As part of our plan to get out of debt, my wife and I have stopped using credit cards. However, being a modern, internet-savvy consumer, most of my purchases are made online, and some of them are not from the safest sellers in the world. I have had four cases in my many years on the internet where I have had to file a chargeback against a seller to get my money back on a purchase; two were for very small amounts (<$200), one was for $900, and one for over $2500. As I understand it, your right to chargebacks are not guaranteed on a debit card. This has led us to debate if it is really such a good idea to use a debit card for online purchases, versus using a credit cards.

After much discussion, we decided that we would keep an American Express charge card for internet purchases. The advantage of this card is that it requires us to pay the balance in full each month, and it still offers all the protections of a standard credit card. The only downside I see is if we run into trouble after we’ve already paid the balance, we may not be able to file a chargeback — but this is certainly better than the case where the money is already gone from our account before we receive the item!

How do you deal with internet purchases without digging yourself further in the financial hole? Does the Amex route ring true to you?