smart spending

5 ways fear of the Web costs you

4. Travel -- ticketing charges. These days, the airline industry is ruthless about cutting costs and squeezing every last dime out of their customers. Airlines don't like paying for hundreds of customer service representatives to help you make travel arrangements, and prefer online bookings. So if you plan on using an agent to book your next flight, be prepared to pay for the privilege. Delta Air Lines levies a "direct ticketing charge" of $20 for every ticket booked over the phone with the help of a Delta representative. And they're not alone -- United Airlines, US Airways and Continental Airlines also charge between $20 and $25 for a telephone booking.

Even Southwest Airlines -- often celebrated for its customer-friendly service -- plays a perky recording saying "lower fares may be found on Southwest.com" when you dial the company's reservations number.

While rental car companies rarely charge a specific fee for phone or in-person sales, they typically offer deals online that aren't promoted or even offered in their stores.

"My personal experience is that you get more online. One time I dropped by a major car rental company in Tulum, Mexico. They quoted me one price. I went next door to an Internet cafe and booked it for half-price," says Robert Reid, U.S. travel editor for Lonely Planet, a best-selling publisher of travel guides.

5. Shopping -- missed deals. Forrester Research predicts that online retail sales will reach $229 billion by 2013. Why are shoppers flocking online?

"Prices online are generally lower than prices in the stores. And often, you don't have to pay sales tax," says Linda Criddle, president of LookBothWays Inc. -- which promotes online safety education for consumers -- and co-author of "Using the Internet Safely for Seniors for Dummies."

Those who avoid shopping online miss out on some great deals, says Steve Baker, vice president of industry analysis at NPD Group.

"Clearly, right now, online retailers can sell for less because they have some cost advantages in terms of overhead," Baker says. While he expects that gap to narrow, Baker says restricting your shopping to brick-and-mortar stores will cost you in the long run.

"Retailers are going to have deals online that aren't available in the stores; they're going to have deals in the stores that aren't available online," Baker says. "If you're looking for the right product at the right price, you can't restrict yourself to one channel."

Just as with brick-and-mortar stores, the more you shop around, the more likely you are to get the best price.

Instead of pricing an item at two stores that sell electronics in your area, the Internet allows you to price it at 200 stores all over the country.

"One of the big advantages of shopping online is being able to comparison shop very easily," Wasow says.

10 ways to tame your webphobia
For many people, fear is the main obstacle to doing business online, according to Linda Criddle, president of LookBothWays Inc. and co-author of "Using the Internet Safely for Seniors for Dummies."

So how can consumers get the benefits of transacting online and minimize the risk? Criddle offers the following suggestions:

  1. Use credit cards, not debit cards, to buy online. Credit card companies offer better consumer protections in the event a fraudulent purchase is made from an account.
  2. Use anti-virus and anti-spyware software. It's important to keep this software up to date.
  3. Update your operating system. Whether it's Microsoft's Windows, an Apple operating system, such as OS X, or something else, it needs to be updated frequently so flaws can be fixed, which helps keep you safe.
  4. Be careful with browser settings. Mainstream browsers like Mozilla's Firefox and Microsoft's Internet Explorer come prepackaged with fairly strong security settings. Criddle suggests keeping these default settings.
  5. Install software that checks out sites when you search. Criddle tells consumers to install an add-on for their browser that tells them whether a site is safe. She recommends Web of Trust or McAfee SiteAdvisor, both of which have free versions.
  6. Turn on your operating system's firewall. Most operating systems now have a built-in firewall to keep unwanted visitors from accessing your computer.
  7. If you have a wireless router, make sure it is password-protected. Thieves can access your home network through an unprotected router.
  8. Learn to spot a scam. Look for bad grammar, strange e-mail addresses and names in the "To:" and "From:" lines of an e-mail. Avoid disclosing sensitive information in response to any e-mail.
  9. Create secure passwords. Never use real words. Instead, substitute numbers for letters and words -- 2 for "to" or 1 for "L" -- to create easy-to-remember but hard-to-crack passwords. "Passwords don't have to be hard to remember," Criddle says. "They just have to be hard to guess."
  10. Be coy with your password hints. Many sites ask you to provide the answer to a question in order to prove your identity. Criddle suggests making up an answer that you'll remember but a thief wouldn't know. "If they ask, 'What is your mother's maiden name?' 'Purple butterfly,'" she says.

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