Avoid Paypal ATM Fees & Make Money!

Posted: October 9th, 2006 | Filed under: Internet Marketing | 8 Comments »

Avoid Paypal ATM FeesThe other day I needed to get some cash out of my Paypal account. With the Paypal debit card you can use any ATM to withdraw cash straight from your account. When I got to my bank I had my debit card in hand but I realized I had no idea what my PIN was. So instead of using the ATM I went inside to a teller and asked them to do a cash advance using my card.

Basically a cash advance is when a bank runs your debit card as a credit card (through the MasterCard network) and gives you cash for it. My bank, (and most banks) don’t charge for this service. I withdrew $400 which is the daily limit Paypal allows and I was happily on my way.

On the way home I realized I didn’t have to pay the usual ATM fee! Hrmm, did I just stumble across a new way to get cash out of my account while avoiding the ATM fee? I sure did! Not only did I avoid all ATM fees, but when I logged into my account later I realized I got money back!

Yes folks, I got paid to withdraw money from my account. Paypal has a 1% cash back feature for all purchases charged as credit. So not only did I avoid the ATM fees, but I also earned $4.00 for withdrawing it!

I tried this again with another $400 withdraw a few days later and the same thing, I avoided ATM fees and made $4.00 again.

I researched online and apparently a few people know about this already.

Now, I really have to ask myself if I’m technically making $4.00. Since every time I receive money from someone into my Paypal account I pay a fee to Paypal for it, I suppose I’m really just getting some of that money they took back. Either way, it beats ATM fees and I’ll gladly take the $4.00 discount! :)

Edit: Nov. 2nd, 2006 At my bank yesterday I went to withdraw $280.00 from my PayPal Account. I had $282 available funds. After 3 failed attempts to do a cash advance I called PayPal. It seems they’ve added a $3 fee now to all cash advances! Hrmm, perhaps they realized they were losing money with this loophole. Well, it was good while it lasted. :)

8 Comments on “Avoid Paypal ATM Fees & Make Money!”

  1. 1 Teresa said at 3:15 pm on November 28th, 2006:

    I was glad to find your note on this issue. I just went to my bank to pull some cash from my PayPal & put into my own bank account. When I got home & checked my PayPal account, I found that I was charged the cash advance fee AND it doesn’t look like they (PayPal) are giving any cash back on these transactions anymore. Urgh. Just a bit annoying that you can’t actually get your hands on any of your own cash immediately … now it’s ATM fee’s (PayPal and the ATM) or PayPal’s cash advance fee or wait 5 to 10 days for a bank transfer.

  2. 2 Frank said at 2:51 am on December 3rd, 2006:

    Yep, the party with the IN BANK cash advance on a Paypal debit card is over! I used it for quite some time. Not a complete loss as you still had to wait in line and once you got to a teller they had to do some lengthy paperwork. One big disadvantages with the cash machine is you must take out in $20 increments, where going inside you can specify an exact amount. I can understand them taking away the cash back award, but they should allow you a cash advance for free. The better I can manage my money and access it, the more action sales I can make. In my opinion eBay is too stupid to figure out that sales losses will result that more then off set the generated fees Hope they figure it out some day!

  3. 3 Jeff said at 10:14 am on February 7th, 2007:

    I discovered a different way to avoid ALL fees when withdrawing cash with your PayPal debit card. The trick? Grocery stores! Most grocery stores can and will give you cash back from a debit card without even making a purchase; you just have to ask the cashier (preferably when they are not too busy). Another advantage here is that you can request any amount of cash back (i.e. $27.88) instead of the standard $10 – $20 increments at ATM’s. I can’t guarantee that every grocery store will give you cash back on your debit card without making a purchase, but give it a try at your local store (and if all else fails, just buy a cent piece of candy).

  4. 4 John said at 1:32 pm on February 7th, 2008:

    I wouldn’t keep $400 in PayPal and withdraw it from an ATM. Wouldn’t that be considered suspicious!

  5. 5 Miles Baker said at 2:20 pm on February 7th, 2008:

    Suspicious? Hardly, I withdraw $400 from my ATM all the time. That’s one of the uses for the PayPal debit card.

  6. 6 davids said at 4:26 pm on February 29th, 2008:

    My name is David I would like to know if PayPal has it’s own personal ATM card?

  7. 7 Miles Baker said at 4:30 pm on February 29th, 2008:

    Yes, David, they have an a debit card you can use at the ATM, that’s what this article was about.

  8. 8 majic said at 2:04 pm on August 21st, 2010:

    Wow i just figured it out from a website source, it seems it would work i will try it, okay at the bottom of your card it says, this card was issued by jp morgan chace bank, so that means, go to a chase atm, bam no fees just like that!!!!