My wife and I use PayPal a lot. We buy a lot of things through eBay, and I sell a lot of things through eBay and through other venues. PayPal is a good choice for those who want to be able to accept credit cards but don't want to go through the hassle of setting up a merchant account.
I prefer paying by credit card through PayPal. I get cash back, and I get all of the other benefits of paying by credit card, like free float, consolidated expense description, etc.
My wife bought something today, and paid by direct debit instead. She usually changes the payment source to credit card, but forgot to this time. It's easy to do. PayPal does make paying by credit card a bit of a chore.
The PayPal payment options default to the following:
- First, if you have a PayPal balance, that gets hit first. You cannot pay by credit card if you have a balance in your PayPal account last time I checked.
- Second, if there is no PayPal balance, it defaults to a direct debit to your bank account on file. (The “eCheck” option.)
Payment by credit card is never a default, and you can't set it to be a default. Here are the steps we need to go through each and every time I want to pay by credit card:
- Ignore the bright orange “Pay $12.34 USD Now” buttons on the page.
- Find the Payment Method section, and click on the “Change” link.
- Go back and log into my PayPal account to transfer my entire PayPal account balance to my bank account if I don't see the credit card option. (It's free to do this, and I can use my credit card immediately after initiating the transfer.)
- Try again and click on the Credit / Debit card option for payment.
- Confirm that I “still want to make this payment with a credit card” and click the “Yes” button which is right next to a bolded “No” button. (I still have to think each time I click on the Yes button, even after doing it hundreds of times.)
Are you getting the idea that PayPal is trying to trick me into not paying by credit card?
It's all about PayPal's bottom line. If a PayPal user wants to accept credit cards, they need to have either a Premier or a Business account. A Personal PayPal account does not allow that person to accept credit card transactions, but there is no fee taken out for receiving money on Personal accounts. However, on Premier or Business accounts, every payment accepted, regardless of source, is charged a fee.
Now, transfers from PayPal balance are free for PayPal, as it's all an internal shifting around of electrons. Balance transfers direct from a bank account are also free for PayPal, as the bank from which the funds are drawn pays any ACH transfer fee. Payment by credit card, however, is not free for PayPal. PayPal is basically a giant merchant account that fulfills transactions on behalf of about 100 million different user accounts. Each credit card transaction costs PayPal a percentage of the transacted amount plus a flat fee. They pass this on to the premier and business account holders, of course, but they charge the same fee to them regardless of whether it was a credit card transaction or not.
It's been this way for years, and it's a pain, and it still catches me once in a while, and it's not likely to change. Maybe this little guide will help you if you decide to pay through PayPal using your credit card.
I hadn't thought about that much, but it makes sense. Does Paypal allow normal users something like 5 credit card receipts a year? I think I remember that before I had to switch up to premier.
Mrs. Micah: That's possible. I've had a business account for a while so I don't remember.
This is funny you mention this, I feel absolutely the same way. I have done this a few times while wanting to pay for something quickly. They definately make you go out of your way to pay by credit card!
That happened to me too, a few months ago. It was the first time I've forgotten to change the payment "source" – I understand that PayPal does it on purpose for their bottom line, but boy, was I irritated!
That's burned me more than once! I plan my checking account sometimes down to the dollar with paying more than the minimums on CC's. And, when I accidentally choose the default payment option in Paypal (which is VERY easy to do), I have to completely re-strategize my budget and decrease some CC payment amounts.
It really does bug me too since I will use my credit card for rewards on all online purchases.
The warning/information message when you try to use a credit card is also a little over the top in my opinion.
We have only linked paypal to a credit card and not to our checking account, and I found that it lets us make up to $2k in total transactions before it demands we "upgrade". Personally, I've heard too many horror stories about them freezing people's checking accounts to allow them access to ours. So when we hit the limit for credit cards, we simply close the account and open a new one. It's worked for us so far.
