Should you pay for Valentine’s Day gifts with credit cards, ‘buy now, pay later,’ PayPal or Venmo? – CNET

There are only a few short days remaining until Valentine’s Day and if you’ve been waiting to buy the perfect gift, we recommend considering your payment options carefully.

When choosing a payment method for your purchases, you should consider factors like security, cash on hand, convenience and budget.

There are plenty of cash-back and rewards credit cards available to choose from. However, shopping isn’t only a contest between credit and cash. The number of options at checkout is growing, both at physical stores and online. In addition to Apple Pay and Google Pay, there are PayPal, Venmo and CashApp. You can even pay with crypto using a debit card from Coinbase or BitPay

Not sure which payment method is best for you? We’ll walk through the benefits and drawbacks of each so you can decide.

Credit cards

A good way to earn cash back or other rewards

There are plenty of reasons to pay with a credit card. Most of them offer safety features, such as EMV chip technology (designed to keep your card information safe), protection against fraudulent charges and purchase protection

Some credit cards also offer rewards each time you spend, like cash back, travel miles or points. If you need more time to pay back purchases, a 0% introductory credit card might be appealing. Plus, strategic credit card use — like paying off your balance in full each month — can help boost your credit score.

On the downside, credit cards are risky if you can’t afford to pay off your entire balance in time. Using them to buy expensive items that you can’t repay within 30 days can lead to interest charges and hurt your credit score. 

“Be honest about your intentions,” says CNET Money Editor at Large Farnoosh Torabi. “If you want to use a credit card as a tool to buy you a few weeks to pay in full and possibly earn points or cash back in the process, that can work in your favor. Otherwise, it’s best to save up your cash before making a purchase.”

Debit cards

A good way to stay on budget

In the most basic sense, paying with a debit card keeps things simple — you can only spend what you already have, since the funds are pulled directly from your checking or savings account. That may make it easier to track your spending, and it could protect you from overspending. 

Some debit cards also provide security features, such as EMV chips, but generally have fewer protections than credit cards. (If you’re still swiping instead of inserting your debit card, we recommend calling your bank and asking for a chip card replacement.) 

Debit cards don’t offer the same perks you’ll get from most credit cards, though. You can’t earn rewards when you shop, for example. And if you’re short on money and need to bridge the gap between paydays, a debit card won’t help.

Buy now, pay later

A good way to stretch out payments

BNPL services like Affirm, Afterpay and Klarna allow you to make a purchase now via an installment loan and pay off the balance over time. If you’re worried about repaying your balance in full at the end of the month, a BNPL service might offer a much-needed respite. When used strategically, these installment plan options could help you stretch out your Valentine’s Day budget with minimal or no interest. 

Each BNPL service works a little differently. Some providers offer 0% financing while others charge interest, and repayment plans could be spread over 30 days or up to 36 months. 

One important distinction between BNPL services and credit cards is the way interest is charged. Credit cards charge compound interest — this means interest accrues not only on the balance borrowed, but also on previous interest charges. BNPL services that charge interest do not charge compound interest, and they allow you to see the total interest you’ll pay over the agreed-upon period of time up front. 

BNPL options may make sense if you need more time to pay back a balance and don’t want to be hit with high interest charges. Just make sure to compare BNPL repayment plans before committing to one. “Beware of any late charges and how the payment company may report your inability to pay on time to the credit reporting agencies. While you don’t need credit approval to use these types of payment services, failure to pay on time could lead to a ding on your credit score,” says Torabi. 

To find a “buy now, pay later” plan, you can shop via the provider’s app or website. You can also choose a BNPL option during checkout at a participating merchant’s website. 

Read more: Here’s how to book a flight using buy now, pay later


A good option for online shopping

If you’re shopping online for Valentine’s Day, PayPal can help protect your payment information while offering additional options for financing gifts. Though PayPal has traditionally been used as an online payment option, it’s now offering QR codes for shopping in participating stores.

Here’s how you can use PayPal to for Valentine’s Day shopping:

  • Third-party processor: Using the classic PayPal service, you can link payments through your preferred payment source, such as a bank account or debit card, to make shopping more secure and convenient. It’s similar to a virtual wallet, but is accepted at more major online retailers. 
  • PayPal Credit: This payment option functions like a credit card, and if approved you’ll be able to charge transactions online, often with deferred interest charges. You can also apply to receive a physical PayPal credit card that you can use at brick-and-mortar stores.
  • Pay in 4: Paypal’s BNPL service allows you to split the total cost of your purchase into four equal interest-free installments. The first is due the day of your purchase, and the others are billed automatically every two weeks. 

Read more: PayPal’s Pay in 4 lets you pay off purchases over time. Here’s how it works


Another way to shop online or at participating stores

Venmo, owned by PayPal, is most popular for allowing you to send money to friends and family, and to easily split shared bills when you’re out to brunch or grabbing drinks. You can also use the Venmo app to pay for online purchases (with select merchants), the Venmo QR code in stores like Target and Walmart or apply for a Venmo debit card. This option might make the most sense if you receive frequent payments through Venmo and want to shop using money in your balance.

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