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PayPal or Credit Card—Which is Safer?

Find out whether PayPal or a credit card is the best way to stay safe from fraud and prevent identity theft when making online purchases.

By
Laura Adams, MBA
5-minute read
Episode #266

PayPal or Credit Card?

A reader named Sarah F. asks:

I make a lot of purchases online—but I worry about identity theft. Would using PayPal, instead of a credit card, limit the number of people who have access to my confidential information and keep me safer?

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Over 100 million people use PayPal to buy products and services online—but how does it compare to using a credit card?

If you’ve never used PayPal, it’s a service that allows you to pay online—using money in your PayPal account, your bank account, or with a credit card—anywhere a merchant displays a PayPal checkout button.

PayPal offers some nice benefits, but using it is no guarantee that you won’t become a victim of fraud. Because it’s so popular, thieves like hacking into PayPal accounts just as much as they like stealing credit card numbers.

However, it’s easy to beat the cyber criminals at their own game and stay safe if you follow these 7 tips:

Tip #1: Treat PayPal Like a Bank Account

PayPal is just like any other financial account when it comes to security—you must review the account activity at least once a month so you can nip any fraudulent charges in the bud. PayPal notifies you when your monthly statement is ready, which makes it easy to remember to log in and take a look.

Many times online criminals won’t drain an account by taking one big withdrawal. Instead, they usually begin by stealing small amounts, like $5 every few days. Thieves know that most people are not monitoring their accounts carefully. If you don’t refute the charges, a criminal will start stealing larger amounts. 

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About the Author

Laura Adams, MBA

Laura Adams received an MBA from the University of Florida. She's an award-winning personal finance author, speaker, and consumer advocate who is a frequent, trusted source for the national media. Money-Smart Solopreneur: A Personal Finance System for Freelancers, Entrepreneurs, and Side-Hustlersbook is her newest title. Laura's previous book, Debt-Free Blueprint: How to Get Out of Debt and Build a Financial Life You Love, was an Amazon #1 New Release. Do you have a money question? Call the Money Girl listener line at 302-364-0308. Your question could be featured on the show.