Credit Card Study

General
What are Credit Cards
Advantages of Credit Cards
Applying for a Credit Card
Children and Credit Cards
Credit Card Terms and Fees
Credit Cards - The Right Tool for Merchants
Credit Cards as a Credit Instrument
Credit Cards Codes and Numbers
How Many Credit Cards are Enough
How to Select the Right Credit Card
Interest Rates for Credit Cards
Online Credit Card Usage
Risks of Credit Cards
Using Credit Card Overseas
Where to Use a Credit Card
Zero Rate Credit Card or Not

Major Credit Card Issuers
Wamu credit cards
American Express Credit Cards
Capital One Credit Cards
Chase Credit Cards
Citi Credit Cards
Diners Club Credit Cards
Discover Credit Cards
Mastercard Credit Cards
Visa Credit Cards

Credit Cards and Debt
Avoiding Credit Card Debt
Bad Credit and Credit Cards
Credit card debt consolidation
Credit Card After Bankruptcy
Credit Cards and Credit History
Getting Out of Credit Card Debt
Filing For Bankruptcy
If a Credit Card Issuer Sues You
The Optimal Credit Card Balance
Credit Card Debt Refinance

Credit Cards and Fraud
Avoiding Credit Card Fraud
Credit Card Fraud Protection for Merchants
Famous Credit Card Frauds
Famous Credit Card Law Suits
How Credit Card Issuers Cheat
Merchant Credit Card Fraud
Protect Your Card
What to Do in Case of Identity Theft
How Consumers Cheat

Types of Credit Cards
Business Credit Cards
Debit Cards vs. Credit Cards
Low Interest Credit Cards
Rewards Credit Cards
Secured Credit Cards
Student Credit Cards
Types of Credit Cards
Unsecured Credit Cards
Zero Credit Cards

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Disclaimer
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Online Credit Card Usage

Online credit card usage is a controversial topic – nobody disputes the convenience for both customers and merchants but at the same time with the incredible levels of credit card fraud, it is impossible to forget about the security concerns that accompany online credit card usage. For more than 70 percent of the people who shop online, fraud is a major concern, despite the fact that credit card issuers constantly try to develop newer and newer fraud protection measures.

Shoppers are not the only ones who have fraud concerns. Merchants also have to bear the negative effects of this wide-spread phenomenon because while customers can protest any fraudulent transactions made with their credit card without their knowledge, merchants are the ones who have to make chargebacks for these fraudulent transactions. But still, despite the difficulties, online credit card usage is increasing and in some years the transaction volume used to double every year.

On one hand, it is the convenience of online sales and purchases that attracts new customers and increases the overall credit card usage. On the other hand, as incredible as it might sound, credit cards are a much safer option for online purchases than the other alternatives like money orders, checks or wire transfers. With credit cards, customers still have some protection against fraud, faulty goods or goods that are not delivered at all, which they don't have with the other kinds of payment.

For merchants credit cards might be not so secure as for customers but still credit cards are much better than the other types of payment. One of the major advantages of credit cards for merchants is that when accepting credit card purchases, merchants get their money instantaneously, while with all other types of payment there is a delay, which could range from a few days, to weeks, or even months.

Needless to say, credit card issuers are aware of the security concerns of both customers and merchants and are taking the necessary steps to ensure that frauds are minimized. Probably the steps towards minimizing fraud are more active in the direction of customer protection than in the direction of merchant protection. For instance, there are issuers that offer – free of charge or at a small charge – zero liability for fraudulent transactions. Legally the liability for fraudulent transactions is limited to $50, which is also not so much but a customer feels even more secure when he or she knows that he doesn't have to pay even that.

Zero liability is not the only step that credit card issuers take to protect shoppers. Another initiative is the one-time credit card numbers. The idea is that for each transaction the issuer gives you a different credit card number, which is good only for this transaction (and optionally for consecutive transactions with the same merchant) but can't be used anywhere. This way, even when somebody manages to obtain your credit card number, he or she is unable to use it to make new purchases.

Strangely, the one-time credit card numbers didn't become popular as it was expected and some of the issuers even had to discontinue them. Probably one of the reasons is that one-time credit card numbers look too complicated for the average Joe or Jane to use. Or maybe the average Joe or Jane is completely oblivious about credit card frauds and couldn't care less?

As far as protections for merchants are concerned, they are not so powerful as for shoppers. One of the protections is called checkouts and essentially it boils down to verification of the credit card number and other relevant data before the purchase is made and the goods are shipped. There are also many payment gateways, which offer transaction processing, thus making it easier for merchants to accept payment with credit cards.

One of the worst merchants' complaints regarding online credit card usage are chargebacks. When a transaction is declared fraudulent, the merchant has to charge back a certain amount, generally amounting up to $30 or so. In some industries chargebacks are about 40-50 percent of all transactions, so you probably guess that merchants are not very happy about it. But still, despite all the difficulties that accompany the online usage of credit cards, the industry is developing faster and faster!