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Which PayPal Account Should I Use?

January 6th, 2009

A Beginner’s Guide to PayPal Accounts

paypal-account-logo.jpgAs a payment processor, PayPal acts as an intermediary between two online entities (usually businesses or people) that wish to conduct a money transfer. PayPal offers some degree of privacy when doing this because you only need to share your financial details with PayPal. This allows you to keep all of your other personal information private so you don’t have to share it with unknown parties you’re doing business with online.

If you have visited the popular auction site Ebay.com, you will notice that almost everyone who is buying or selling products on this site uses PayPal. This is no accident, of course; it is fairly well known that Ebay is now the parent company of PayPal, so it is not a major surprise that Ebay pushes its customers to use and accept PayPal payments.

In addition to sending or receiving money from friends and associates, you can use PayPal to buy many goods and services online. There are thousands of websites accepting PayPal as a payment option.

Once you are ready to get started, the first step is setting up an account with PayPal.com. Just visit the home page and click on the little blue “Sign Up” link that is usually found at the very top of the page. Now you will notice you are presented with three different choices of account type. Consider what you are going to be using your account for and then look at each account to determine which one is best for you.

Personal accounts:

This is the most basic of the three and has the advantage of being free to use (no transaction fees). If you only intend to purchase an occasional item or collect small amounts of money under five hundred dollars per month, then this is a good choice for you as this account has a limited capacity and is not suitable for larger transactions.

Premier accounts:

With a Premier account you can receive unlimited credit card payments and apply for a PayPal AMT debit card, which allows you to have direct access to your funds. This is good because you don’t have to wait on checks or deposits to your bank account before getting access to your money. However, you do have to pay a transaction fee each time you receive a payment. If you intend to do business as an individual seller then this is a good choice for you.

Business accounts:

There is not much difference between the business account and the Premier account. With the business account, you can still receive unlimited amounts of credit card payments and apply for the PayPal AMT card. You also have to pay the same amount of transaction fees each time you receive money. The only real difference is that you get to use your business name as the descriptor on the credit card holder’s statement to brand the name of your company. This is a good choice if you’re taking your business online and intend to set up an account under your company name instead of your personal name.

If you have no experience with making money online and are unsure of which type of account to set up, choosing the personal account is generally the safest and least expensive option. If your needs change as your income and transaction volume increases, you can always upgrade to a different account later. There is no charge to upgrade a PayPal account, although you will incur annoying fees once you start receiving money after your account has been upgraded.

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