Virtual wallets safer ways to pay online.(CR Money)

Uneasy about spreading your credit-card number around the Internet as you go about your holiday shopping? Several services, including PayPal and Bill Me Later, can offer added security in an electronic world vulnerable to credit-card fraud and identity theft. But they're far from foolproof.

The services are convenient. You register just once with each. Then, whenever you buy something from a participating merchant, you merely click on the service's icon and the transaction speeds through, without your having to retype your personal data. The service pays the merchant by billing your credit card or by dipping into your bank account. For buyers, all the services are free.

Beyond that, each one works a little differently. Here are some basic types:

Auction payment services. To pay for auction winnings or to deal with a small retailer, most likely you'll use PayPal, BidPay, or a similar payment service. PayPal bills your credit card or withdraws the money from your bank or out of your PayPal cash account.

Checkout services. Google Checkout is the newest, but individual retailers like Amazon have long offered express checkout. When you click on an icon, your purchase is billed to your credit card. Google search results now show a shopping cart under a company's name if the retailer participates.

Credit accounts. Bill Me Later instantly checks your creditworthiness after requesting the last four digits of your Social Security number, your address, and birth date. The service sends the first bill by mail, but you can pay subsequent bills electronically. As with credit cards, you're subject to late fees and interest charges, currently 18 percent.

BUYER BEWARE