Using Your Credit Card In Place Of Paypal Funds

When you use Paypal for buying products online, you usually have the option of debiting the payment from either your existing Paypal funds or the credit card associated with it.  There are advantages and disadvantages to doing both, although we do tend to lean towards one of the other payments.  Find out which one and our reasons below.

Using Paypal Funds

Paypal funds can be used to either pay for items online or withdrawn into your bank account.  While you can also just keep it in your account, it’s generally not a good idea because your money just sits there, not doing anything.  Paypal doesn’t pay any interest, giving you absolutely no value for leaving your money with them.

When you pay with your paypal funds, the transaction is protected by Paypal.  After several years of watching Paypal in business, we all know they don’t exactly do the best job of it.  In fact, fraudulent transactions are very difficult to retrieve, often ending up in lengthy and unresolved disputes.  Even worse, using Paypal funds triggers security worse than when using your credit card.  For some reason, Paypal deems fund use as more prone to compromise than credit cards.  As such, a lot of the cases of accounts being “limited” due to suspicious activity are often related to the use of funds.

Using Credit Cards

Credit card use via Paypal, on the other hand, rarely pulls any security triggers.  Even better, you get a second layer of protection for your transactions.  If Paypal won’t resolve the dispute immediately, you can try cancelling the transaction with your bank - often to positive results.

Apart from the security benefits, you also get to enjoy all the other value you derive from credit card use, including points earnings and keeping your account active.  Simply put, it’s way more beneficial to transact using your card than dispensing with the funds directly ever will.