Giving up on PayPal debit card
Jan. 20th, 2011 01:22 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
johnridleyAs I mentioned here a while back, I've been using a PayPal debit card experimentally for a couple of months, and in general it's worked fine, and I certainly can't complain about the cash back (I posted a few days ago that they basically handed me $50 for MY screw-up). This account, BTW, is a low balance one where I put my "allowance" for buying personal toys, etc. and I use for daily spending like gas, fast food, etc. and internet purchases.
But today I decided to move away from them for a few reasons:
1) I initiated a funds transfer from our credit union to them last Friday, and the money STILL isn't there. I did a transfer to Ally.com within 5 minutes of that one, and it's been in the account for 2 days already. I know all banks sit on your money as a private float fund; they have your money in minutes but leave it floating, unavailable and not earning interest, for several days, but pushing a week is too much. Last night I had to use a credit card to finish an order that couldn't wait. And PayPal doesn't have an option to NOT use the balance up first before going to the card, so now I have a split transaction to keep track of.
2) The 1% cash back on credit transactions is very tempting; if I turn over the funds in that account once a month, it's effectively a 12% APY which is crazy good. But when I think about it, they're just giving me some of the funds that they deduct from the merchant's paycheck as fees. I'm basically complicit in stealing from the merchant (since I COULD use it as a debit card, if I wanted to). I decided that, tempting as it is, I'd rather not take that money. We've always tried to use our cards as debit cards when possible to make sure the merchant gets as much of the money as possible, and it just felt a little dirty using it as a credit card.
3) Just back to the old "they aren't a real bank" thing. I'm never going to keep the bulk of my funds there for that reason, so I think it makes more sense to just do everything somewhere else, in one place. If I have all my money in one place, I can move funds to the account with the debit card in 30 seconds, not a week.
So, I've added a checking account to my Ally.com group. I already had an Ally savings account from a couple of months back, to put overflow from the PayPal account (where I don't want more than $500) and also to try to build a vacation and possibly an emergency fund.
Ally checking seems like a great account; debit card, as many free checks as I can eat, no fees (apart from bounced check, returned deposit, wire transfer, that sort of thing, and even those are the lowest I've ever seen), no minimum balance, 0.5% interest (I make 1.09% on the savings account), free automatic transfer from savings to checking in case of overdraft, and the big one, if I use a "foreign" ATM that charges me a fee, THEY pay the fee (reimbursed at the next statement date). Lots more good stuff, nothing bad that I've found.
They have a money market account, but of course those have federal limits of 6 withdrawals a month (not good for my primary spending card), and they don't pay any better than the savings account, and with free auto transfers from savings to checking, I can just keep most of my money in savings anyway and earn just as much interest.
I did look around at local banks and credit unions, but none of them are touching the interest rate OR the low/no fees. Best I found was a pretty good interest rate, I think 1.54%, at a credit union, but it had all kinds of rules and stipulations that I couldn't meet unless it was the primary account (my paycheck would have to be direct deposited into it, I'd be required to make a minimum number of debit transactions per month, etc).
Of course I'll keep the PayPal account; it's just too convenient for a number of things, including buying from companies that I'd rather not give a credit card number to.
But today I decided to move away from them for a few reasons:
1) I initiated a funds transfer from our credit union to them last Friday, and the money STILL isn't there. I did a transfer to Ally.com within 5 minutes of that one, and it's been in the account for 2 days already. I know all banks sit on your money as a private float fund; they have your money in minutes but leave it floating, unavailable and not earning interest, for several days, but pushing a week is too much. Last night I had to use a credit card to finish an order that couldn't wait. And PayPal doesn't have an option to NOT use the balance up first before going to the card, so now I have a split transaction to keep track of.
2) The 1% cash back on credit transactions is very tempting; if I turn over the funds in that account once a month, it's effectively a 12% APY which is crazy good. But when I think about it, they're just giving me some of the funds that they deduct from the merchant's paycheck as fees. I'm basically complicit in stealing from the merchant (since I COULD use it as a debit card, if I wanted to). I decided that, tempting as it is, I'd rather not take that money. We've always tried to use our cards as debit cards when possible to make sure the merchant gets as much of the money as possible, and it just felt a little dirty using it as a credit card.
3) Just back to the old "they aren't a real bank" thing. I'm never going to keep the bulk of my funds there for that reason, so I think it makes more sense to just do everything somewhere else, in one place. If I have all my money in one place, I can move funds to the account with the debit card in 30 seconds, not a week.
So, I've added a checking account to my Ally.com group. I already had an Ally savings account from a couple of months back, to put overflow from the PayPal account (where I don't want more than $500) and also to try to build a vacation and possibly an emergency fund.
Ally checking seems like a great account; debit card, as many free checks as I can eat, no fees (apart from bounced check, returned deposit, wire transfer, that sort of thing, and even those are the lowest I've ever seen), no minimum balance, 0.5% interest (I make 1.09% on the savings account), free automatic transfer from savings to checking in case of overdraft, and the big one, if I use a "foreign" ATM that charges me a fee, THEY pay the fee (reimbursed at the next statement date). Lots more good stuff, nothing bad that I've found.
They have a money market account, but of course those have federal limits of 6 withdrawals a month (not good for my primary spending card), and they don't pay any better than the savings account, and with free auto transfers from savings to checking, I can just keep most of my money in savings anyway and earn just as much interest.
I did look around at local banks and credit unions, but none of them are touching the interest rate OR the low/no fees. Best I found was a pretty good interest rate, I think 1.54%, at a credit union, but it had all kinds of rules and stipulations that I couldn't meet unless it was the primary account (my paycheck would have to be direct deposited into it, I'd be required to make a minimum number of debit transactions per month, etc).
Of course I'll keep the PayPal account; it's just too convenient for a number of things, including buying from companies that I'd rather not give a credit card number to.