Hey, just found your blog through the carnival.
I totally agree with how annoying this is. I used to have an eBay business and bought a TON of stuff with PayPal. I got really good at remembering to switch to credit cards, but sometimes… and often I was buying things that were expensive so it really hurt when the charge was debited instead of paid for with my business card.
Have you seen the new buttons? Rather than YES and Bolded NO they have "pay with credit card" (normal font) and "PAY WITH BANK ACCOUNT NOW" capitalized and bolded in the confirmation screen.
I've noticed this, and it annoys me mightily. Bad PayPal, leave my bank account alone! I want the protection of paying by credit card, because I don't trust Paypal or Ebay to protect me from a scam or malicious trader.
I have a personal account with PayPal and I could not find a way to change from bank account to credit card today.
I call Pay Pal and ask the girl can I remove my money on the bank so PayPal will go to next route – charge to my credit card? She said yes but bank might charge me fees.
I guess I will remove my bank account so PayPal have no way to charge to my bank account. With credit card I can get my reward point I can pay the bill few weeks later. There is totally no reason to pay by my bank.
PayPal just don't want to let their user to set default payment method on our account, they give you choices but take you forever to change it and want you to forgot that you have that choice.
They want cash. They don't want to pay extra fee.
I have a personal account with Paypal, i created it the last week of April. I linked my Credit Card to Paypal, after getting the 4 digit code i verified it.
I was trying to pay for an online subscription with my credit card through paypal, since it's the only option that i can choose. I noticed that paypal won't let me get over $100, I used my credit card in paying my online subscription which totaled to $75, 3 weeks ago. This night i was trying to pay $40, paypal won't let me, it just gives me the error that i have to log on to my paypal account because of the transaction details, I tried logging on to my account but it won't let me. I tried 40 times and it didn't let me with my credit card. After the 40th attempt it gave me the error that my credit card can't be used in that transaction. I called citibank, and asked about my previous transactions, they said that i had 40 transactions with a charge of 1 with no currency, I'm assuming that they charged me $1 every failed transaction, is this true? or did i misunderstood the agent that gave me the list of my recent transactions?
Ha I tried to change my primary email from one email to another that is already on PP. They want my 16 digit CC# to do it – as verification! Are you kidding me?! A CC# to change an email address? I don't think so. I will cancel the account and open a new one with the email I want. Idiots!
ps
The CS Rep emails me in Nigerian Scam language.
"we are require ring you to ….."
My experience with PAYPAL is HORRID I am trying to get my Pasword Changed Also I would like to change to change my credit card. I have had my IDENTITY STOLEN and MUST change MY CREDIT CARD
I have tried 5 TIMES to get both fixed. Your info. is hard to understand. I am a SENIOR CITIZEN AND I CAN NOT FIND THE ICONS TO ACCOMPLISH THIS JOYCE GOODMAN HELP
I completely agree with you regarding how annoying this policy is. I actually stumbled on this thread while searching for if there is a way to set my credit card as the default payment option. Clearly, there isn't.
Actually you're wrong about PayPal charging the fee no matter what, though. There are several merchants that I do business with regularly (that have premier seller accounts) and I know for a fact that when I pay with my bank account, they don't get dinged the service fee. Maybe this has changed very recently, but I think if you pay via PayPal funds or checking account, there is no associated fee.
Not to commandeer the discussion, but something else you all ought to watch out for on Paypal is international transactions (ie, buying ebay items in other currencies / using your paypal acct to store other currencies, etc). Paypal has a WHOLE other set of rules for this game, and they aren't pretty.
Case in point, I just moved to the UK from the US. Before I left, I decided to list a lot of my stuff on ebay UK (instead of ebay US) to try and earn a few GBPs to give me something to start with once I was here (so I didnt have to exchange dollars right away). My idea was that once I arrived in the UK, I would set up a bank account and add it to my Paypal acct in order to transfer the GBP out; easy peasy, right?
