Paypal. Which is best way to avoid fees?
 

Hello,
First off I admit, I had no clue of the particulars of how Paypal worked until yesterday when our Venice apt owners notified me they don't take credit cards and I would need to use Paypal for the deposit.

I crawled out of my cave, got on the Paypal site, created an account, but now I have a question.

It appears I have three choices on how to pay: First - Directly from my checking or savings acct (which I have read on here not to do because of the direct link to your account)

Secondly on my credit card (I have Amex, BofA visa or Cabela's Visa) and Thirdly on my debit card, with a Mastercard logo.

Which way is better in your opinion to avoid additional fees. If I put the apt deposit on a credit card (namely BofA visa) will I incur the 3% foreign transaction fee they charge.

Will I also incure this charge if I use my Mastercard debit card, even if it comes directly out of my checking account. Is this a better alternative then linking to my checking acct directly?

I've never used Paypal and I just want to be informed as to which way is best.
Thank you for your input,
Michele

why you post on this forum lol

Hello hanleyster,
I posted here because it is for my trip to Europe and I want to know how to handle the deposit from my country to Europe. I trust the helpful opinions of the people on this board tremendously as I make my plans.

Do you think it would be better to post elsewhere? I've only used the Europe forum. Do a lot of people on this forum use the other forums too?

Just want to get the best help possible.

Thank you, Michele

I prefer to use my airline FF credit card. You don't pay fess sending money, the recipient pays

Seems to me quite reasonable to post on this forum. I would be interested in the answer from someone who pays through Paypal. We receive credit card payments here in France on Paypal, for which I pay 3.9%. So I'd like to know if the payee is also paying for the privilege.

michele:

First, I think it's fine to post here, as someone may know the particulars about foreign transcation fees and Paypal.

Second, we have used Paypal for a long time, and have it hooked to a bank savings account (granted, a small and insignifcant one) and a credit card. I have never had any problems with the bank account connection, if that helps you any.

Third, I have also made payments using my credit card on Paypal, and have also never had any issues. Unfortunately, I'm not sure about the foreign transaction fee. I'm guessing you would not be charged that because that part of the transaction is between you and Paypal, not the Venice people. I would try calling Paypal to ask that question. They do have a customer support number somewhere on their site. I found them to be very helpful.

If it were me, I would use my credit card. It just seems like you would have the most protection that way.

Good luck and enjoy your trip!

Although I don't have an answer for you, I think there's absolutely nothing wrong with you posting your question here. Others who are trying to pay for accommodation in Europe may have the same question.

When we pay for cottages, etc. in Europe, we either do a direct bank transfer into an account the cottage owner gives us, or send an international money order. Hope you get the answer you need.

I have used Paypal many times, both as a payer and a payee. It is linked to both my bank account and a credit card, and there's never been a problem. I have never had to pay a fee for sending money. The fees are paid by the person receiving the money.

You realize, of course, tat PayPal was created by EBay.

I do not usnderstand your asking which way is best and also saying you've been told not to do it a certain way...I've been using it for years and it is linked to my main checking accont which has a routine balance in the five figures..and as someone above said, I've never had a problem.

Hello and thank you for your help. I think I might call Paypal to get the answer to the credit card part of the question.

Am I correct to assume that I am paying Paypal and then Paypal is paying the Venice Apt owner? Then would it be like I am charging something to my credit card in my home country, not a foreign county where I would incur the foreign transaction fee?

Dukey, I just read a recent post on this forum from someone who had a problem with an Amsterdam deposit and it was stated in the replies not to link to a checking account. (Their personal opinion of course).
I don't know, if you've never had a problem then it is probably safe to do. I don't use Ebay either...I know, I know...the horror!

I do have the money saved for the deposits, so it would be best for it to come right out of my checking acct. I wouldn't want the security of my account compromised though, that's what concerns me. I guess I am just a bit wary of something new, that I am not familiar with, but obviously a million other people use every day.

Thank you again for your helpful answers,
Michele

My Paypal account is linked to my credit card that gives me frequent flyer miles. Haven't used it a lot but never had a problem. I give as few people as possible my checking account information.

Hi Michele

I absolutely SHOULD know the answer to your questions, but alas, I am feeling groggy today.

I can tell you that as an Ebay seller and constant Paypal user, I have had my Paypal account linked to my primary checking and major credit card for years. No problems.

I always have a balance in Paypal account from Ebay sales, so I just payed for an apartment deposit in France out of my balance.

If you use your debit card, won't it link to one of your banking accounts?

I've used my Paypal account many times to pay for purchases from Europe. I get billed in $US, not in euros. And, since I'm Canadian, CC would charge me whatever th exchange rate is for $US. There have never been any additional charges. Paypal does charge the seller, but could also build in any additional charges into the euro/US$ conversion rate.

So..as far as my CC is concerned, I'm making US$ pruchases.

I've used Paypal to pay for things in other countries. I have the account tied to a checking account, and also a credit card. I have never encountered any fees. As someone else stated, the fees will be paid by the receiving party. (I'm sure they have factored these fees into the cost of your apt.) In this case, I would use a credit card to pay. I believe it gives you a bit more protection, and depending on what type of card you use, you may get airmiles or "points" of some sort to be used later for travel or hotels, etc. With Paypal, you can also have money drafted from your checking account and deposited into your Paypal account. Then you can pay from your Paypal account. I think this may take a few days. The recipient does not have access to any of your accounts.

