Back at the start of December, I made 2 transactions through PayPal. Now, my PayPal account is hooked up to (1) my everyday transactions account, which I keep a very small amount of money in, and (2) my VISA card. Specifically, it’s set up to take cash if sufficient cash is there and, if not, to process a credit card transaction. That seems simple enough.

Checking my online bank statement, I noticed that (1) the transactions had come out of my transactions account and put it into a negative balance, even though I have no overdraft facility on that account, and (2) I had been charged a$30 reference fee.

Ouch.

I just rang my bank.

Turns out that, when I upgraded to the all-dancing, all-singing GOLD account with no ATM or foreign currency transaction fees, I got a special thing that “automatic transactions” are never rejected. Which I didn’t know (silly, me, must read those 60 pages of terms and conditions more closely). And PayPal transactions are considered “automatic transactions”.

So even though PayPal said, if there isn’t any money in your account then we will take it from your VISA card, my bank were kind and generous and allowed the transaction to go through.

And then slugged me for 30 bucks for the privilege.

I rang just now and sorted it out. They are refunding the reference fee, and I will delete access to my savings account from PayPal.

It seems the safest solution.