Advice: Split your Paypal Withdrawals

Yes, but the reasons I don't do this are:
1. When I pay with paypal I use a cash back credit card, not my paypal balance.
2. The interest rate on money left in paypal is 0%. It is better to move it to an interest bearing account where possible.

I have heard of this account and I am thinking of this also. Does this mean have 2 accounts at DIFFERENT banks or at the same bank. ( checking and savings account ) Right now I get the Paypal withdrawal in my checking account (linked to Paypal) and then transfer to 'Savings account' at the same bank.

Yes this is exactly what i do...i have two accounts, my business checking and my "Merchant" account...all paypal withdrawls go into my merchant account, and i immediately transfer the money into my checking account via online banking once the payment clears...

That way paypal has no access to my other bank account and can't try to take money from it...haven't had any problems yet with the system.

I also always try to leave at least $100 in my account incase i have to issue a refund.

What you've posted here is a reasonable tip, but it's one of the many PayPal "myths" circulating here and there.

The strategy you've employed here is a "win the battle, lose the war" tactic. Why?

According to PayPal's Terms of Service, PayPal has the "right" to take the money back out of your bank account.

Your retort? "Fine, I've moved the money to the other account, PayPal can't touch it."

Yes and no. PayPal employs a tactic which is known as "hammering" an account. If PayPal is trying to take back the $50 that you withdrew from your account because there's an issue with your PayPal account (dispute, negative balance, whatever), PayPal will keep on trying to withdraw the funds from your account -- multiple times per day.

That means everytime PayPal doesn't get their money, you get hit with hefty bank NSF fees -- my bank charges $25 per. While you're hiding your money in the "other" account, PayPal is sending withdrawal requests (like presenting a digital check for payment) to your account.

This can lead to your PayPal account getting suspended/limited. Why? If there's a dispute, and there's no money in your account, a negative balance in your account automatically triggers

a) PayPal attempting to recoup the money from your bank account

b) account limitation -- according to the PayPal Terms of Service under "Prohibited activities" merely having a negative balance in your account is enough to shut you down.

If you've got a Premier or Personal account, you also gave PayPal permission to access your personal credit file (Experian/Equifax/Trans Union). If you've got any kinds of issues with your credit file, PayPal can limit your account based upon your credit file. The whole situation mentioned above could trigger this process as well. Now you've got two things to worry about when it comes to keeping your PayPal account.

Soon, you're inundated with requests from PayPal to "verify" this and "verify" that. Utility bill. Driver's license. SSN (if they don't already have it). Business license. Suppliers. The other myth is that if you actually provide all this stuff, you're guaranteed to get your account back.

Also not true: read PayPal's email announcing notice of limitation; they write after submitting the information your account status will be "reviewed" -- not "fixed".

In many cases providing all this information doesn't help because this is one of PayPal's tactics to prepare you for the "big sleep": namely, getting as much personal information from you in order to catch you later should you try to open another account because your present account is shut down.

It always HELPS to submit this information to PayPal and then contact their office of executive escalations to make sure a real person who has authority to toggle the system can make sure that if you're legit, your account access will be reinstated.

The bottom line: always leave a little in your PayPal account to cover the unexpected and avoid this stuff.

Lastly, it's sad that your money really isn't your money in the sense that people have to tip toe around PayPal wondering when/if it's okay to take out their own money!

Just had a big discussion about this over here
http://www.warriorforum.com/main-int...-you-do-4.html

Read the first quote below from that thread. Several other people in the thread said it happened to them also.

Originally Posted by MikeFriedman This is absolutely not true. I worked for one of the largest banks in the United States for over 8 years. They can and will reverse the deposit whether money is in your account or not. If there is no money, it will just overdraw your account and leave you with a negative balance, which if you do not rectify in a given amount of time, the bank will charge off the account and send it to collections. If you moved the money into an account at the same bank, they will simply grab the funds from that account to bring your account to a zero balance. It is no different than if you deposited a fraudulent check into your account. A lot of people think that if it "clears" in a few days they are safe. If it is reported as fraud, even 6 weeks later, the check will be charged back to your account. That is how so many of these lottery scams work.

A good option is also to be rolling with 2 different payment processors. Occasionally something might cause your account to be temporarily disabled or blocked and it is always a good idea to have a back up in place. (even if you don't use both regularly.)

Cheers!
ChriZ

I am one person that has never had a serious issue with paypal. I am friends with a few engineers that work there, and I'd be giving them a really hard time if something unseemly happened. But I really have had no issues over almost a decade now. I change my password regularly, etc. No issues.

PayPal won't TAKE your money, they just restrict access to it for a period of time. You'll eventually get it.

But remember also that the vast majority of people never have a problem with PayPal.

I always leave more than $100. But I've never tried the withdrawals split. Thank god I didn't have much problem with PayPal.

You would probably be surprised at what banks (including PayPal) can and will do when it comes to getting their funds.

A friend had a business that was failing miserably due to the crash of the housing market (his business was a service provider to new residential construction). Unfortunately he had to declare corporate business bankruptcy. He had a vehicle loan, credit card and bank account with same bank. As he was working through the process he received a large payment and deposited it into his bank account. The bank immediately withdrew the entire deposit and applied the money toward his outstanding credit card balance. It was all in the small print. Nothing would shock me from banks or PayPal anymore.