Well, paypal doesnt like that….and again, it's all about money. Paypal actually will not allow you to add a foreign bank account to your paypal account (I must have missed this in the fine print somewhere).
I called paypal to try and sort this mess out, asking if they could do anything for me such as write me a check in GBP, or similar, anything to avoid having to convert the money to dollars (using Paypal's lousy exchange rate). They suggestion that I open up a UK paypal acct, add my UK bank account to it, then transfer the funds to myself. Seemed easy enough, so I did, and when I tried to transfer the funds (from me US to me UK), I got hit with a huge fee! (something like $60 on the amount I was transferring).
I decided I was not going to take that lying down, so I refunded the money to myself and this sent up some kind of red flag with paypal, who in turn suspended both my accounts. When I called them to ask them what was going on, I was appalled at their inability to do anything about anything. After going through the rigamarole to unblock my accts, they told me, in the most helpless was possible, that there was no way avoiding the fees. I begged and pleaded, explained that I had been a paypal customer for nearly 10 years now and that I had already payed a fee on the exact money I was tranferring (when the buyer payed me), but even the highest supervisor (they only allow one tier) claimed that there was nothing she could do about it. It was "in the system," as they say.
I think that's the strategy, really. Separate the employees who know and can accomplish anything from the customers, so the customers give up before they get anywhere. Bravo, Paypal…..never again.
I setup an extra bank account with no fees / no min balance to use with PayPal.
Some online banks will offer this, I set up mine through Bank of America / Hello Kitty account.
It came with the cutest debit card, but I don't plan to store much money in it. Just didn't want to give PayPal access to my paycheck.
absolute sham of an operation… paypal is basically out to take you for every measley penny they can get… and about the employee post i totally agree… because there is no head of staff that we as customers are abel to talk with.. we are subjected to talk to equal employees that are trained to talk us down and always refer to the "SYSTEM". absolute wank if you ask me..
You rock, thank you for this information. I can't believe how complicated they made this.
Time for the government to regulate these crooks who mess with people's bank accounts. Let me default to my credit card like EVERY SINGLE OTHER MAJOR INTERNET STORE.
Now that the messiah, my man, Barrak is in charge, believe me, things is gonna change.
I had to default on my PayPal credit card (lost job) did not owe them much $$ about 1K.
Question. I am selling what I can on ebay and am accepting PayPal. Can they stop me or take the money??? Not sure in Miami……
This sort of misdirection is exactly why I closed my PayPal account last summer.
Do you think it is possible to make the credit card your default by removing the bank account after you have added and verified a credit card as backup payment source? I haven’t tried this yet, just thought I’d see if anyone knew anything. Can you remove the bank account if it is the only bank account on the paypal profile?
Thanks
Just found something of interest:
“Here’s another key bit of advise though…lets say you add your CC and make a payment, however you forget to change the funding source. By default, the funding source will be Instant Transfer from bank account with a back-up funding source of the primary CC. Due to a recent policy change though, if you call PayPal directly at 1-888-221-1161 within 24 hours of the payment (the sooner the better), the PayPal agent can manually skip the attempt at drafting from the bank and go straight to the back-up funding source of the CC.”
PayPal is such a great help to most of us that I’ll put up with a bit of inconvenience. Let’s face it: most people treat the money they have in their PayPal account like Monopoly Money: “hey, I still have a balance, so I’ll spend it.” People spend more freely than with their credit card, and MUCH more freely than with a check or cash. So… I’ll put up with the rest.
Just tried calling paypal at the 800 number posted above but no dice. they refused even though I called the regular number immediately after I realized I had made the mistake. calling 800-221-1161 help either. I’ll be closing my paypal account once the transaction is totally complete.
