsung Pay, and as you may have guessed, they’re often tied to your smartphone. These programs store your payment information (such as credit and debit cards) in the cloud.

Security: Your smartphone contains a wealth of information about you, and if you use a virtual wallet, a ton of financial data will also be contained there. Focus on creating strong passwords and other methods of protecting your identity and financial information to make virtual wallets as secure as possible.

Convenience: Virtual wallets are merely a different way of accessing an existing payment method, but they are extremely convenient. If you’re comfortable on your couch and shopping from your phone and don’t want to get up to fetch your credit card out of your wallet, using a virtual wallet program will save you time.

3. Payments apps

Payments apps are another newfangled means of accessing your money in a bank account or a line of credit tied to a credit card. You’ve heard of the big names in the business, which include PayPal, Venmo, and Zelle. These can be used to send money to other people in your network, but you can also use them to pay for purchases.

Security: It’s best to avoid storing money in the app whenever possible, because in some cases, that money might not be insured the way it is in your bank account (thanks, FDIC!). Be wary of paying people you don’t know — and just like with virtual wallets, lean on as many security features (including multi-factor authentication) as are available to you.

Convenience: Payments apps live on your phone, so again, they are extremely convenient.

4. Buy now, pay later

Buy now, pay later is a type of loan that’s offered by a third party (Affirm and Klarna are a few of the bigger companies) to pay for purchases over time. You may pay for a quarter of your purchase initially, then make three more payments over the subsequent six weeks (so one payment every two weeks). This can be a good way to finance a purchase without interest — and in some cases, without a credit check.

Security: BNPL companies aren’t all the same, and Consumer Reports found that only a small handful (Afterpay, Klarna, and PayPal) commit to active monitoring of customer accounts to protect against fraud. If you use a BNPL app, check in regularly to ensure your account is secure and you don’t see unfamiliar charges.

Convenience: You are contracting with a third-party company when you use BNPL, so there’s an additional layer of information you’ll have to provide, but it’s still pretty convenient.

Which should you choose?

As you’ve just seen, all of these payment methods can be easily used to make purchases over the internet. But for my money, credit cards are still the best option. For one thing, the consumer and purchase protections offered by credit cards can’t be beat. If I have a problem with an item I’ve bought (say, it never arrives, and the merchant is unable or unwilling to replace it), I can contact my credit card company. It will investigate, and the money I spent may be returned to me if the problem can’t be resolved and the missing item provided.

Security is another area where credit cards shine. The best credit cards offer $0 liability for fraudulent charges, so if someone steals your credit card, you won’t be held responsible for any of the charges they make. Many credit card companies also offer robust mobile apps that let you lock your card account if the card goes missing, or if you suspect you’re a victim of fraud.

Finally, credit cards offer you the chance to build credit as you borrow money and repay the card issuer. Making on-time payments over a long period shows you’re a responsible credit user and if you are careful about not charging too much and not opening new cards too often, you’ll be rewarded with lower interest rates when you borrow to buy a car or home.

It’s okay to use any of the above payment methods for your online shopping (provided you understand how they work). But credit cards come with the most benefits, hands down.

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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. The Motley Fool has positions in and recommends Alphabet, Apple, Mastercard, PayPal, and Visa. The Motley Fool recommends the following options: long January 2025 $370 calls on Mastercard, short January 2025 $380 calls on Mastercard, and short March 2024 $67.50 calls on PayPal. The Motley Fool has a disclosure policy.

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