Paypal - Cash Advance or Purchase?

spinn3r

Hello everyone,

I have searched all over the web but I have not found a definitive answer.

I have also contacted Barclaycard and Paypal several times and I was unable to get a definitive answer either. I even got one Barclaycard representative on the telephone mumbling about balance transfers (which I did not ask for!), are the call centers even in the UK?

Is a Paypal payment for goods/services to a private citizen (I'm thinking about buying a used car) using a Barclaycard credit card considered a purchase (attracting a much better 0% interest rate for my first 20 months with Barclaycard) or a cash advance?


Many thanks in advance.

grumbler

I recall people saying it's a purchase, but you can never be sure.
Try making a small payment first to check?

spinn3r

That was an idea I had yesterday but thank you nonetheless

It just showed up on my Barclaycard online as:

Paypal NameOfThePerson
1.00 POUND STERLING LUXEMBOURG
Retailer name: Paypal *********
Retailer number: *******
Business type: Services, Not Elsewhere C
Town: ************
Country: Luxembourg
PIN Used: No
Cardholder: ****
Forex amount: 1.00 Pound Sterling
Exchange rate: 1.00

Does it mean that the payment was considered a purchase?

derps

My PayPal transactions have always showed up as retail purchases, not cash advances. I think PayPal's silly workaround to various laws is that you buy nonsense "e-money" credits from them which they transfer to the retailer who then cashes them out into real money from PayPal, this way they aren't transferring money but selling an intangible "product" to you. I think I read that once anyway, ha ha.

The information you've posted isn't enough for me to figure out if it's a retail transaction as far as Barclaycard are concerned but now that the transaction is on the system there's no way their customer service guys won't be able to tell what it is if you ask them - although I'd bet that it's not a cash advance since that's how it's always showed up for me.

demonted

I phoned Barclaycard roughly 3 years ago asking the very same question; I was planing to purchase a car, in region of £3k via ebay.!

I was assured by Barclaycard that when paid through Paypal it is regarded as a Card Purchase and not a Cash Advance.

Although, due to my balance at the time I would have incurred interest (Card Purchase rate) from day one.!

However, if I had Credit Card with a 12 or 18 month or longer 0% Interest Rate, then I would not incur interest for the duration of the 0% offer.

Remember, you still must pay the minimum payment; on a Barclaycard; that's 2.25% of the outstanding balance, which depending on total purchase price, although interest free, it maybe too expensive.

With a 0% interest period, I believe it's best to divide the purchase cost/balance by the duration of the interest free period and pay that as a fixed monthly payment until balance is cleared.

I would assume additional card spending/card transactions will require the fix monthly fee increasing to ensure the balance is cleared before the interest free period comes to an end.

An online Credit Card Interest Calculator; states that paying the minimum payment of 2.25% on a interest free balance of £3000 will take 13 years to clear; although the interest free person won't last that long.

When I called Barclaycard, I believe they mentioned that protection of Section 75 of Consumer Credit Act is lost when payment is made through Paypal.

Section 75 only relates to retailers who accept credit card payments which are processed through a Merchant Account,!

I guess with the onset of Paypal offereing Mobile Card Processing Terminals to retailers, maybe the unwary could be caught out by this?

However, I would assume Section 75 protection will resume if purchased from a Trader/Business and a deposit is paid direct to the seller before making any payment through Paypal.

Although, the deposit must be charged to the Barclaycard !and processed via a Merchant Account.

Just throwing this out there, it may be of use or maybe forum members can provide their understanding or experience of it.

In regard to ebay; I bought auction items from private sellers, paid via PayPal but charged to my Barclaycard and I've never been charged the cash advance interest rate, always stated 17.9%

demonted

Sorry I've gone off topic in regard to Sect 75 and Paypal; just believe it's an important point to consider, especially when purchasing a car via a credit card....

However, I found this on the WHICH website:

Payments through Paypal!