I was ticked off about this too and found these postings on a google search. It seems that Paypal has now allowed us to change the funding source to credit card, but they don’t advertise it. You just need to go to the Payment Method when checking out to change it to credit card. My concern was that I didn’t have enough funds in my checking account and made the mistake of not keeping track of what was there last month and going into overdraft, costing me $30. So when I just tried to firgure out how to use a credit card with my paypal account, I couldn’t figure it out and found this article.
That’s interesting. But would you happen to know, by any chance, why the Payment Method option does not appear when I try to send money? Thanks!
Commented on another post but I think Paypal must pay extra fees for users using CC or else they would make this an option to always use Credit Card.
Looking out for their bottom line!
Paypal can be a real pain both for the merchant and the consumer. I recently visited a website where one online marketer said once he switched from pay pal to a merchant account his sales increased dramaticly. People like convenience and familiarity Pay Pal can seem overwhelming to a first time user.
Another important aspect (what caused me to look for solutions) of paying with your CC vs. direct transfer is buyer protection. PayPal’s policy does nothing for items received in poor condition.
I am currently on the losing end of a $1k+ purchase. PayPal immediately denied my claim because I did receive an item. Unfortunately, instead of the brand new item agreed upon, and invoiced for, I received a used and damaged item.
My next step was to do a “chargeback” (which I did not fully understand at the time) through my CC company. But guess what? Bank transfer, no CC, no protection.
I do a good amount of business through PayPal on both the buying and selling end. It never bothered me that PayPal was making a small percentage off me. It definitely does bother me that I could potentially lose money that would be protected otherwise.
RE: the previous comment about no protection – I have received damaged good at least twice and never had a problem getting my Paypal account credited. BUT – I am irritated because I guess I can’t pay with my credit card if I have a balance in my Paypal account? – OMG that is so irritating! I was ggogling for a way to work around it – and I guess there is none.. 🙁
Your horror stories are nothing compared to mine. My Paypal account was closed down by ebay. Yes, ebay. My EPN account had been disabled they said because I had broken some rule regarding how to promote ebay. When I replied in protest, they didn’t respond, instead a few days later ebay does a charge back on me for the past two months of payments I had recieved amounting to about $5k, and left a balance in my account of $500. When I call paypal asking whats going on with my account, they said there is nothing they can do, I need to talk to ebay. Then they tell me, oh, but there is no number we can give you for ebay.
Let me repeat that, EBAY CLOSED DOWN MY PAYPAL.
Anybody else find this kind of activity simply criminal? You cannot operate a business with a TOS that simply allows you to take peoples money. I was about to seek legal help, only to find that ebay/paypal has a long ugly history of really making things ugly for anybody who attempts to sue them for their conduct or to attempt to get their money back.
Don’t trust anything to do with this company.
It is the GREED…
Paypal wants to force us to either use the Paypal brand credit card, or fund the purchase directly from the bank accounts. That way they can take as much from us(both the sellers and the buyers)
I will still keep my paypal, but I will minimize the use of paypal and use the regular credit cards instead. If we ask the sellers every time the option of paying with credit card, I am sure the sellers will realize CC is still the more popular option.
Good to see this article so I know that it’s not just me being too dumb to figure out how to set credit card to be default. This hassle just makes me not use PayPal altogether since most non-eBay online stores accept major credit cards or PayPal, so you can just pay with credit card straight to the merchant rather than through PayPal.
I have had so many bad experiences with Paypal. Even after following the steps in this article, they still don’t let me pay with my credit or debit card because of “protection from fraud, etc…”. It’s sad!
Thank you for this information. I was getting pretty frustrated by not being able to pay with a credit card for an ebay auction. After doing a quick google search, I found your information. I appreciate the help 😉
Truly, its so frustating…Today again I missed another brilliant deal at the final checkout page… delayed in selecting the credit card option. If they dont improve…this article is going to get many more feedbacks.
I wish it didn’t have to be rocket science to pay with a credit card. They seem to get plenty of my money each month with processing fees, they shouldn’t be that hard pressed for cash.
