Paypal has quietly switched their age-old policy of requiring the use of your Paypal balance when you have one. We can now use a credit card or bank account to pay even when there is a balance in the Paypal account.
The new policy applies to eBay purchases and all other Paypal purchases too.
This is quite a shift for a company who was always adamant about pushing us toward using the balance, and not a credit or debit card. We first saw an inkling that this was going to happen back in July with the Visa/Paypal partnership, which followed up sometime later with a Mastercard/Paypal partnership as well.
Previously, the workaround was to withdraw all funds from Paypal before making the purchase; once there were no funds in the account we could proceed to use a card. But this was a pain and didn’t always work out for various reasons (e.g. you hit your monthly Paypal withdrawal limit).
I’m quite surprised that this isn’t being reported on anywhere since it’s a major enhancement for big Paypal users, especially those who receive payments via Paypal (e.g. eBay sellers).
Update: A couple of readers note that it doesn’t seem to be working properly, and it ends up pulling from the balance in the end. Let us know if it works for you.
Hat tip to @vintantran and Milesperday
I just made an ordinary eBay purchase using Paypal with a credit card, and it went properly on the card despite my Paypal balance.
4/24: Ebay ship took from balance instead of going to default cc for me as well.
Eileen, so it gave you the cc option, you chose that, but it took balance anyway?
Chuck, it (ebay/Paypal) didn’t give me any option – it just ran the transaction through. When I said default CC, I mean that I had previously set up my account to default to CC instead of my Bank for transactions. Sorry for my confusing initial response. Let me know if you have any additional questions.
Ah, okay, so that means that if I am seeing the option (as shown in the picture in this post), then it’ll run correctly. Just they aren’t giving you the option. Is that it?
So something is going on. Last couple days when I printed eBay shipping labels my CC was charged, even though I had a balance in my PayPal. This AM it went from my balance again. When I went to ‘edit payment source’ there was an asterisk saying that PayPal balance will always be used first. So it may have just been a glitch before?
It still seems to be working for me. (I didn’t actually checkout, but I was able to select card instead of balance.) Let’s see how it plays out.
Same thing this AM. Printing eBay shipping label and money were taken from Paypal balance, not my CC. Few things to note. I have a business Paypal account and eBay shipping labels are technically a ‘subscription service’. I don’t know if that might have something to do with it. But as I said before, it worked for me few days ago. That’s now 7 SPG points I won’t have, dammit! 😉
Nice! I guess I can close my second PayPal account. I have one for receiving funds and one for making payments (always zero balance) to get around this ridiculous rule.
I got this confused at first. I was thinking I could use a credit card as backup funding on the paypal debit card. It appears I cannot do this.
Heh, I reported this on reddit over a month ago:
https://www.reddit.com/r/churning/comments/5xsnq4/daily_discussion_thread_march_06_2017/dekow8z/
You can always send this information directly to us, we miss still often. [email protected] or [email protected]
Will do! I’ll try to ping you on reddit as well, didn’t think to as I’m still new to the game. Not sure who /u/doctorofcredit is but I’m sure it’s one of you!
Yea that’s me 🙂
Thanks DoC.
I wouldn’t have known about this without this post.
How’s that news? This’s been going on for a few months now, and I thought I had read about it here. I guess it was somewhere else.
This doesn’t seem to solve the problem I’ve been having, which is that when I try to buy something from Paypal Digital Gifts off ebay, it simply won’t let me use a credit card, and tells me the option isn’t even available. This is whether I’m logged in or not, and was true when I logged into my PayPal account (with a balance) or my wife’s (without). I was hopeful that it would work now, but alas! Any ideas if there’s some other force at play here?
Is it giving you the ‘call customer service’ message?
Nope, it’s actually not even letting me click the radio button for credit cards at all. I’ve never bought from them before, so it shouldn’t be a flag or anything. The message it gives me if I click a drop-down next to the greyed-out credit card option is:
“Unfortunately, you can’t use a credit or debit card to pay for this order. This option might be unavailable if:
*We don’t accept credit or debit card purchases on this country’s site
*A seller doesn’t accept credit or debit cards
*You’ve applied a gift card, coupon, eBay Bucks, or donation”
The third point is definitely not the case, the first point *shouldn’t* be the case (I’m in the US) and the second point also seems like it shouldn’t be the case given that other people seem to be able to do it just fine.
What happens when you select PayPal as a payment option? It’s normal for the credit card option to be greyed out directly on eBay for PPDG purchases. They almost always make you login to your PayPal account from the checkout screen. Either way, I find PPDG to be screwy and not worth the hassle. SVM all the way (especially since they resolved their cash advance issue).
That sounded promising, but when I click the Paypal option and log in there, I now get the “Contact paypal customer service” error; it says that payment option isn’t available (without actually even getting to a point of offering me the option of using my PayPal balance or a credit card or anything like that).
The post is kind of dated, but it may be that you need verified bank account before you can use your credit card.
https://www.doctorofcredit.com/the-obscure-limits-of-paypal-digital-gifts/
This post is a bit better for that issue https://www.doctorofcredit.com/the-various-levels-of-paypal-accounts/
Looks like Visa’s CEO threats (2016) did finally worked.