If you use your credit card to pay for something through PayPal and the funds go direct to the seller, then as long as the company you're buying from has a 'Commercial Entity Agreement' with Paypal you may still be able to claim against your credit card company under Section 75 for any misrepresentation or breach of contract. There are arguments that having another party involved in the process takes away the Section 75 protection.!

PayPal offers its own buyer protection scheme, called PayPal Buyer Protection, so it's worth checking if you'd be covered by that if you have a problem with your purchase. If you particularly want to have the protection of Section 75 then look to pay the trader direct with your card.!


Source:
http://www.which.co.uk/consumer-rights/regulation/section-75-of-the-consumer-credit-act

grumbler

demonted wrote: »

I phoned Barclaycard roughly 3 years ago asking the very same question; I was planing to purchase a car, in region of £3k via ebay.!

I was assured by Barclaycard that when paid through Paypal it is regarded as a Card Purchase and not a Cash Advance....

In regard to ebay; I bought auction items from private sellers, paid via PayPal but charged to my Barclaycard and I've never been charged the cash advance interest rate, always stated 17.9%

The OP was going to send money by PP "to a private citizen", that generally isn't the same as to pay by a CC via PP.

demonted wrote: »

Sorry I've gone off topic in regard to Sect 75 and Paypal; just believe it's an important point to consider, especially when purchasing a car via a credit card....

However, I found this on the WHICH website:

Payments through Paypal!

If you use your credit card to pay for something through PayPal and the funds go direct to the seller, then as long as the company you're buying from has a 'Commercial Entity Agreement' with Paypal you may still be able to claim against your credit card company under Section 75 for any misrepresentation or breach of contract. There are arguments that having another party involved in the process takes away the Section 75 protection.!

PayPal offers its own buyer protection scheme, called PayPal Buyer Protection, so it's worth checking if you'd be covered by that if you have a problem with your purchase. If you particularly want to have the protection of Section 75 then look to pay the trader direct with your card.!


Source:
http://www.which.co.uk/consumer-rights/regulation/section-75-of-the-consumer-credit-act

There is a MSE article on this topic and a long discussion thread:
Warning! Don't use paypal to pay on a credit card

demonted

So, the OP is not planning to buy a car from a private seller via ebay or through a dealer that accepts Paypal payments but wishes to buy a car and pay using their credit card but send the payment through Paypal as gift ?

grumbler

The OP said nothing about ebay.
My understanding is he is just buying a car privately and wants to get cash at 0% from his CC.

glentoran99

spinn3r wrote: »

Hello everyone,

I have searched all over the web but I have not found a definitive answer.

I have also contacted Barclaycard and Paypal several times and I was unable to get a definitive answer either. I even got one Barclaycard representative on the telephone mumbling about balance transfers (which I did not ask for!), are the call centers even in the UK?

Is a Paypal payment for goods/services to a private citizen (I'm thinking about buying a used car) using a Barclaycard credit card considered a purchase (attracting a much better 0% interest rate for my first 20 months with Barclaycard) or a cash advance?


Many thanks in advance.

it depends how you send it, if sent as a gift it can be viewed as a cash advance, and if its a purchase there will be fees attached which either you or the receiver must pay

demonted

It looks like I've mis understood; I guess I just assume ebay due to my own circumstances..... hope my post helps someone.

If I do finally understand the originally question; personally, I wouldn't buy a car via a Credit Card using a Paypal Gift Transction; the risks of fraud outweigh the savings.

Othe than a gift payment, I'm unaware of any other type of Paypal transaction which will accommodate a purchase in such a manner.

I have no idea how Barclaycard process a Gift Transaction; as others have said, I assume it would be regarded as a Cash Advance, otherwise everyone with a Credit Card could be sending Paypal Gift Transaction to partners or relatives charged to a Credit Card and not incurring the Cash Advance interest rate or incurring no interest at all if within a 0% offer.