Hey guys, just so you know, if you “accidentally” pay via Bank Account, you can call PayPal directly at 1-888-221-1161 within 24 hours of the payment (the sooner the better) and the PayPal agent can stop payment and redirect to your Credit Card. I just did this 5 minutes ago successfully.
Just one additional comment. I didn’t see this referenced in the article or comments. When I switch to a credit card, PayPal implies that the transaction is less private and that the vendor may get my credit card information. Here is the message I received:
Quote:
Before changing your funding source to a credit card, consider the benefits of paying with your bank account:
* No finance charges or bills to pay
* Your bank account details are kept private
Just a quick clarification of my previous post.
I don’t know whether or not a credit card transaction is less secure than a bank transfer. I suspect they are equally secure. I suspect PayPal is using this as a scare tactic to help steer you back to a bank transfer.
keep in mind one reason Paypal wants the payment by bank account is that they do not want to be stuck with chargebacks directly from the buyer’s credit card company on a bad transaction if they pay via credit card instead of the bank transfer.
I am at close to my 10k limit for credit card purchases and used to be verified but I have since closed my bank account that was used for PayPal purchases only ( and I kept very little money in it ), using the credit card option for each purchase.
I am now looking for alternative to it, moneybookers or paymate seem like the only 2 e bay allowed alternatives worth a shot and both used credit cards for payments
Thank you so much for those info!
Here’s my 2 cents:
I’m french, and here, transfers from the bank account to paypal take around 10 days, it’s a pain!
So I kinda had to find my own acceptable solutions, after reading your article.
What I do is: I send as a gift my entire paypal balance to my wife (which is free). I’m then able to proceed with a credit card payment. Finally my wife cancels the gift so that the money comes back to me.
Also, converting my paypal balance in Euros to USD can be quite a good idea. Paypal won’t force me to use my USD balance for payments in Euros. And it’s still an acceptable solution since I buy like 30% of stuff in USD. I even get to choose the right moment to convert the money… when the currency exchange rate gets interesting!
For each purchase I make with a merchant who has setup a PayPal store it usually defaults to PayPal balance funding, which I would rather have than hitting my bank account.
But I don’t find it a hassle to pick which payment I will use and I’m surprised at all the complaints. I don’t hear anyone complaining about selecting Visa vs. MasterCard at Amazon.
Sure you get the bugging message, but is it really that difficult to pick the form of payment for each transaction?
I have the same feelings as the author and sick of changing the payment method every time. I just tried to make a payment and didn’t see CC as a payment method so realized that it is because of paypal balance, so had to first initiate a transfer and come back to finish the transaction.
Paypal lets you use a credit card as a default source at least for subscription payments. Recently when I tried to make a payment for woot purchase using paypal, it didn’t even ask me to select the source and completed the purchase with my bank as source, more like Amazon’s 1-click buy. I later realized that this was because woot sets up itself as subscription with paypal, and the last time I bought something from woot was so long ago that I couldn’t recollect anything, and so it was very puzzling. However, with a bit of research, I found that you can go into Profile -> “More Options” -> “My Money” -> “My preapproved payments” (update) -> “Set Available Funding Sources” and uncheck all your bank accounts and Save. You can also set default “Conversion Options” for credit card (whether to use paypal conversion of not). However, if you have a paypal balance, it will still be used first, so you can never be ensured 🙁
i hate paypal they trick u every time. I use credit card so the have to pay fees. wish there was another company to take payments
the problem is they try to run as bank withdral and still charge inflated processing fees so the can pocket the money. Tricky tricky
you rock!!!!!!!!!
thanks so much for sharing this tip! been trying to figure out all day why i couldnt use my cc on my pp acct..thanks!!!
Thanks for the 2008 eBay column. I just started selling after being a buyer for many years. I had an account balance and then bought something today. But I was stumped going through the usual PayPal payment process; I couldn’t figure out what happened to the CC option for payment, until I did a Google search and found the answer here. So, I did an EFT, then back to my purchase and put it on my credit card/PayPal. Thanks for the info!
