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Sending money using paypal and your credit card treated as cash advance ?

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Shooting-For-800
Senior Contributor

Re: Sending money using paypal and your credit card treated as cash advance ?

You are going to get a fee either way.

Pay the contractor what you owe + 3% for goods and services.

You may save 1% by using friends and family but you would have 0 recourse.

Goods and services gives you some recourse.

I have not had any issues with credit cards considering a cash advance.

GL!

Rebuild started in 2014  -  $100k unsecured credit in 2017  -  $500k unsecured credit in 2024.

DON'T WORK FOR CREDIT CARDS ... MAKE CREDIT CARDS WORK FOR YOU!



Message 21 of 31
longtimelurker
Epic Contributor

Re: Sending money using paypal and your credit card treated as cash advance ?


@Anonymous wrote:

@Superduper2014 Why wouldn't you "absorb" the PayPal fee they don't want to pay, by paying more?

 

$5k job + $75 fee (1.5%?) = $5075.
PayPal them $5,075. Fee covered. 

maybe I'm missing something


Well, missing some math maybe!

 

If there is a 1.5% fee, when you send them $5075, they will get charged a $76.13 fee so you will be a little short!   The required amount if the fee is 1.5%  is 5000 *100/98.5 =$5076.15

Message 22 of 31
Anonymous
Not applicable

Re: Sending money using paypal and your credit card treated as cash advance ?


@Superduper2014 wrote:

Hello Guys, 

 

I am doing some renovations and some contractors would take paypal for example, but they don't want to pay the fee and suggest to send as friend payment and I can absorb the fee by paying with the credit card. 


 

I would never do this, If you had any issues that needed addressed you then have no recourse at all! At least if you pay for services by a check, oreven a CC there's proof they accepted payment for the work. So they can't come back on you for not paying, nor can they say it didn't happen if you find problems with the work. You need to watch a few more episodes if Judge Judy. lol

 

 

Message 23 of 31
Credit12Fico
Established Contributor

Re: Sending money using paypal and your credit card treated as cash advance ?

@Superduper2014 Just remembered something that will help massively here. Paypal is offering fee-free goods and services payments to businesses who accept payment through the the new contactless QR code system they rolled out.  Fees are waived through December due to Covid.

 

Send this link to your contractor: https://www.paypal.com/us/brc/article/how-to-install-a-qr-code#:~:text=*After%20December%2031%2C%202... 

 

Tell them to generate a QR code and to send you the QR code (either in person, snail mail, or via email). You should then scan the QR code with a mobile device that has the paypal app. Then send him the $5000.  You get the protection of "Goods and Services" and your contractor doesn't have to pay any seller fees through December.

 

If you are still working with them in January, fees will rise to 1.9% for the QR codes (better than the 3% if done without QR code). If you are so kind, you can charge a 2% credit card, and just send the credit card rewards to the contractor instead of keeping them for yourself (So basically, just overpay the contractor by roughly 2% and it all works out at no cost to anyone except Paypal and the banks Smiley Happy.

 

 

Message 24 of 31
K-in-Boston
Credit Mentor

Re: Sending money using paypal and your credit card treated as cash advance ?


@longtimelurker wrote:

@Anonymous wrote:

@Superduper2014 Why wouldn't you "absorb" the PayPal fee they don't want to pay, by paying more?

 

$5k job + $75 fee (1.5%?) = $5075.
PayPal them $5,075. Fee covered. 

maybe I'm missing something


Well, missing some math maybe!

 

If there is a 1.5% fee, when you send them $5075, they will get charged a $76.13 fee so you will be a little short!   The required amount if the fee is 1.5%  is 5000 *100/98.5 =$5076.15


😯 I wish PayPal fees were only 1.5%.  PayPal fees for either payments received or "send money to friends and family" (whether sender or recipient are paying) are 2.9% plus $0.30 for transactions in USD.  From previous math debates, I am comfortable with your arithmetic ability and I am feeling lazy, so I'll leave the new corrected math up to you.

Message 25 of 31
Anonymous
Not applicable

Re: Sending money using paypal and your credit card treated as cash advance ?


