My preference is to use a credit card. Discover, if possible. They give you cash back on purchases, make it easy to track spending, and you can use it to pay for the annual PC fee at DAZ, unlike Visa and MC. I've also never had any trouble getting charges approved or chargebacks made if necessary. With Visa and MC, overseas purchases don't always go through. They either call me and ask if I really made the purchase, or I get a letter telling me to call them if the charge is legit. Once they accused me of subscribing to porn sites. (Actually, I was trying to buy Vue d'Esprit.) I can understand the need to be careful, but IME, they're very inept about it. Charges from France are less likely to be fraudulent than charges from the U.S. It's misguided to treat all "foreign" charges the same. Not to mention a PITA for customers who buy online a lot, as I do.

I will use PayPal if absolutely necessary. I know many small merchants cannot afford to accept Visa and MC directly. But I'm very, very leery of using PayPal. They have access to your bank account, but they are not regulated as banks and credit cards are. They don't vet their employees as carefully as banks do. They recently lost a couple of class action lawsuits, so maybe that will force them to shape up.