Ok i think i know the answer but wanted to check first!!!!
I am purchasing an item from eastern europe which is costing £2500, but want the safest way to do this in case the item never arrives in the worst case scenario! I have been given option of bank transfer, echeque or paypal using bank or debit or credit card but with additional 3.4% fee for this. By the looks of things the paypal option using my cc seems to be the only one which will give me complete protection and ill be able to get my money back if worst case scenario. Will this be the case? And i assume the 3.4% extra fee is correct for paying the seller using this option as i have read they get charged for a business account payment.
Looking forward to confirmation please. Thanks guys.
When you pay a transaction using Paypal with Credit Card, who gets to keep the transaction fee?
Usually when a merchant receives a payment using a credit card, the credit card company takes 3% off the total. Paypal also takes 3% from the seller for every item sold and paid with Paypal.
Now, when a buyer pays a transaction with a credit card but via Paypal account, does this mean the seller will lose 6% of his total to fees? That sounds a lot. If the seller loses only 3% to fees, who gets it? Paypal or the Credit Card company? Or do they split (1.5% each)?
That’s strange. I used paypal for years in my business account. Recently I signed up for their credit card. Last time I made a big purchase, I saw that my balance (in the thousands) had not gone down. I realized later that the purchases I was making were going on the card rather than coming from my balance. When I set it up, it defaulted to this.
Just log out of paypal, clear your cookies and the credit card payment method will show up.
Never use paypal to pay for anything if possible. Two reasons:
1. Refunds. I overpaid a merchant by 10 bucks, and he refunded it via paypal. Paypal then transferred the money to their own accounts, with the money disappearing from my account and with no records or trace of it. They then ignore all emails.
2. Disputes- God help you if you have a merchant dispute, as paypal’s dispute resolution group is nonexistent except in the form of automated responses to keep you occupied. Stick with a reputable CC company to get results.
Yes. I’ve been dealing with this issue since last night. I purchased a rather expensive item over Ebay, went to pay via Paypal, using credit card, and received an error screen. Here’s the verbiage from that screen.
“Return to merchant and try a different payment method
Error Message
This payment cannot be completed and your account has not been charged. Please contact your merchant for more information.
Return to merchant and try a different payment method
We are not able to process your payment using your PayPal account at this time. Please return to the merchant’s website and try using a different payment method (if available).
Site Feedback Site Feedback
PayPal. The safer, easier way to pay. For more information, read our User Agreement and Privacy Policy.â€
I spoke to Paypal on the phone and was told that there must be a problem with the seller’s account, “..like an email address doesn’t match…” or something. They told me to have the seller send me a Paypal invoice for the item outside of Ebay with an item number noted. They also told me that I’d have the same buyer protection if I did this, however, later in the conversation, “would cover” changed to “should cover”. It was disturbing, to say the least. The seller got back to me this mornign after contacting Ebay/Paypal. She said that she was told that the problem must be on my account, that I should call Ebay and be talked through it. I’ve been using Ebay since ’97, and have over 350 feedback ratings, mostly as a buyer. I know how to work it.
So I call Paypal to find out why we’re being told different things, and am told that the problem is due to my account being under some sort of “security screening” or something. I asked what triggered such a thing, and was told that “nothing triggers it”, that all Paypal accounts are going through it. Funny how they didn’t tell this to me last night, nor the seller this morning. It sure looks like they’re trying to force me into using cash over credit card. The item is over $1,000, so it does cost them extra. That’s too bad for Ebay/Paypal, isn’t it? Like another poster above, I don’t trust Ebay/Paypal to come to my rescue if an expensive purchase turns bad. They get more heavy-handed every year and it’s becoming very difficult to deal with them at all. I’m minutes from cancelling the transaction due to Ebay prohibiting me from paying using my normal, and expected, method.