@K-in-Boston wrote:

@longtimelurker wrote:

@Anonymous wrote:

@Superduper2014 Why wouldn't you "absorb" the PayPal fee they don't want to pay, by paying more?

 

$5k job + $75 fee (1.5%?) = $5075.
PayPal them $5,075. Fee covered. 

maybe I'm missing something


Well, missing some math maybe!

 

If there is a 1.5% fee, when you send them $5075, they will get charged a $76.13 fee so you will be a little short!   The required amount if the fee is 1.5%  is 5000 *100/98.5 =$5076.15


😯 I wish PayPal fees were only 1.5%.  PayPal fees for either payments received or "send money to friends and family" (whether sender or recipient are paying) are 2.9% plus $0.30 for transactions in USD.  From previous math debates, I am comfortable with your arithmetic ability and I am feeling lazy, so I'll leave the new corrected math up to you.


There is actually no fee for friends and family for the sender or receiver unless you fund it with a debit or credit card. That's always been the big advantage with F&F is you can instantly send money from your linked bank account or PayPal balance with no fee. 

Message 26 of 31
K-in-Boston
Credit Mentor

Re: Sending money using paypal and your credit card treated as cash advance ?


@Anonymous wrote:

@K-in-Boston wrote:

@longtimelurker wrote:

@Anonymous wrote:

@Superduper2014 Why wouldn't you "absorb" the PayPal fee they don't want to pay, by paying more?

 

$5k job + $75 fee (1.5%?) = $5075.
PayPal them $5,075. Fee covered. 

maybe I'm missing something


Well, missing some math maybe!

 

If there is a 1.5% fee, when you send them $5075, they will get charged a $76.13 fee so you will be a little short!   The required amount if the fee is 1.5%  is 5000 *100/98.5 =$5076.15


😯 I wish PayPal fees were only 1.5%.  PayPal fees for either payments received or "send money to friends and family" (whether sender or recipient are paying) are 2.9% plus $0.30 for transactions in USD.  From previous math debates, I am comfortable with your arithmetic ability and I am feeling lazy, so I'll leave the new corrected math up to you.


There is actually no fee for friends and family for the sender or receiver unless you fund it with a debit or credit card. That's always been the big advantage with F&F is you can instantly send money from your linked bank account or PayPal balance with no fee. 


Yes, no fees sending from PayPal balance or bank account, but I didn't mention it since OP was asking about using a credit card to pay the contractor.

Message 27 of 31
Superduper2014
Frequent Contributor

Re: Sending money using paypal and your credit card treated as cash advance ?

UPDATE: Just checked my statement with US bank and they classified a payment made with the card through paypal as friend, as a purchase, not as cash advance. Not sure about other cards at this moment. 

 

I have a question about how US bank reports.

 

If they closed the statement yesterday (generated one) and they will be reporting this by the end of the month, will they report what is on yestarday's statement? OR what if I paid it off completely today, will they report the zero balance or what closed yesterday?

 

Additionaly, if I was to charge more to that card before they report, will they report the increased balance on the 31st or just the balance that closed yesterday?

 

Thanks again!!!

Message 28 of 31
longtimelurker
Epic Contributor

Re: Sending money using paypal and your credit card treated as cash advance ?


@Superduper2014 wrote:

UPDATE: Just checked my statement with US bank and they classified a payment made with the card through paypal as friend, as a purchase, not as cash advance. Not sure about other cards at this moment. 

 

I have a question about how US bank reports.

 

If they closed the statement yesterday (generated one) and they will be reporting this by the end of the month, will they report what is on yestarday's statement? OR what if I paid it off completely today, will they report the zero balance or what closed yesterday?

 

Additionaly, if I was to charge more to that card before they report, will they report the increased balance on the 31st or just the balance that closed yesterday?

 

Thanks again!!!


They report the balance that exists at the time of reporting, so the balance on yesterday's statement doesn't impact that, unless you do no charges or payments until the end of the month

Message 29 of 31
K-in-Boston
Credit Mentor

Re: Sending money using paypal and your credit card treated as cash advance ?

US Bank always reports whatever your balance is on the last day of the month, never the statement balance.

Message 30 of 31
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