Best Credit Cards for Online Shopping

What is an Online Shopping Credit Card?

While all credit cards can be used to shop online, some are better suited than others for this type of purchase activity. There isn’t such a thing as a pure online shopping card, but there are many that offer better protections and incentives in the form of cash back, points, or miles.

Using a credit card to shop online is safer than other options, such as a debit card tied to a checking account, because credit cards have more consumer protections under the law. Many card issuers go beyond the requirements of the law to offer additional safeguards against fraud and unauthorized use.  

The credit card networks (Visa, Mastercard, Discover, and American Express) provide $0 liability coverage for any and all unauthorized purchases. Debit cards—both those tied to checking accounts and prepaid debit cards—don’t offer this level of protection, unless transactions are processed as a credit at the point of sale instead of as a debit. A consumer’s liability with a debit card is generally limited to $50 if they notify their bank or issuer within two business days of card loss or fraud, which is a much more strict requirement compared with credit cards.

Online shopping for merchandise and food delivery (both for groceries and take-out orders) was already growing exponentially before the COVID-19 pandemic and is now a critical part of life. With that in mind, we've reviewed the rewards cards currently in the market to find the ones that offer the best combination of rewards earning opportunities and online shopping protections. 

What Should You Consider in an Online Shopping Card?

These are the critical factors we think you should consider when evaluating credit cards for online shopping.

Protection from unauthorized use

Almost all credit cards offer $0 liability protection for unauthorized purchases, but it’s still important to verify that in the terms and conditions before applying. Even for cards that don’t offer this protection, federal law limits losses resulting from credit card fraud to $50, so at least there is a backstop in place to protect consumers if they are victims of fraud. While these protections cover offline transactions as well online ones, they are especially important for online transactions, which often entail greater fraud risk for the consumer.

Texts for unusual activity

This customer service security feature can alert you immediately should your card be used without your permission or knowledge.

Online chat

Being able to easily communicate with a customer service representative is important for quickly resolving any security concerns. 

Ability to freeze or lock your account

This feature lets you lock down your credit account so no one can use it, in case you believe it has been compromised.

Virtual card numbers

Some issuers offer virtual card numbers for one-time use. That can provide a virtually impenetrable level of security when shopping online, and can be especially useful when you’re shopping on smaller or international websites that may not follow the latest security protocols.

Bonus rewards for online spending

Before selecting a card for online shopping check to see how it would reward you for your existing online spending patterns. The best cards for online shopping provide bonus rewards for purchases made with certain online retailers or in particular spending categories.

Access to online shopping portals

Some card issuers have created online shopping portals that provide extra rebates or discounts for merchandise and services.

How Should You Use a Credit Card Online?

As most of us know by now, online shopping is tremendously convenient, and the widespread advent of free shipping has made it all the more economical. However, it also requires taking some extra precautions.

While it's tempting to store your credit card details on the secure sites of your favorite online retailers, that can expose you to undue risk if the retailer’s server is ever compromised. Some of the biggest data breaches in recent history have exposed shoppers’ personal information, including sensitive credit card data, and this information ends up for sale to the highest bidder on the dark web.

When appropriate, also consider using a virtual card number, as described above, if your card issuer offers that option.

Methodology

Information Gathering

In order to track and assess the U.S. domestic credit card market, we gather scores of data points on more than 300 cards. This data is collected manually from both card-issuer websites and publicly available sources. 

To ensure our information is as up-to-date as possible, we deploy automated tools that monitor changes in such key data as annual percentage rates, introductory rates, introductory periods, bonus offers, rewards earnings rates, fees, and card benefits. We then rapidly make any needed updates to our card listings, reviews, and recommendations to ensure that readers have the most reliable information and advice. 

Initial Scoring

Once we collect credit card data we organize it in our database according to features, which roll up into feature sets (such as rewards, interest, fees, benefits, and Security/Customer Service). Each individual card feature is assigned a star rating score on a 1 to 5 scale using a formula. For instance, for a one-time bonus score we would use a formula like (if the bonus is $500 or greater, then assign a score of 5; if $300-$499 then 4, and so forth). Weighting of scores. Once all of each card’s features have received a score we apply a weighting factor to each feature to arrive at a weighted average score for each card (according to the general category in which it resides, such as travel rewards). 

This weighting process allows us to assign significantly more emphasis to the attributes important to a particular category, and downplay those that are less relevant to it. That allows us to objectively identify cards that stand out in their category, and why they do. For example, we apply significantly higher weight to such travel-specific features as airport lounge access or primary rental car insurance than we do to attributes such as interest rates or fees that might be more strongly considered for other categories, such as balance-transfer cards.

Earnings rates

Another critical factor we consider when rating and ranking travel cards and other types of rewards cards are the cards’ effective earnings rates. We first calculate the average value of points or miles for all the rewards cards in our database, a painstaking process that entails collecting all airline fare data by carrier across scores of popular domestic and international city-pairs along with per-night hotel charges at all major hotel brands. 

The required points and miles for air travel or hotel stays from the various reward programs are then used to calculate an effective earnings rate for each card. That allows our readers to make the most informed choices. By putting a card’s large one-time bonus or earnings rates into context across many dimensions and card features, they can more readily weigh the card’s benefits relative to its costs. Uncovering the true but often opaque redemption value of rewards points or miles is, we feel, the only reliable way to make cogent choices among competing value-based cards.  

Card Features We Score

As mentioned in our methodology explanation, we place significant weight on certain travel-related features in determining our ratings for each card. Specifically, we place over 50% of our overall assessment score on the combination of the following factors:  

• Maximum value of any one-time bonus, whether in points or miles.
• Initial card spending required to earn any bonus.
• Redemption value of the bonus miles or points.
• Global card acceptance, as detailed by the four card networks (Visa, Mastercard, American Express and Discover).
• Options to redeem points or miles with travel partners, both airline and hotel.

Another consideration is the cards’ coverage, if any, in these travel-related areas: 

• Car-rental collision insurance, whether primary or secondary.
• Travel accident insurance.
• Lost or delayed luggage insurance.
• Insurance for trip cancellation, interruption, or delay.
• Cell phone loss or damage.
• Roadside assistance and towing.
• Emergency travel medical/dental benefits.

General, non-travel related features that we consider and score include:

• Interest rates, including both introductory and regular APRs for purchases and balance transfers.
• Fees, including those for annual membership, late payments, cash advances, and foreign transactions.
• Security/customer service features.
• Other non-travel benefits, such as free credit scores, ID theft protection, and contactless payment capability.

How We Reach Our Final Assessments

We rely mostly on the objective scores created by our rating algorithms to determine which card is chosen as the best travel rewards credit card, as well as the ones deemed best for one-time bonuses and as co-branded airline and hotel choices. 

However, we may make some adjustments from time to time, to both features and weightings that could affect rankings, which can be influenced by subjective input from our credit card experts. Any potential modifications will be consistent with Investopedia’s belief that consumers are best served by travel cards that:

• Provide superior value in earning awards travel.
• Charge reasonable interest rates in the event that balances are carried month to month.
• Charge fewer and/or more reasonable fees.
• Provide solid customer service, based on the number and quality of customer service features
• Have helpful and protective security features.