Payment in Euros - Better to use Bank Account or Credit Card through Paypal?

edited 30 November -1 at 1:00AM in Ebay, Auctions, Car Boot & Jumble Sales
16 replies 5.4K views
katiesamkatiesam Forumite
186 Posts
Hi all,

I've wondered this for a while but haven't been able to find an answer so I'm hoping someone here will be able to help or guide me in the right direction.

If I win an auction where the currency being used is Euros (or dollars for that matter), and I pay through PayPal, which is the best option to use - have the payment come directly from my bank account (where PayPal shows me the exchange rate to be used), or have the payment come from my credit card, where the rate isn't shown?

Do the credit card companies generally have a better rate than the bank?

And how do fees affect the price?

Sorry if this is a silly question - I've tried googling for an answer on multiple occasions but never been able to find anything.
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Replies

  • katiesamkatiesam Forumite
    186 Posts
    Anyone able to help?
  • KxMxKxMx Forumite
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    The exchange rate is Paypals- not your bank or credit card provider. Those are your funding sources but the payment provider is PayPal and their rate is used.

    I do $ payments regularly which come up as funded by bank account by default and usually switch to CC- the amount in £ doesn't change.
  • katiesamkatiesam Forumite
    186 Posts
    KxMx wrote: »
    The exchange rate is Paypals- not your bank or credit card provider. Those are your funding sources but the payment provider is PayPal and their rate is used.

    I do $ payments regularly which come up as funded by bank account by default and usually switch to CC- the amount in £ doesn't change.

    Thanks for your reply. So basically the amount charged in £ will be the same regardless of whether I tell PayPal to use my bank account or credit card?

    So then I guess it's just a question of fees then and whether my bank or my credit card charges for foreign transactions - have I got that right?
  • edited 2 July 2015 at 9:23PM
    KxMxKxMx Forumite
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    edited 2 July 2015 at 9:23PM
    The nuts and bolts are quite complex, but what you need to know is it's PayPal as the payment provider who determine the fees, not the funding source provider.

    PayPal converts the euros or dollars into pounds using their own rates, and the resulting £ amount is charged to your CC or bank.

    Say I win an auction for $20, and want to use my credit card.

    I pay with PayPal with my credit card as the funding source.

    PayPal tell me it will be £13.49 and I confirm.

    A couple of days later on my CC there is a £13.49 PayPal*insert sellernamehere* transaction on my statement.
  • GabbaGabbaHeyGabbaGabbaHey Forumite
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    That's NOT how it works for me!

    When I am highest bidder in an auction in a foreign currency, I get a choice between paying for the item in UK£, at PayPal's rate (which is shown on the screen) OR paying in the foreign currency on my credit card.

    In every case, it has been cheaper for me to pay in the foreign currency on my credit card (even when I include the foreign currency transaction fee) than it would have been to pay PayPal's amount.

    My credit card is issued by RBS - obviously the amount that your credit card issuer charges for foreign currency transaction may vary.
    Philip
  • soolinsoolin Forumite, Board Guide
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    That's NOT how it works for me!

    When I am highest bidder in an auction in a foreign currency, I get a choice between paying for the item in UK£, at PayPal's rate (which is shown on the screen) OR paying in the foreign currency on my credit card.

    In every case, it has been cheaper for me to pay in the foreign currency on my credit card (even when I include the foreign currency transaction fee) than it would have been to pay PayPal's amount.

    My credit card is issued by RBS - obviously the amount that your credit card issuer charges for foreign currency transaction may vary.

    It depends which site you buy from. If you buy from a non UK site then you ar elikely to get the choice, if you buy logged into ebay UK then you shouldn't be getting a choice.

    I buy dozens of items a month from sellers all over the world, but always on ebay.uk and paypal automatically convert for me.
    I'm the Board Guide for the Ebay Board , Charities Board , Dosh & Disability , Up Your Income and the Local MoneySaving-England board which means I volunteer to help get your forum questions answered and keep the forum running smoothly. However, do remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to [email protected] (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com
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  • bxboardsbxboards Forumite
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    soolin wrote: »
    It depends which site you buy from. If you buy from a non UK site then you ar elikely to get the choice, if you buy logged into ebay UK then you shouldn't be getting a choice.

    Not for me, I only use Ebay.co.uk and if I buy something in euros or USD I always get the option of allowing Paypal to do the conversion and I am bill in UK pounds, or I can process the transation in the original currancy and let me card provider do the conversion.

    That is how is is supposed to work.

    It is almost always better to pay in the native currency as Paypal's conversion rates are generally 2.5%
  • soolinsoolin Forumite, Board Guide
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    bxboards wrote: »
    Not for me, I only use Ebay.co.uk and if I buy something in euros or USD I always get the option of allowing Paypal to do the conversion and I am bill in UK pounds, or I can process the transation in the original currancy and let me card provider do the conversion.

    That is how is is supposed to work.

    It is almost always better to pay in the native currency as Paypal's conversion rates are generally 2.5%

    I've never had the choice, it looks like this is another of the differences between accounts, for me it just shows $x = £ x and bills me in pounds. Quite often I am getting a very fair rate , certainly better than paying the transaction fee that my bank charges if I buy in a foreign currency.

    It's odd how it is different for all of us.
    I'm the Board Guide for the Ebay Board , Charities Board , Dosh & Disability , Up Your Income and the Local MoneySaving-England board which means I volunteer to help get your forum questions answered and keep the forum running smoothly. However, do remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to [email protected] (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com
    New to Forum? Guide
  • glentoran99glentoran99 Forumite
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    does it depend on how you are funding the transaction? If credit card you will have the option but if its from your bank it will be converted for you as its a direct debit?
  • bxboardsbxboards Forumite
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    It's odd how it is different for all of us.

    I think you probably have got this set up to always use Paypal conversion rate somewhere in your Paypal account. I don't think this is anything to do with Ebay account differences.

    A credit card with good conversion rates ie Santanter Zero, Halifax Clarity will always beat Paypal's loaded rates.
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