Oops transfer using paypal from empty bank account

December 22, 2008 1:07 PM

I accidentally made a payment through paypal using "Instant Transfer" instead of through credit card as usual, and don't have any money in my bank account to back it. How can I avoid getting hit by fees?

I already ACHed some money from another account to that bank to pad it, but I doubt it will get there on time. I am worried I will get hit with the bank's $35 overdraft fee. I called Paypal and they said it is too late to change funding sources. I called my bank and they said it's likely I would go into negative balance.

How does paypal transfer Instance Transfers - I'm assuming it's ACH? I might be able to cash advance from my credit card to the checking account, but that would incur a fee as well. What if I closed my checking account over the phone - would the transfer still go through? I read that if paypal is unable to grab from your bank, they will take it from your back source (credit card) which is fine with me.

I definitely learned my lesson to be more careful when using paypal.

posted by lpctstr; to Work & Money (9 answers total)

You might check out some of the Paypal "instant transfer" threads on Get Satisfaction.
posted by mattbucher at 1:21 PM on December 22, 2008

I did this once accidentally when making a very large purchase and wasn't able to get funds into my bank faster than paypal could take them out.

What I did was go into my bank and talk with a manager. I explained the situation. I then asked since I transact large amounts of money there and have been such a long standing customer if they could please waive the fee. (Which was something much higher than $35 I think since it was such a large overdraft) They said no but would they waive half of it. I agreed that was an acceptable solution since it was my fault.

Dunno if you have that option but thought I'd share my experience...
posted by zephyr_words at 1:32 PM on December 22, 2008

if paypal is unable to grab from your bank, they will take it from your backup source (credit card)

Isn't this the case? It says this right on the PayPal page.
posted by fixedgear at 1:53 PM on December 22, 2008

if paypal is unable to grab from your bank, they will take it from your backup source (credit card)

Isn't this the case? It says this right on the PayPal page.

---------

This is how I understand it. But sometimes the bank will go ahead and pay it, then charge you the fee.

I don't know what your cash advance fee is, but it might be a viable option.
posted by Fuzzy Skinner at 1:56 PM on December 22, 2008

Also check to see if your bank will automatically overdraft your account with your credit card. My bank (USAA) does this for no fee.
posted by nitsuj at 2:02 PM on December 22, 2008

Depending on who you bank with, and who you talk to, they *may* be able to waive the fees if they can see that you immediately attempted to transfer the money to your account. BofA did this for me once when I made that exact mistake, and gave me a stern warning not to expect the fees to be waived again. But one time was no problem.
posted by chez shoes at 2:19 PM on December 22, 2008

Best answer: Another option would be to put a stop payment on it. You can do that with ACH transactions, but your bank may charge a fee equal to the stop payment fee. The advantage is that it would be only one fee. If you let your account get overdrawn instead, you'll be hit with overdraft fees for every other item that hits your account after the Paypal transaction. And since many banks will order debits so that the most expensive items hit the account first, you could end up paying $35.00 for multiple charges that would have been covered if the paypal transaction wasn't there.
posted by saffry at 3:09 PM on December 22, 2008

Best answer: Since it's after the close of business in Seattle, it may be too late for either one of these solutions to be effective for this case, but:

If the account you authorized the transfer from is at a brick-and-mortar bank with branches in your area, if you can deposit cash there the same day you authorized the transfer, it should save you the overdraft fee.

Wiring money from another account may be less than the overdraft fee. USAA charges $20.

posted by oaf at 7:19 PM on December 22, 2008

who did you pay - can you get them to refund the payment? i did that once in the opposite case - i paid from a credit card instead of from my bank account. i got the vendor to refund it, which they were happy to do because they were going to lose money on the transaction.
posted by micawber at 8:10 PM on December 22, 2008