Payment to builder via PayPal using 0% purchase credit card

Jinglish

Hello,

I have looked at these older threads and they haven’t answered the question I am looking for.

https://forums.moneysavingexpert.com/discussion/5027446/payment-to-builder-via-paypal-classed-as-cash-advance-0-credit-card

https://forums.moneysavingexpert.com/discussion/5980297/paying-builders-via-credit-card/

I already have a 0% credit card on purchases until Jan 2025 and want to use this to pay for building work. I know most builders take cash / bank transfer.

I am thinking of asking convincing my builder if he would take PayPal and I send the money as “Friends and Family” using my 0% card. As far as I can tell there is no fee for me to send and no fee for them to receive or withdraw to their UK bank account. So, I see this as no different from me sending by BACS other than I’m using PayPal and my 0% credit card instead.

https://www.paypal.com/uk/webapps/mpp/paypal-fees

Is my understanding correct? Does anyone have any experience of this?

P.S. I have no interest in consumer protection e.g., chargeback / S75 I only want to use this method for my cash flow management. I also don’t want to do a money transfer.

molerat

It is possible it will be treated as a cash transaction by your card provider with the associated charges and interest.

Jinglish

Hmms thanks. Terms and conditions of credit card say..

‘Cash Transaction’ means any cash loan we make to you obtained by use of the Card or Card number, including;
 c) any payment made by use of a money order, electronic  money transfer, direct debit, standing order or similar 

Not clear to me so might try a small transaction of say £100 and see what happens next statement.

Jinglish

Actually thinking about it, if I don't get charged a 'cash transaction' fee then I can just pay via wife's PayPal then give the builder cash or BACS.

Fingerbobs

molerat said:

It is possible it will be treated as a cash transaction by your card provider with the associated charges and interest.

Not necessarily. It may depend on the card, but I've never had PayPal Friends and Family be treated as a cash transaction by the credit card, and this is something I do regularly. 

molerat

Fingerbobs said:

molerat said:

It is possible it will be treated as a cash transaction by your card provider with the associated charges and interest.

Not necessarily. It may depend on the card, but I've never had PayPal Friends and Family be treated as a cash transaction by the credit card, and this is something I do regularly. 

Which is why I said possible.  There are many reports of F&F transactions being treated as cash, even some on this forum.

https://forums.moneysavingexpert.com/discussion/6445903/paying-via-paypal-friends-and-family-using-a-credit-card-stop

Official line from Tesco CC

https://community.tescobank.com/threads/11329-Using-credit-card-to-pay-someone-with-PayPal-Friends-amp-Family

Jinglish

According to mums net mid last year Tesco are doing so... As otherwise it does allow a free "money transfer".

https://www.mumsnet.com/talk/money-matters/4779898-new-message-about-credit-cards-on-paypal

I think a test with £100 would be safer than gambling a £8,000 transaction then getting hit with fees and interest

Jinglish

So if the F&F via PayPal doesn't work for me I've got a plan B...

It will cost me 1.5% (-0.5%) fee but that's a very cheap loan considering I've got no decent money transfer options available.

I can sign up and use Tyl's free tap to pay feature which allows for transactions over £100 via a QR weblink. I essentially pay myself with my credit card and it will show as a purchase and not cash. NatWest will charge me 1.5% but then my credit card will give me 0.5% cashback as a spending perk and I get the "loan" for 0% until Jan '25. I can then pay the builder without him ever knowing. It's a win win all round.

https://www.tylbynatwest.com/tap-to-pay