Will This Trend Kill Using Credit Cards to Shop Online?

Many or all of the products here are from our partners that compensate us. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.


  • Peer-to-peer payment (P2P) services like Venmo, CashApp, and PayPal are convenient ways to pay for items online.
  • Using credit cards in combination with a P2P service may give you the best of both worlds.

Is it time to ditch your credit card?

For many people, shopping online is the most convenient way to make purchases. It's also no surprise that more and more people are using peer-to-peer payment (P2P) services like Venmo, CashApp, and PayPal to pay for things online. P2P has become an increasingly popular alternative to credit cards. As more people begin using these services, they could become the new standard for shopping online. So should you drop your credit cards permanently? Before you do, learn the pros and cons of using P2P services so you can decide if they're right for you. 

Pros of peer-to-peer payment services

There are a few advantages to using peer-to-peer payment services like Venmo, CashApp, or PayPal to pay for online purchases. The biggest benefit is security. With the rise of credit card fraud in recent years, these services offer an extra layer of protection. Since you're not sharing your credit card information with the merchant, hackers can't access your financial information. 

In addition, you can purchase things online using P2P without racking up more credit card debt. Credit card interest rates can be as high as 30%. So if you're trying to avoid more debt, using one of these services can help you stay within your budget since you can't spend more than what you have in your account. P2P is also a convenient way to send and receive money, as well as pay for items online. 

Featured offer: save money while you pay off debt with one of these top-rated balance transfer credit cards

Cons of peer-to-peer payment services

There are a few disadvantages to using P2P for online purchases. For example, you typically won't earn any credit card rewards such as miles, points, or cash back. You may be able to earn rewards if your credit card is linked to your P2P account and you select that option when paying for the products online. While most online retailers accept credit and debit cards, not all of them accept alternative payment methods like Venmo, CashApp, or PayPal. As a result, shoppers who don't have a credit or debit card may be left out in the cold. You will need to check before you try to use them. 

Each P2P service also has their own refund policies and some offer more protection than others, so you will need to do your own research. If something goes wrong with your purchase and you need to dispute it with the merchant, you may have a harder time getting your money back since you're not dealing with a traditional credit card company. Credit cards have more established levels of fraud protection. With P2P, once the money is sent, it is like cash,so it is difficult to get back. Lastly, using a P2P account to pay for your products won't help build your credit history or increase your credit score. 

Combine both for the best of both worlds

So should you use Venmo, CashApp, or PayPal to pay for your online purchases? Ultimately, it depends on your individual circumstances and what's most important to you. If earning credit card rewards and building your credit is important to you, then using one of these services probably isn't the best option. However, if protecting your personal information is a priority or you're trying to stick to a budget by only spending what's in your account balance, then P2P may be the way to go. 

However, using both credit cards and a P2P service can offer the best of both worlds. P2P was originally set up as a way you can send or receive money from people without going through a bank. It is a great alternative to holding cash. P2P services can be a great complement to your credit cards. By linking your credit card to your P2P account instead of your bank account, you can earn points as well as protect your financial information. 

In addition, payment and fraud protections that credit cards offer are extended to any payments made through P2P apps, even if made to an individual. Like any financial transaction, it is important to do your due diligence before purchasing anything online. Combining the features of both your credit card and peer-to-peer payment (P2P) services like Venmo, CashApp, and PayPal may possibly give you greater peace of mind.

Alert: our top-rated cash back card now has 0% intro APR until 2025

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a lengthy 0% intro APR period, a cash back rate of up to 5%, and all somehow for no annual fee! Click here to read our full review for free and apply in just 2 minutes.

Our Research Expert

Related Articles

View All Articles Learn More Link Arrow