How to use a credit card for online purchases

Information verified correct on October 25th, 2016

You’ve got a credit card and you’ve got your favourite shopping website open—now what?

Online shopping is becoming an increasingly common way to spend money. No longer do you have to fight the crowds for parking or stand in an endless queue to make a purchase. Now you have the world of shopping at your fingertips and can choose to buy from a huge range of items from Australia and overseas.

As you can’t exactly hand cash through your computer screen, many people opt for credit cards when shopping online. However, it’s important to understand how these transactions work in order to protect yourself when you’re making purchases online, as well as how you might be able to save yourself some money from fees.

Most online retailers accept a straight credit card payment for purchases made on their site. The most widely accepted cards are usually MasterCard and Visa, with American Express and Diner’s Club sometimes restricted in their use or attracting a higher surcharge. Paying directly with any credit card may come with a surcharge, so be sure to check this before you make your purchase.

Compare credit cards for online purchases

Rates last updated October 25th, 2016
Purchase rate (p.a.) Balance transfer rate (p.a.) Annual fee
St.George Vertigo Visa
Introductory offer of 0% p.a. for 18 months on balance transfers and 1% p.a. for 12 months on purchases, plus a low annual fee.
1% p.a. for 12 months (reverts to 13.24% p.a.) 0% p.a. for 18 months $55 p.a. Go to site More info
HSBC Platinum Qantas Credit Card
Receive 60,000 bonus Qantas Points on eligible spend within 3 months. Enjoy access to premium benefits and complimentary insurance.
19.99% p.a. $199 p.a. Go to site More info
Citi Rewards Credit Card - Platinum Card
Take advantage of your online shopping habits by earning 1.25 points per $1 spent on international purchases.
20.99% p.a. 0% p.a. for 24 months with 1.5% balance transfer fee $199 p.a. annual fee for the first year ($249 p.a. thereafter) Go to site More info
Newcastle Permanent Value+ Credit Card
Enjoy a competitive annual fee and interest rates on purchases, cash advances, and balance transfers.
11.49% p.a. $49 p.a. Go to site More info

How to use a credit card for online purchases

If you’ve decided to use your credit card to make a purchase online, follow these steps to make sure your purchase and payment will be successful:

  • 1. Check the website is secure by using the guidelines in the section below.
  • 2. Browse through the site and find the products that interest you. Once you’ve found something you want to buy, add it to your virtual shopping cart.
  • 3. Continue through to the checkout and review your order. It’s important to ensure that all the quantities and prices are correct as per the product listing.
  • 4. Enter your credit card information. You will usually have to select the type of card you’re using and enter the expiry date, the name on the card, the credit card number and the CSV (three numbers on the back of a MasterCard and Visa, and four numbers on the front of an American Express).
  • 5. Review your order before you submit your payment. The final price will include shipping and the total cost of the item, plus the quantity you have ordered. Ensure your shipping and credit card details are correct and then you can confirm your payment.

How to shop online safely

Unfortunately, while there are a lot of reputable retailers who offer their products online, there are also some disreputable ones who are looking to take advantage of people offering their credit card details. Luckily, there are a few things you can do to avoid these sites and ensure your safety online.

Firstly, you should check the security of a site. If a site has ‘https’ in it’s address then it is a secure site, but if it simply has ‘http’ then it is unsecure. You can also check if there is a padlock in the URL bar. You may also see different colours appear in your address bar, each of which means something different:

Security status bar colourMeaning

Red Padlock
The website’s certificate is out of date, not valid or has an error.

Yellow Padlock
The website’s certificate cannot be verified.

hite Padlock
The certificate has normal validation and communication between your browser and the website is encrypted.

Green Padlock
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.

Things to remember when using a credit card online

When you use a credit card to make a purchase online, there are a few things you should be keeping in mind. Retailers are allowed to charge a certain fee or surcharge when you use a credit card, which is expressed as a percentage of the total sale. The surcharge must be a reasonable percentage that would be used to cover the costs of putting through the card payment. While these can be around two or three per cent, some retailers charge fees as high as $30 per person per booking. Make sure you check what you are being charged before you make the purchase.

Read more: How to avoid credit card surcharges

Alternative online payment options

  • BPAY.
    If you are looking to pay bills online, you might want to consider BPAY. This allows you to pay registered billers using a specific code directly using your own internet banking service. This is also an option for businesses who are receiving payments. BPAY is a free service as the transaction uses money directly from your account.

About ways to shop online

  • PayPal.
    PayPal is a service that allows you to make purchases online. Once you set up your account, you’re able to link a credit or debit card and then make payments online. PayPal is a relatively widely used service and so is an option to consider when making purchases online. PayPal also offers a refund service where you can lodge a dispute against an online retailer and potentially get your money back. PayPal is a free and secure service that you can use to make purchases online while still using your credit card or even bank account.

About shopping with PayPal

  • Debit card.
    Depending on the type of debit card you have, you may also be able to pay with a debit card when shopping online. If you have a MasterCard or Visa symbol on your card, you will most likely be able to make a purchase online. If you’re unsure, you could always just try and make a purchase and see if it is accepted, or simply talk to your card provider. Even though this is not a credit card, you may still incur a surcharge, so remember to take a look at what the costs of the purchase are.

Information about debit cards

  • Prepaid card.
    If you don’t have a debit card but would still like to make online purchases, you can buy a prepaid charge card that allows you to load funds and shop online. These cards are helpful when you want to keep control over what you spend, and they may also limit the chance of you making impulse purchases.

Information about prepaid credit cards

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Credit Cards Comparison

Rates last updated October 25th, 2016
Purchase rate (p.a.) Balance transfer rate (p.a.) Annual fee
Virgin Australia Velocity Flyer Card - Balance Transfer Offer
Enjoy a 0% p.a. balance transfer offer for 18 months and also earn 2 bonus Velocity Points in the first 3 months on everyday spend.
20.74% p.a. 0% p.a. for 18 months $64 p.a. annual fee for the first year ($129 p.a. thereafter) Go to site More info
ME Bank frank Credit Card
Enjoy a low and consistent interest rate on purchases and cash advances, combined with no annual fee.
11.99% p.a. $0 p.a. Go to site More info
HSBC Platinum Credit Card
Receive a full annual fee refund and save $149 if you meet the $6,000 spend requirement. Enjoy a balance transfer offer and platinum card benefits such as complimentary insurances and concierge services.
19.99% p.a. 0% p.a. for 15 months $149 p.a. Go to site More info
NAB Low Rate Credit Card
The NAB Low Rate Card offers 0% p.a. on purchases and balance transfers for 15 months. This card also comes with a low annual fee.
0% p.a. for 15 months (reverts to 13.99% p.a.) 0% p.a. for 15 months with a one off 3% balance transfer fee $59 p.a. Go to site More info

* The credit card offers compared on this page are chosen from a range of credit cards has access to track details from and is not representative of all the products available in the market. Products are displayed in no particular order or ranking. The use of terms 'Best' and 'Top' are not product ratings and are subject to our disclaimer. You should consider seeking independent financial advice and consider your own personal financial circumstances when comparing cards.

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