Jobs, Career and Money

There are no safeguards for your money in a PayPal account, and they will freeze your account at a moment’s notice. This is why you should never leave a balance in PayPal. For the last 3 years, the minute I get paid for something I withdraw it into my bank account then, when it clears there, withdraw it into another bank account - and I’ll tell you why I do that in a minute.

There are many reasons why you should never keep money in your PayPal account, but here are just a few of them.

1. You’re not earning interest. First of all, the common sense reason, when you keep your money in PayPal you are not earning interest. If you have only a small balance, this may not seem to be worth worrying about. However, even with small balances, your yearly interest could be $50 or more. It’s not much, but it’s two or three dinners out for you and a friend.

2. PayPal can freeze your account. PayPal can freeze your account whenever they want to. If you have a buyer that buys something from you, then lies and says he didn’t receive it, PayPal will immediately freeze your account while they ‘investigate’. I had this happen to me once.

For an $8 t shirt that the customer did receive (I had tracking information, but he lied and said he didn’t receive it), PayPal froze my account with more than $400 in it. It took them almost a month to ‘investigate’ then they sided with the scam artist who cheated me, even though I had proof.

I checked his feedback on EBay and he had done the same thing with several other sellers. PayPal did nothing. Now, I withdraw any money in my PayPal account the minute it is put in there.

3. Suspicious activity. If PayPal suddenly decides there is ’suspicious activity’ on your account, they can freeze your funds. A friend of mine had her account frozen when she made several withdrawals on her PayPal debit card in Asia. Regardless that she had been doing this for over two years, PayPal froze her account. It took them two weeks to unfreeze it. She immediately closed her account with PayPal and will never use them again.

4. Illegal activity. PayPal’s security is just not very good. It’s very easy for somebody to get your password if you click on a scam e-mail and enter your PayPal password. Then they can hack into your PayPal account and empty it out. If it’s linked to your bank account and your bank account has money in it, they can empty that out too.

This is why my PayPal account is linked to a bank account that has no money in it and no possibility of getting an overdraft. As it stands at the moment, if somebody hacked into my PayPal account, they’d end up with the grand total of about $5.

Also, if you have a linked bank account that has money in it, PayPal can also go into it and withdraw money from it if they decide you ‘owe them’. There are complaints all over the internet of PayPal illegally withdrawing money from people’s bank accounts. Several law suits have ensued because of it.

So, if you have money in PayPal and especially if you sell online, make sure you do not keep money in your PayPal account. Empty it out every day and empty it into a bank account that is linked to another bank account, so you can withdraw it out of PayPal’s way. Also, don’t open a PayPal money market account - money in it is not FDIC insured so, if PayPal goes bankrupt, you will lose all your money.

PayPal is an easy way to accept money and to pay for things. But they have set themselves up as judge, jury and executioner with your money. Make sure they can’t get it. Protect yourself.