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After the Auction: Choosing Payment Methods continued ...

Credit Card and Escrow
More and more sellers are turning to the world of plastic as a means of payment for their auctions. Merchant programs are springing up left and right, and auction sites are making it easier for sellers and buyers alike to utilize credit cards (Amazon.com has launched Amazon.com Payments and its 1-Click payment system, while eBay will soon be rolling out its own credit card processing system, which comes in the wake of its purchase of credit card processing provider Billpoint). Why plastic? Well, credit cards are easy, quick, and efficient. Once a buyer's card clears, sellers can send out their merchandise immediately, which is beneficial to both sellers and buyers. Another benefit for buyers is that some credit card companies offer insurance or reimbursement for transactions over $50.

That said, some folks remain wary about giving out their credit card numbers and will automatically forgo credit card-only auctions. Without a doubt, sellers who accept only credit cards are limiting their customer base; however, plastic is becoming more commonplace on the online auction scene, and a number of companies are vying to enter this growing area. Also be aware that several auction sites are now giving sellers the option of restricting their auctions to credit card-owning bidders only. No plastic means no bid.

Escrow is an additional payment option. As a buyer, you'll pay a 5 to 6 percent commission fee for the peace of mind of knowing that a third-party service will be handling the transaction. Once the seller sends the merchandise and you send payment to the escrow service, the company will then hold the payment until you approve or decline the item, or until a specified "inspection period" ends. Escrow should be a definite consideration on higher-priced items. One last note on the subject of escrow: it does add more time to the transaction process.

Using Escrow
Dealing With Deadbeat Sellers
Making Informed Bids