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How To Make Online Purchases Using A Checking Account

How To Make Online Purchases Using A Checking Account

Checking accounts, until the widely adopted use of credit cards, were and still are incredibly flexible financial tools which allow consumers to make and receive payment in virtually all situations. Just because new technology comes along, it does not minimize the importance or relevance of using a checking account for online purchases. While checking accounts don't offer the same fraud protections and instant authorization of credit cards, there are still many options to make online purchases using you personal checking account.

Debit Cards

Debit cards are easily the best alternative to a credit card when using a checking account to make an online purchase. Debit cards offer all the flexibility of credit cards for online, over the phone and in person transactions because they use the same network of credit card processors to authorize payments. The only difference is that debit cards are tied directly to consumer checking accounts and funds are withdrawn to pay a retailer. As far as the online retailer is concerned, they are processing a standard credit card and no additional measures are necessary.

Check Over the Phone

In reality, a physical check is often not necessary when a retailer is receiving payment for a product or service. Only certain pieces of information need to be submitted to a bank or credit union to process a check. If an online retailer accepts a check over the phone, then a consumer only needs to provide the routing number, account number, check number and the amount authorized to make payment. The retailer will then confirm with the bank that the check has been submitted and normal processing will occur in a day or two.

Mail a Check

One of the most inconvenient but still fully acceptable means of payment is mailing a check directly to a retailer. Smaller websites may provide this option if they're unwilling or unable to incorporate e-commerce functionality into their web site. This is no different than mail order catalogs where you would select what you want to buy, determine the amount necessary, write a check and then mail it to the retailer. If the online retailer is okay with this form of payment, the only drawback is a significant delay between the time it takes for the mailed check to reach its destination, be deposited and clear the banking system and finally have the retailer mail your purchase to you. If you can stand the wait then mailing a check is still a viable option.

PayPal and eChecks

Many consumers with bad or poor credit may be unable to qualify for a credit card and unwilling to keep a debit card on hand due to fear of fraud or misuse. Yet another option is to use PayPal or submit an eCheck when making online purchases. PayPal acts as an intermediary and allows consumers to transfer funds from their checking account to their PayPal account which can then be used to make online purchases. eCheck's are slightly different in that they function like a check over the phone but a form is specifically provided on an retailer's website for check information which is then verified much like a credit card. PayPal is much more ubiquitous and free for consumers to create and fund an account.

Online Banking

Many banks and credit unions offer free online banking for their members to use when paying bills. This option is most often used for making monthly payments for utilities and credit cards but you can also use it to make one time payments via check. This depends on which online retailer you're dealing but some retailers do not need immediate payment or will bill you after the fact with an invoice. In these cases, you can use your financial institution's online banking feature to make payment. Some retailers will be able to receive payment as a wire transfer within a day or two. Other online retailers may be too small and in these cases a physical check will be cut by your financial institution to the retailer.

Image by: Nelson Wu