Pay With PayPal — and get strong-armed into giving up your credit card protections.
PayPal's relentless efforts to trick you and intimidate you into giving up your credit card protection by paying directly out of your bank account is way too annoying.
It's bad enough that PayPal will not allow me to set my credit card as my default payment option. Every time I pay for something using PayPal, I have to make sure I remember to click the tiny little "Change" link (Click #1) to change my payment source to my credit card. I then get sent to another screen where I have to click a radio button (Click #2) to select my credit card, then click a "Continue" button (Click #3) to confirm my choice.
But PayPal doesn't think that goes far enough. They just have to throw an additional obstacle in your path by making you confirm that "Yes, dammit, I want to pay using my credit card despite your dire warnings and misleading attempts at intimidation." (Click #4!!!!!)
Here's my initial step in paying for an eBay purchase with PayPal. Notice that it always defaults to Instant Transfer from my bank account, and PayPal doesn't permit users to change the default payment source to a credit card, so the bank account is always pre-selected.
The link to change your payment source is not at all obvious in the initial payment screen.
That's the first click I make to change my payment source.
Then, on the next screen, I have to do 2 clicks to actually change it:
Two more steps to change my PayPal funding source
I'm ready to go now, right? I'll get back to the payment screen where I can click "Continue," confirm my payment, and be on my merry way?
Nope. PayPal isn't done yet. Here's the next screen:
PayPal uses visual tricks and vague warnings to try to intimidate me and trick me into using my bank account.
Notice that the "Use My Bank Account" button is highlighted in yellow, visually suggesting that's the one I should click.
It's bad enough that PayPal throws this screen in my path as an obstacle. The highlighted button is customarily the one that will confirm your previous choice. Especially in a situation like this, where I've already had to make 3 very deliberate clicks to make my choice, the assumption should be that I really meant it.
Take a look at the information PayPal provides:
Both bank account and credit card payments are sent instantly.
Well, that's only sort of true, and it's definitely misleading. A payment out of my bank account is indeed debited from my bank account instantly, but that payment is considered an "echeck." It takes a few days to clear through to the seller's account — and the seller will not ship my item until my payment has cleared. The money is gone from my account; PayPal earns interest on that money during the float; but the seller doesn't have access to it, and paying that way will delay shipment of my purchase.
Transactions paid with a bank account will not accrue credit card finance charges.
Hey, PayPal! I pay my Visa balance in full every month. My credit card payment does not accrue finance charges either.
Transactions paid with a bank account let you stay in control of spending and avoid credit card debt.
Hey, PayPal! I control my spending and my debt regardless of how I pay for my little $10 item on eBay.
No matter how you pay, you get 100% protection against unauthorized payments sent from your account.
Hey, PayPal! My credit card account gives me more and better protections. If there should be an unauthorized payment, I'm not out-of-pocket the amount of the payment until the dispute is ruled in my favor. I have a longer chargeback period with my credit card. I have more options for reasons to dispute a charge.
If there should be a dispute, my credit union that issued my Visa card is a disinterested third party with no dog in that fight, whereas PayPal (owned by eBay) stands to make or lose money and tick off either the buyer or the seller depending on what decision they make. PayPal is not regulated like banks and credit unions. PayPal is just a private company with a nearly incomprehensible user agreement that probably includes clauses that say I won't sue them and I agree to abide by all their decisions and that gives me no rights at all.
There is absolutely no benefit to using my bank account, and there are several benefits to using my credit card. There really isn't anything bad that PayPal can say about using my credit card, but they sure do try hard to convince me that it's a bad idea.
Enough already, PayPal. Please, let us get on with our buying and selling without all the nonsense and strong-arm tactics. There's no call to try to make me panic over using my credit card to buy stuff online; I do it all the time.
While I agree with your frustration, switching to your credit card doesn’t offer any extra protection when used with Paypal. If you dispute the charge with your credit card company, you’re disputing a Paypal charge, not a charge with the merchant selling you the goods. As long as Paypal was authorized to make the withdrawal (which they were), then the charge will be upheld with your credit card company. If you want real credit card protection, don’t use Paypal at all. (I use them only when forced to do so.)
BTW, in Paypal’s defense, they don’t pay to take money out of your bank account, but they do pay to take money out of your credit card. It’s not about playing the float w/your checking account. It’s the fee they pay as a credit card merchant to get money from your credit card, and that fee eats up a significant portion of their profit.