There are a variety of ways to pay for your purchases, and cash is one of the most common and familiar. Both paper money (of varying denominations) and coins are included under the larger category of “cash.” While cash has the advantage of being immediate, it is not the most secure form of payment. If it is lost or destroyed, that money is essentially gone. There is no recourse to recoup those losses. If you have a torn bill and are unsure whether it is still usable, check with your nearest bank. Cash is used exclusively at physical retailers. There is no way to use cash towards your online purchases. For more information about how to use this form of payment, please see “Using Different Types of Payment” and click on the “How to Use Cash” link.
A debit card is an increasingly popular way to pay for both online and retailer purchases. It looks exactly like a credit card, but it functions in a different manner. Unlike a credit card, paying with a debit card takes the money directly out of your checking account. In this way, it is almost exactly like writing a personal check, but without all the hassle of filling out that check. For more information about how to use this form of payment, please see “Using Different Types of Payment” and click on the “How to Use a Debit Card” link. Debit cards can be acquired from your bank. You can request one in person or request one at your bank’s website.
A credit card is one of the most popular ways to make purchases which are more expensive than your everyday buys, although they can be used on purchases of any amount. Credit cards look almost exactly like debit cards, and using them is sometimes referred to as paying with “plastic.” Rather than paying for the item right away, paying with a credit card temporarily defers your bill. At the end of each month, you will receive a credit card statement with an itemized list of all your purchases. Therefore, rather than paying the retailer directly, you pay off your bill to the credit card company. If you don’t pay the entire balance of the bill, the company is authorized to charge you interest on your remaining balance. Credit cards can be used for both online purchases and at physical retailers.
A gift certificate is a less common form of payment, but they are increasingly becoming a popular gift. Thus, they are increasingly becoming a popular form of payment. Gift certificates come in several forms, but they are essentially prepaid certificates with a certain amount of money added to that certificate. They can be purchased for one particular store, several stores, or any participating store. They come in plastic card form, paper form, or electronic form. Depending on the type of gift certificate, they can be redeemed at physical retailers, online retailers, or both. (For more information about online gift certificates specifically, please see “Different Types of Discounts” and click on the “Online Gift Certificate” link.)
For online purchases, Paypal has become the gold standard for payment. Whether you’re using Ebay.com, some other auction site, or an increasing number of non-auction websites, Paypal is the most popular way to pay without sending your bank information through a potentially unsecured website. Paypal is a lot like an online bank account. The money in your account is linked to your checking or savings account, so you can transfer money to yourself and/or pay for your purchases. The benefit of Paypal is that you do not give the retailer your credit card, debit card, or bank information. They simply give you their Paypal email address, and that’s all the information you need to transfer funds. (For more information about using Paypal, please see “Using Different Types of Payment” and click on “How to Use a Paypal Account.”) Paypal accounts cannot be used to make purchases at physical retailers.
For those of you who do not want to use Paypal but enjoy the concept it provides, there are alternative accounts you can set up. Paypal is by far the most popular and established, but similar services can be found at ProPay.com, BidPay.com, FirePay.com, and many others. For a more complete list of alternatives, simply type “Paypal alternatives” into any major search engine. Depending on the site you’re working with, it may charge an annual or one-time fee to set up or maintain your account. They may also deduct varying fees for every payment and/or purchase. Whatever site you choose, make sure to do your research before handing out any personal or financial information. Check out your options, see who is reputable, and find who fits your specific needs.
A money order is not currently one of the most common forms of payment, but its use is increasing. They are a lot like a personal check but without the possibility of “bouncing.” Bouncing a check is when somebody writes a check without having any money in his/her account to cover the expense. When the recipient tries to cash the check, it “bounces.” The recipient cannot get the money if this happens. It is one of the largest liabilities about personal checks, and money orders nullify some of that liability. A money order is purchased with cash upfront, so there is no worry about it bouncing. It is, however, more secure to send through the mail than cash. They are easily redeemed for cash at any post office. (For more information about how to use money orders, please see “Using Different Types of Payment” and click on the “How to Use a Money Order” link.) Depending on the retailer, they may or may not accept money orders. Inquire into whether the retailer accepts this form of payment before attempting to purchase anything.
A web certificate is a relatively new form of payment. Basically, it can be understood as a gift certificate redeemable at just about any retailer, online or otherwise. It is like cash in its versatility, but it is more secure to send and to spend. A web certificate will basically function like any debit card in that it has a unique number to identify the card, and it can be used for both online purchases and purchases from physical retailers. Web certificates can be used anywhere Mastercard or other major credit cards are accepted. Web certificates can either be given as gifts or you can load money on a card for yourself to eliminate the hassle of using cash or checks. For more information, please visit www.webcertificate.com/.
The personal check is a form of payment that is dwindling in popularity with the advent of debit cards and online money accounts. However, it is still one of the major ways to pay for purchases at physical retailers. Personal checks are ordered along with your checking account. They are essentially paper forms you fill out and give to the physical retailer. The retailer turns in the check to their bank, the bank processes the transaction, and a few days later the money is deducted from your checking account. However, as stated, with the increasing trend toward fast payment, checks are seen as timely and somewhat outdated. They cannot be used to make online purchases.
Foreign currency is exactly like any other form of cash. (For more information about cash, please click on the “Cash (Bills and Change)” link in this category.) However, if you are trying to make purchases outside of your country, there are a few things to keep in mind. The exchange rates will be different between countries. If something is listed in American dollars, and you are attempting to pay in Euros, the price you see will have to be converted into your currency. The exchange rates change constantly. For the latest conversion rates and tools, please visit www.xe.com/ucc/. Before you make purchases in physical retailers, your currency will have to be converted into the currency of the country you are visiting. Cash can be converted at your local bank. For more information about how to use foreign currency to make purchases, please see “Using Different Types of Payment” and click on the “How to Use Foreign Currency” link.
Bill Me Later is another safe and secure alternative to offering up your personal financial information when purchasing over the internet or phone. Simply select Bill Me Later at the time of purchase, and you’re done. While other similar companies require long, complicated application forms, that’s not the case when setting up a Bill Me Later account. Simply shop as you normally would, and select Bill Me Later as your method of payment. Follow the instructions from there. If you have any remaining questions about what Bill Me Later is, how it works, or if you want a list of participating merchants, just visit their homepage found at www.bill-me-later.com.