How to use a credit card for online purchases

Enjoy the ease and convenience of online shopping by learning how to pay securely with your credit card.

As retail spaces evolve from traditional brick-and-mortar storefronts to merchant websites, online shopping is an increasingly popular way to spend money. Online shopping offers a number of perks, such as not having to vie for parking, not having to deal with crowds and not having to queue up to pay. On top of that, you also have access to international brands and overseas trends since you can shop anywhere in the world.

The familiarity, security and global acceptance of credit cards make them one of the most popular payment options when shopping online. But they can also attract surcharges and additional fees at the virtual checkout.

We will take you through the steps for making credit card online payments and look at the key factors to consider when paying with plastic. We’ll also take a look at other payment options. With this information, you will be able to make the most of your credit card and your online purchases.

Comparison of credit cards with purchase protection

Rates last updated October 15th, 2019
Name Product Purchase rate (p.a.) Balance transfer rate Annual fee Product Description
Latitude Low Rate Mastercard
9.89% p.a.
$69 p.a.
Offers a competitively low interest rate and annual fee, plus up to 55 interest-free days on purchases.
HSBC Platinum Credit Card
0% for 12 months, reverts to 19.99% p.a.
0% p.a. for 12 months
$129 p.a.
0% p.a. on purchases and balance transfers with no BT fee. Plus, a yearly annual fee refund when you spend $6,000 and 2 lounge passes per year.
Virgin Australia Velocity Flyer Card - Balance Transfer Offer
20.74% p.a.
0% p.a. for 22 months with 1% balance transfer fee
$64 p.a. annual fee for the first year ($129 p.a. thereafter)
Save with a 0% p.a. interest rate on balance transfers for the first 22 months, with a 1% balance transfer fee. Plus, a reduced $64 first year annual fee.
HSBC Platinum Qantas Credit Card
19.99% p.a.
0% p.a. for 12 months
$0 p.a. annual fee for the first year ($79 p.a. thereafter)
Save with a $0 first year annual fee and a long-term balance transfer offer. Plus, complimentary travel insurance.
St.George Amplify Signature - Qantas
19.74% p.a.
0% p.a. for 6 months
$139 p.a. annual fee for the first year ($279 p.a. thereafter)
Get 80,000 bonus Qantas Points when you spend $6,000 in 90 days and 2 complimentary Qantas Club lounge invitations per year.
Bank of Melbourne Vertigo Platinum
0% for 15 months, reverts to 12.99% p.a.
$49 p.a. annual fee for the first year ($99 p.a. thereafter)
Offers a 0% p.a. purchase rate for 15 months, a reduced annual fee for the first year and complimentary travel insurance.
American Express Platinum Edge Credit Card
20.74% p.a.
0% p.a. for 12 months with 1% balance transfer fee
$195 p.a.
Receive a yearly $200 Travel Credit and complimentary domestic and international travel insurance, plus 0% p.a. for 12 months on balance transfers.
Emirates Citi World Mastercard
21.49% p.a.
0% p.a. for 9 months
$149 p.a. annual fee for the first year ($299 p.a. thereafter)
Receive protection through guaranteed pricing scheme, purchase cover insurance, and extended warranty insurance.
Citi Rewards Platinum Credit Card - Balance Transfer Offer
21.49% p.a.
0% p.a. for 26 months with 1.5% balance transfer fee
$0 p.a. annual fee for the first year ($199 p.a. thereafter)
Earn reward Points per $1 spent, take advantage of a 0% p.a. for 26 month balance transfer offer, plus $0 first year annual fee.
American Express Velocity Platinum Card
20.74% p.a.
0% p.a. for 12 months with 1% balance transfer fee
$375 p.a.
Get 50,000 bonus Velocity Points when you spend $3,000 for the first 3 months. Plus, 100 Status Credits and luxury travel perks.

Compare up to 4 providers

Steps for using a credit card for online purchases

The way you pay for your shopping online varies depending on the store you visit, with each website offering a slightly different checkout process. But there are general steps you need to follow to shop and pay with a credit card online.

Check the website’s security

It is crucial that you shop only at secure encrypted websites. Secure websites have URLs that begin with “https://” as opposed to “http://”. They also display a padlock symbol in the URL bar just before their web address to indicate a secure connection. See the next section for more detail.

Browse the site

Once you’ve established that the website is secure, you can shop confidently and fill the shopping cart with your desired products.

Select your items

Go to the online checkout, which is usually available by clicking on the shopping cart icon near the top right hand corner of the page. Review your items and follow the prompts to make payment when you’re ready.

Provide your shipping details

Next, you will be required to key in your shipping address and select your shipping method.

Enter your credit card details

These include your credit card billing address, credit card type, card number, expiry date and the CCV/CVC number (usually on the back of your card).

Check the total price

Review your final bill again before submitting payment, keeping in mind that shipping costs and payment fees may have been added during this step. Note that any potential credit card fees that your credit card provider may charge will not be displayed here.

Shop safely online.

Firstly, check the security of the site. If a site has “https” in its address, it is a secure site, but ‘http’ indicates that it is unsecure. Secondly, check if there is a padlock icon in the URL bar. The colour of the padlock will help you determine a page’s security:

Security status bar colour Meaning
The website’s certificate is out of date, not valid or has an error.
The website’s certificate cannot be verified.
This represents normal validation and indicates that the communication between your browser and the website is encrypted.
Communication between your browser and the website is encrypted and the certification authority has confirmed the website is owned or operated by a business that is shown on the certificate.

