The way you pay for your best friend's gift this holiday season can make a big difference, especially if something goes wrong. Credit cards offer the most protection when it comes to unauthorized transactions and getting charges reversed for goods that arrive broken or not on time. However, in light of all the craziness with the credit card industry and for shoppers who routinely carry a balance, you will likely end up paying more by using credit cards and should put your cards away.

But here’s how credit cards stack up with other commonly used forms of online payment and some other issues to consider:

Credit Cards
• Limited liability for unauthorized transactions: Under federal law, you are only on the hook for up to the first $50 in unauthorized charges once you notify your bank.
• Right to dispute a charge: You have the right to dispute a charge if you return an item to a store and the retailer fails to credit your account
• Right to withhold payment: You do not have to make any payments while a disputed charge is under review.

Debit Cards
• Limited liability for unauthorized transactions: If your card is lost or stolen, your liability depends on when you report it to your bank. If you report the unauthorized transaction within two business days, your liability is limited to $50. However, if you don’t report it within this time frame, you can be liable for up to $500. If your card was not lost or stolen, you must report unauthorized charges within 60 days to avoid losing any money.
• No right to dispute a charge
• No right to stop payment for the purchase
• If you decide to use a debit card for online purchases, you should link it to a separate account to protect yourself from a temporary loss of all your money and better protect yourself from identity theft.
If you're concerned about using your credit card number online, several services, including PayPal, Amazon Payments, Google Checkout, and Bill Me Later let you avoid entering your credit-card information directly on merchant sites. Other services like eBillme and Bill Me Later allow you to pay online without using a credit card. Before signing up for any of the services, keep this advice in mind:

PayPal
If you’re planning on using PayPal, you should link it to a credit card without a balance on that card, and then pay off your balance each month to avoid interest charges on your purchases. Linking your PayPal account to your credit card will ensure that you enjoy all the same protections afforded to credit card purchases. If your PayPal account is linked to your debit card, you’ll have more limited debit card protections.

Amazon Payments
Amazon Payments enables consumers to link their credit card, bank account or maintain a balance in their Amazon Payments account. The same advice for PayPal applies to Amazon Payments, of linking a credit card without a balance on that card and paying off the balance when it comes due. Linking your Amazon Payments account to your credit card will ensure that you enjoy all the same protections afforded to credit card purchases.

Google Checkout
Same as PayPal and Amazon Payments. Link your Google Checkout account to your credit card, and pay off the balance every month, to maximize the protections you’ll get with your online purchases.

Bill Me Later
The large draw to sign up for Bill Me Later may be the “No payment for 90 days” advertisement, but there’s a catch. In order to take advantage of this promotion without paying much more than the purchase amount, you need to make the minimum payment on time (which can be due as early as 25 days after the transaction date), and pay off the balance in full by the due date. If you don’t pay off your balance when it’s due, you’ll be hit up with a 19.99% interest rate, which is applied from the purchase date and some more additional fees.
Bill Me Later’s protections are similar to certain credit card protections. You are not on the hook for unauthorized charges. For billing errors, you need to submit a written notice to Bill Me Later within 60 days of discovering the error. The consumer does not have to pay the amount in question, but finance charges will continue to accrue and must be paid if the investigation does not result in your favor.

eBillme
You provide an email address to obtain your ebill. To make a payment you can either pay online through your bank account or make a payment for $4.95 at a Walk-In Location, which include convenience and wireless stores. Under the eBillme Satisfaction Guarantee, you can make a return for up to 90 days for purchases under $500 with original and complete packaging, with a $1000 annual cap. There is also a laundry list of exempted items such as jewelry, computer software, CDs and others.

One Last Holiday Shopping Tip: Think twice before buying gift cards. A number of retailers have filed for bankruptcy and shuttered their doors since last holiday season. Unfortunately, there is no guarantee that you’ll be able to redeem the full value of your gift cards from struggling or bankrupt retailers.

For additional gift card tips, view our Gift Card Video Blog.

Considered Layaway? Our Consumer Reports blogger, Tightwad Tod offers tips on Layaway.

Click here for other money saving holiday spending tips.