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Re: protecting oneself from paypal - Printable Version

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Re: protecting oneself from paypal - Jeff O. - 02-21-2007

The one time I had a problem with a seller not delivering after I paid with paypal, I first tried to get the bank to reverse the credit card charge. They refused, with some sort of lame excuse to the effect that they could not reverse the charge since I had authorized it. I did not read the fine print of the cardholder "agreement", but my guess is that different banks offer different levels of service for refunds in cases where you did indeed authorize the charge but are dissatisfied with the purchase. (Miraculously, the seller had not cleaned out his account, so we used paypal's dispute resolution process to get the money back - less paypal's $25 fee, of course.)

Regarding protection with debit cards vs. credit cards, this FTC page gives the basics. Debit cards do offer less protection against unauthorized charges. I believe that some banks voluntarily offer the same protections, but it is not required. Which brings me to another question (caution - curmudgeon alert): just exactly what is the advantage of using a debit card? If the money comes directly out of your checking account as you use it, then one must obviously have the money in the account to pay the charges. So why not just charge everything to a credit card and pay the bill in full every month from that same checking account? That way you will get the credit card protections. (For those that might be inclined to build up a huge balance on their credit card rather than pay it off, I suppose that the debit card forces some financial discipline.) Debit cards seem to me to just be a way to essentially give money to the banks and credit card issuers for them to allow you to use your money, with zero risk to them. (Don’t get me started on how the price of virtually everything is inflated by 3% or more to account for the credit card holdback fees and that anyplace that accepts credit cards should be required to give a discount if you pay in cash or cash equivalent.)

ot: debit cards - bill platt - 02-21-2007

I never use the debit card feature. In fact when they started that nonsense, I started getting annoyed that I now had to answer the question, "debit or credit?" It's a freakin' credit card fercrissake!

I put the debit card in the same category with check cashing establishments. Only people with zero credit and often zero sense will flock to them.

As far as the % charged for credit card transactions, I agree that it is obnoxious that the Credit Card Companies manage to bully their patrons into a one price structure. Interestingly it used to be that gasoline stations got away with a two-tier structure, and I offer a rebate for money orders on Ebay--even though it is a "violation" of their rules (read: monopoly practices on financing--therefore ebay is *not* an auction site but rather a 21st century sharkfest.)

Paypal plus Ebay charges chews up some serious margin.

Re: ot: debit cards - Bill (Smithville, NJ) - 02-21-2007

Hi Bill,

It's a freakin' credit card fercrissake!

Welllllll - maybe not. It all depends.

I think we're talking two different types of cards here (or maybe it's three or four types).

First, there is the standard credit card - visa, mastercard, Amex, etc.

Second there is the Debit Card (or in my Area MAC). This is the old card that was tied directly to your bank accounts and for many years was only usable at a bank machine.

Third is the combination Debit card. This one can come in two flavors:

Flavor One - It's still a standard debit card but can be processed through two different transaction methods. Method one is to use it as a standard debit card where the money is withdrawn directly from from the bank account and a PIN number is used. Method two is still a debit transaction, but the transaction takes place through the Credit Card Company. Only a signature is require. But the money is still taken directly from your checking account. The key difference is that the merchant is charged very different transaction fees. The Debit version is charged a per transaction cost while the credit debit is charge a varying percentage of the transaction.

Flavor Two - It's both a standard debit card and a credit card. In this case when debit is used, the money comes directly from the bank account and when credit is used, it is charged as regular credit card trasaction and appears on the credit card statement which you then pay.

I put the debit card in the same category with check cashing establishments. Only people with zero credit and often zero sense will flock to them.

Well I use a debit card where ever I might be paying by cash anyway and I definetly don't have zero credit or (I hope) zero sense. :)


Re: ot: debit cards - bill platt - 02-22-2007

When Mellon first came out with the debit idea, I read the fine print, and I declined it. I used my MAC card until they expired it, then I gave it up. The fine print turned the MAC card into a non-secure credit-card-access-directly to your bank account. I didn't want to have any part of that nonsense.