Hello,
So if I understand correctly, when you pay with a credit card through Paypal and then receive your credit card statement there is not an additional charge (usually the next line) that is the 'Foreign Transaction Fee'?
Michele

Correct

But, like I said, no fee does not mean no cost:)

I made a purchase from someone in Sweden through eBay using PayPal and there was a foreign transaction fee charged. I cannot at the moment remember how much it was.

My PayPal account is linked to my MasterCard.

I believe that Ebay "bought" Pay Pal from the guy who "invented" it. Not sure what difference it makes that it is an Ebay company.

Paypal says right on it that they charge you a 2.5 pct foreign currency transaction fee when they convert foreign amounts to USD (if you are a US user). I would believe them. You shouldn't have another charge from your own CC or debit card, though.

That may be your best deal, however and it seems like you have no choice. But you are always going to be paying that 2.5% to Paypal whatever method you choose on Paypal.

We set up a separate checking (or savings) account to be used for Paypal only. We keep only the amounts of money we need for Paypal transactions. After your travels, if you don't need it, then cancel it out.

Thank you all for your helpful replies.

Christina, you're right, I think I don't have any other choice. I missed that info about the 2.5% charge on the site. I thought I would have to pay a small percentage rate to someone someplace along the way I just couldn't figure out who or where!

Thank you again everybody,
Fodorites are the very best source of information hands down!
Michele

You might want to try the Fodorite Approved debit card tack.

Open a checking account that has a reasonable foreign transaction fee on its debit card.

Load the account with the amount of the rent plus some overhead for fees.

Send a debit card for the account to the landlord. I would use a Priority Mail International Flat Rate envelope for $11.95. Email or fax or phone the PIN.

At an ATM, the landlord will then withdraw Euro in cash from your account.

No transfer fees, no mess, no making PayPal richer.

Michele-- you posted a great question very appropriate for this forum. Overseas rentals have become a popular way to beat the Euro's painful exchange.

Hello Viajero2,
Yes the apartment route is allowing us to have an even longer stay in Europe...plus I just can't bear to eat out every single day...too much.

Robespierre,
I think that is a very interesting way to handle the deposit situation. I might ask the apt owner if she would like me to do that.

Off topic for a minute...the Auto Europe program you recommended last year has been tremendously helpful this past year while I continue to plan our 3-month excursion around Europe. I used to be, what my kids would call, geographically challenged, but not anymore. That program is great. It has allowed me to plan on carrying just the minimum amount of maps for our time in Europe, because the detail and routing capability on the Auto Europe is excellent.

Anytime someone on this site mentions somewhere interesting I just pop it into Auto Europe and instantly I know if it will fit into our plans as well as how long it takes to get to and from there, routes to take etc.

Thank you again for an excellent suggestion,
Michele

Michele, my son did have a problem with a PayPal use. He was the buyer. The seller "mistakenly" charged too much to his PayPal account, which was subsequently taken out of his checking. The error was about $400 or more. Luckily he had enough in his checking account to cover the over-charge or he would have had bank fees.

Eventually he got his money back from the seller, but PayPal was not any help. They told him to call the seller & get it taken care of.

So, if I was going to use PayPal for a foreign apartment charge, I would do what another mentioned - open a new, no fees, checking account with just enough to cover what you need. Much safer than having someone play with your 'serious' checking account!

Julie

Paypal does not charge the person paying a fee. I've used Paypal for years and never had a problem. The seller pays the fees. With that said, the apt. owner may well want you to cover that fee, which is reasonable if you want the security of not sending cash.

You can easily link the payment from your checking acct. Make the payment, then change your preferences after the payment clears to not include your bank account.

Something I like about PP is that you can set up currency in the local (as in euros). You will get a very good rate, usually the same as XE shows.

Julie, it would be interesting to hear more about how that happened, because in my experience, the buyer tells PayPal how much to send, rather than the seller telling PayPal how much to "take".

And just why do apartment owners use PayPal when it would be so much easier to handle their own Visa or Mastercard, etc?? Are they charged a huge fee in comparison to Paypal?

Just curious........

Getting the ability to accept credit card payments can be a real hassle. For a small business, the costs can be very high. Paypal costs nothing to set up and takes very little time. I used it primarily when I was teaching English online to accept payments from all over the world. Students paid in their own currency, it was instantly transferred to my acct in dollars.

michele, I am not an expert; but it is my understanding that if the renter does not take Credit Card payments, you may not pay via Credit Card through PayPal. Even through Pay Pal, it is still a Credit Card payment. Perhaps someone here knows if this is still correct.

Daveesl......thanks for the explanation.

dmlove, it was an internet purchase. So, as I understand it, one goes to the seller's website, puts in an order with the PP acct. info, the seller charges the PP account, & hopefully ships the item purchased.

Whatever the procedure, his account was deducted with much more. He called PP; said call seller to correct the transaction. He called seller who corrected. He eventually got his money back. Good thing his money is not 'tight'; luckily he could afford to wait & the money 'mistake' did not cause insufficient funds.

What I didn't like was what if the seller would not have cooperated, as in unscrupulous? So, I don't use PP. But then, I can get cheated with credit cards too!

When I'm dealing with arrangements for Europe, I just don't choose the places that cause money concerns. I've run into that with several apartments, & I just pass them by. Have always been able to find one that will deal with me in an easy manner, & have been happy with my choices. I figure there are too many places, so why deal with such hassles and/or possible hassles.

Julie