Dwayne Melancon at Genuine Curiosity and Bren at Slacker Manager share some of their insights on using PayPal and Credit Card.
While Bren praises for PayPal and its ability to use it as a virtual MasterCard, Dwayne says there are something that keeps him using a traditional credit card – Reward Points. With my thoughts, to summarize the advantages of using PayPal and credit cards:
PayPal:
- Very convenient to use it in eBay and iTunes
- Safer than giving out your credit card and its CVV number.
- Ability to create a virtual or physical debit card. Safe. Use and dispose.
Credit Card:
- With my moderate spending every year, I could redeem couple of gift cards in some major stores.
- Waive yearly fee. Use your points, or even smarter, spend enough and call them up to remove your annual fee.
- Most of the web sites accept credit card as a payment method, but PayPal is still not widely accepted.
- Depends on the credit card vendor, they tend to have better fraud protection.
Readers, which one do you prefer, PayPal or Credit Card? and what is your reason?
PayPal tricks – [Slacker Manager]
Paypal or rewarding credit cards? – [Genuine Curiosity]
Well, I don’t use credit cards, so a lot of the arguments for him using a credit card (specifically points) aren’t valid for me. I’d use a debit card before I’d use PayPal though because a lot of times PayPal would just be an extra step in the payment process (transfer money from my bank account to PayPal).
[...] Original post by Leon and software by Elliott Back [...]
And what about security? Isn’t it more secure
Hi i go with credit cards. Paypal is so impersonal and you dont even think about it. simply add your address and done its bought.
By using credit cards it slows you down which in turn makes you think about it and stops sill buys.
Also credit cards can be personal and reflect you. for example i am mad about west ham and everyone can know it when i pull out my west ham credit card to buy something.
So yeh definitely credit card
My choice is also credit card.
You have to remember one big difference – should anything happen, credit card company is always on your side. They’ll freeze the charges and fight on your behalf. With PayPal, on the other hand, it’s a big question which side they’ll be on. They won’t hesitate to freeze the funds in your account if they suspect you of anything. Check out sites like http://www.paypalsucks.com for PayPal horror stories.
PayPal is a lot better these days – a few years ago, they were really bad – nonexistent customer service, hiding their phone number, freezing funds and suspecting accounts with no basis for it, they cleaned up their act somewhat since the eBay acquisition. Still, for me the choice is still credit cards.
Paypal is a bit glitchy. I only use it for Ebay. When I have to.
I think the potential is there though, especially if they really take a strong lead on security issues and identity theft prevention.
I have heard far too many PayPal horror stories (haven’t seen that paypalsucks.com site yet) for me to ever trust them with my money again.
PayPal is still a mostly unusable system, in my opinion. I’d much rather use a credit card, knowing that the cc’s parent company will have my back if anything fraudulent happens with my account. I will only use PayPal begrudgingly when it can serve as a middleman between me and a small vendor who doesn’t have their own credit card handling in place. I’d never use it to actually store or transfer funds, since they don’t have to answer to any of the laws or regulations that banks do.
I’d rather use my debit card, there’s no fees (Even in other countries. Love my bank…) and it makes budgeting a breeze because I’m actually spending the money right then.
However credit cards have much better protection against fraud and misuse than debit cards. Mine also have much larger limits than my debit card.
So if I’m making large purchases, or using it anywhere I’m at all concerned about the security of the card, I’ll use my credit card that is set to automatically pay in full every month.
I’ve only used PayPal for donations. It hasn’t been around long enough for me to trust it when there are so many proven alternatives around.
Personally, I use both at the same time! Use paypal, save your credit card info in it, and bam: protected by both paypal, the credit card company, get your points, and your product. You have to click to change the funding source (it always defaults to your bank account) but its quicker than getting up and hunting down your credit card when you’re comfortable on the couch watching bad daytime tv…
I have one more PayPal horror story to add to the multitude.
I bought something online that was never delivered. After I filed for a refund from PayPal, I was given a partial refund because the seller supposedly didn’t have enough in his PayPal account to cover the refund.
So, if PayPal can’t recover you’re money, there’s no refund to you even if they’ve found that you deserve a refund.
In addition, you are limited to only two or three charge disputes per year.
It would be better to actually get your credit card number stolen than have a problem after buying something with PayPal because with a credit card at least there’s a limit to your liability.
I’ve had a great experience with PayPal. My only beef with them is how long it takes to add funds from or withdraw to my checking account.
Way to keep the dialog going, Leon! Another benefit of credit cards is balance transfers – as I mentioned in my post, I don’t carry a balance. However, if you do, you can often use introductory offers to your advantage and transfer large balances and get much lower interest rates.
On the points front, if you can pay your mortgage, rent, taxes, or tuition on a credit card, you can rack up a lot of points pretty quickly.
Great thread. I don’t really see the question as either/or. I use both. I get points on my credit card for purchases, just as Dwayne suggests, and I use my paypal balance basically as “mad money.” The tricks I mention are just new ways I found to spend and/or access those funds.
PayPal always felt like a walled garden to me (it’s real money, but could only be spent at select merchants), but having the ability to easily access that money in meatspace is a big benefit.
Credit card – it’s very rare that I buy something online where PayPal is even given as an option. However if I were buying from auction sites and the like than I would be more inclined to use PayPal.
that is a very hard choice between the two
I’m coming into this conversation late – but I’m more than happy with PayPal. I’ve used it for more than 800 transactions over the past 2 years (as a merchant) and I’ve only had the 2 problems- both sorted out.
Saying that, as a merchant you really have to accept all payments, so I do use credit cards as an option – but I am seeing a growing trend of more people using PayPal.
For small purchases (say, under $20) 90% would pay by PayPal. $20-$50 and it goes to around 70%. $50-$100 and it’s 50/50. Anything over $100 and it’s credit cards for around 70%.
I think credit cards are much better. PayPal doesn’t reward you for using their services. Credit Cards such as reward cards reward you for using your credit card whether you pay interest or not. A very good example of a rewarding credit card can be found here http://www.officialfootballcreditcard.co.uk/
With pay pal exchange rates can be less favorable than with credit card
Stay the heck away from Paypal unless you have to for ebay. A simple overpayment to a merchant resulted in him refunding the sum to me via paypal. Two weeks after I requested the amount be transferred from paypal to my checking account (from which paypal has no problem TAKING money), I have yet to see the electronic transfer. Worse yet, multiple emails have been ignored. Will send letters to the FTC and BBC, but be warned, your credit card company will be far more responsive to disputes than this shady outfit.
You forgot one other key reason to never use Paypal: Disputes and refunds. Having personally been abused by Paypal stealing (yup, stealing) money refunded to me in overpayment from a vendor with no recourse, I stopped using Paypal. Further, should there be any kind of dispute with a vendor, Paypal has horrible dispute resolution compared to say, Discover. I would never recommend using paypal; they are the total amateur hour when compared to a credit card company.
Paypal is very convenient and you don’t have to supply your credit card details to third parties, but as others have said, their dispute resolution seems to favour the seller not the buyer. I purchased a service recently which I didn’t receive and was told by paypal that I had made a donation so no refund – go figure. I still use them occasionally but I don’t trust their service and wouldn’t recommend them for any purchase where you can’t afford to lose in a dispute.