How to shop online safely

What else do I need to know when I use a credit card online?

Keep the following details in mind to help ensure that your card stays secure and affordable.

  • Credit card security. Most credit cards come with a range of security features for protecting your card from fraud and theft, such as fraud monitoring services and zero liability policies.
  • Device security. While most of us know we should use antivirus software on our desktops and laptops, there’s less awareness that phones and tablets also need protection. If you’re planning to shop on a mobile device, consider installing security software to safeguard yourself from malware, spyware and malicious websites.
  • Surcharges. These are charges imposed by the merchant, usually as a percentage of the transaction value. American Express and Diners Club cards typically tend to attract higher surcharges than Visa or Mastercard products.
  • Acceptance. Visa and Mastercard offer worldwide acceptance at millions of online shops. American Express cards tend to have lower acceptance but can still be used at most major online stores. Diners Club cards have the lowest acceptance of these four options. You may want to have a backup card or payment option ready when shopping online to avoid delays in the purchase process if the card you want to use isn’t accepted.
  • Foreign transaction charges. These fees are typically applied for transactions made overseas or in a foreign currency, including online shopping with international merchants. The foreign transaction fee is on average around 3% of your transaction value. Note that this fee may be charged when a merchant is based overseas, even if the purchase is made in Australian dollars. Check with your credit card provider and individual merchants to find out if a foreign transaction fee will apply for any specific purchases you plan to make online.
  • Rewards. Since rewards credit cards may offer different earn rates for foreign transactions, you may earn fewer or more reward points per dollar spent online than you would in a local store. Check your credit card’s product disclosure statement for applicable rates.
  • Complimentary insurance. Purchase insurance, or purchase protection, is one of the common complimentary extras offered by credit cards. This protects eligible purchases made on your card from accidental damage, loss or theft up to 90 days from your purchase date. You may also enjoy price protection or refund protection on certain cards.
  • Interest charges. Your card’s standard interest rates apply to online purchases just as they would to in-store transactions. This means that online purchases are eligible for interest-free days, providing your card offers an interest-free period and you meet the requirements for it (usually by paying your balance in full by the statement due date). After your interest-free days have passed, you will need to pay the regular purchase interest rate. Conversely, buying foreign currency, travellers cheques or even gift cards online usually counts as a cash advance transaction. This means your payment would attract a cash advance fee and a cash advance interest rate, which is often higher than the purchase rate.
  • Payment processing. It can take a couple of days for online purchases to show up in your credit card account. Where possible, aim to transfer money for the purchase straightaway to avoid interest charges on transactions that are ineligible for interest-free days.
  • Returns policy. Take note of the store’s return policy in case you need to request an exchange or refund. If your credit card offers refund protection, this means your insurer will cover the cost of a refund for an eligible purchase should the store refuse you one.
  • Chargebacks. In the event a merchant refuses to process your refund, you may also request a chargeback by your credit card provider. This involves reversing the transaction, which may only be approved under certain conditions.

women with credit card and gadgets

What else can I make purchases online?

You can also consider these other online payment methods for your Internet purchases:

  • BPAY. BPAY offers a free and convenient way to pay your bills online with registered billers by keying in their specific Biller code. While only Australian organisations and utility companies previously participated, an increasing number of online retail stores are registering as BPAY billers. Discover which online stores accept BPAY.
  • PayPal. PayPal is an Internet payment service that provides an additional layer of security and convenience for making online purchases. Once you’ve created your account, you can link multiple credit cards, debit cards or bank accounts to it, and then make online payments from any of these accounts using PayPal. This eliminates the need to fill out your credit card and billing details each time you make a purchase, which saves time and reduces the risk of theft. PayPal also offers customer protection in the form of refunds if you successfully lodge a dispute against the online retailer. On top of that, PayPal is free and secure and still lets you earn reward points on some cards.
  • Debit card. If credit is a potential issue, using your debit card may ensure that you don’t overspend. Depending on the type of debit card you have, such as a Visa or Mastercard, you will most likely be able to make an online purchase with it. Note that you may still incur a surcharge with your debit card, so watch out for any additional costs.
  • Prepaid card. If you don’t have a credit card or debit card but would still like to make online purchases, consider buying a prepaid charge card that allows you to preload funds on it. These cards are helpful for controlling expenditure, and they may also help reduce impulse purchases.
  • Travel money card. Similar to a prepaid card, the travel money card caters to card usage abroad or online. You can preload your travel money card with multiple currencies and lock in exchange rates, ultimately saving on foreign currency fees that your credit or debit card may charge. Loading and reloading fees may apply.
  • Gift card. Gift cards may also prove to be a useful alternative for online shopping with specific retailers, such as iTunes. Sometimes you can also take advantage of discounts on gift card purchases. You can purchase most gift cards in-store or online but make sure you check their specific spending requirements and acceptance options before you purchase them. Also note that gift card purchases on a credit card are usually processed as “cash advance transactions”.

No matter how you decide to pay for your online shopping, make sure to pay attention to security. Also watch out for any additional charges that may accompany a particular payment method and compare payment methods so you can choose one that suits your individual shopping habits.

Images: Shutterstock

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