Paypal wants my bank account- what now?

[William Campbell]

After reading many posts I finally decided to use Paypal as a non-verified member and would fund the transaction with a credit card. I tried to send money and was told that my account has limited access and I would need to either enter my social security number, or link my bank account. Other posts have stated that Paypal would then use the funds from the bank account and not the credit card. The whole point is I WANT to use a credit card. What should I do? If they use funds from my bank account and there is suspicion about the transaction, can they hold my funds, and then what would happen?

[chris5264]

Once you set things up with your bank account,,,,upon making payment you will still have a choice....unless you have funds in your PP account,,,I think it makes you use this first.

[alligoat]

After a certain number of transactions, Paypal will no longer let you use your credit card, except as a back-up source of funds. I opened up a separate account at my bank for Paypal only use and typically only keep $100-200 in there. If I make a larger purchase, I transfer funds from my main checking account. Luckily my bank doesn't charge me for this account.

I'm not particularly fond of Paypal either, but I've never had any problems with them. You just need to make sure you never put something stupid on a transaction like 'fake replica Rolex watch' when sending money to a dealer. Follow the dealers instructions and you'll be OK.

BTW, they can take funds from your bank account, all they can do is freeze funds you've sent to someone else.

[krustybrand]

If you start selling things and accepting PP, you should open a separate bank account definitely, as the entire account can be frozen if someone opens a dispute until you agree to settle (refund).

Once you buy more than $1000 on your CC, you will need to link your bank account. This takes time (several days) to complete. After that, you will have the option still of paying with your CC, although PP will strongly discourage it. This is because if you have a dispute with a seller and go through your CC company for a chargeback, PP is SOL. One other payment option you will have is an e-check. What the heck use they are to you is beyond me. Never use them. It takes up to 2 weeks for the funds to clear. In the meantime, they have your money, and the seller will get antsy. If at any time you let your linked CC expire, and you no longer have a valid 'backup' source for your PP account, it will default to an e-check (annoyingly).

The reason for needing the backup source of funding always available is that if you make a PP direct withdrawal to pay for something, the money does not immediately come out of your bank account. PP simply checks to see if you have enough, and a pending transaction is registered with your bank. It actually takes a day or 2 for the transaction to show up and the money to actually leave your account. There is nothing preventing you from then taking all the money out of your account and leaving PP high and dry, with your goods on the way to you. PP then goes after the seller for the funds.

Hope this helps.

I have used PP for several years and over 100 transactions. Never a problem, except when I let my linked CC expire and forgot to update the new card info with PP. Hence my experience with the e-check.

Become PP verified. You will have far more credibility with vendors.

[OiRogers]

I opened up a separate account at my bank for Paypal only use and typically only keep $100-200 in there. If I make a larger purchase, I transfer funds from my main checking account.

+1 to that idea... I've had a 2nd checking account at my bank that has had a 1$ direct deposit from my paychecks going for several years now... I fund it when I need to make a purchase.

I've never had paypal tell me that I need to use that account over a credit-card... but then again, I don't use it that frequently.

And like Krusty suggested... Verification is pretty quick and painless.... open a separate account and have that one verified.

[freddy333]

I agree with the previous posters & especially second Alligoat's suggestion of opening a special bank account for Paypal use only. Once you are verified, you can still use a credit card, but if the card expires, Paypal automatically reverts over to your bank account, which can drained without your realizing it (if you are unaware of your credit card's expiration status). You also have to be careful when paying for something with Paypal, even when you do have a working credit card available to them. Sometimes, & they have yet to come up with a good excuse for this, Paypal will quietly shift your default payment method back to your bank account even when your credit card is good & if you do not catch it when you buy something, the money will come out of your bank account. This has happened to me 2 or 3 times.

Moral - Always read every Paypal payment screen VERY carefully before clicking the Confirm Payment button & do not assume anything.

[Shundi]

Separate bank accounts are essential and I ALWAYS, ALWAYS, ALWAYS fund using my American Express card so I have the option of a charge back... I've been screwed over by Discover and PayPal enough that I recently started using Google Checkout to accept and send money and I highly recommend American Express for these types of transactions... if things go to hell, AmEx always has your back.

[arminvanbuuren]

blah so i dont get this.. :S.. why do we need a separate account again? just say someone file a dispute.. can they take money out of the bank account? what if the bank account has 0 balance? :S what happens then? :S..

im scared of using this now.. coz i just sold 2 watches :S

either way.. most of my cash i kept on netbank anyway.. what if you leave ur original savings account on 0 balance.. would that make a diff? :S

Edited September 27, 2008 by arminvanbuuren