Sunday, February 15, 2009

Caution: EBay, PayPal & GE Money Bank Could Bad For Your Financial Health

If you ever intend to buy anything or ever sell anything on EBay, then you are pretty much required to sign up with an electronic payment service known as PayPal which is also owned by EBay. Instead of EBay allowing direct credit card payments, by using PayPal it can charge more fees to sellers for even small transactions. Like all electronic funds transfer services, PayPal, Moneygram and Western Union are all overpriced electronic services that are largely computer managed with high profits compared to normal reasonable cost bank services that only cost pennies in many cases.

One of the worst aspects of PayPal is that they have a financial arrangement with GE Money Bank that charges 21% or higher interest for a service known as PayPal Buyer Credit. If you don't sell items on EBay, but want to buy a rare music Cd once in a while on EBay, then you're really pretty much required to sign up for PayPal Buyer Credit.

What is so bad about EBay's PayPal Buyer Credit run by GE Money Bank is that this company loves high interest rates so much that it actually punishes any person who pays their owed credit in full in each month.

GE Money Bank incredibly has lowered my credit limit twice recently, both times after I paid my complete bill in full. I had a $950 limit. mainly used to buy a few music Cds here or there, which I paid in full, then suddenly the company cut my credit limit to $780 without notice, apparently to retaliate against me for paying my monthly bill in full. Then after I paid my monthly bill in full again the other day, GE Money Bank retaliated against me once again, now slashing my credit limit to just $540.

The fact of the matter is that GE Money Bank doesn't reward, but punishes those who pay their bills in full and prove themselves to be have the financial means to pay their complete bills in full. And when GE Money Bank reports back to credit rating services such as Equifax that they reduced your credit limit, but not noting that you are paying your full bill, then you appear as a bad credit risk and it only hurts your overall credit score and could drive up the interest rates on any other credit cards you own. It's an outrageous example of wrongdoing in the same credit and banking industry that recently asked the American taxpayer for billions of bailout tax dollars. It's dirty business of the worst variety.

EBay pretty makes it impossible to directly purchase any item from a seller without signing up for their unethical GE Money Bank service. But while other legitimate credit card companies reward those who pay their bills by offering them higher cash back or higher credit limits, GE Money Bank punishes those who pay their full bills seeking to create a large pool of persons paying high interest rates to their company each month. GE Money Bank also stands alone as an outrageous example of banking industry customer abuse, with many complaints posted on consumer websites by angry customers who have been abused by this outrageous and unethical company. Angry consumers need to step it up further and file formal complaints about PayPal and GE Money Bank with their state attorney general consumer affair offices and with congressional and senate banking committees.

EBay has become a multi-billion dollar business through many ruthless and tough business practices. GE Money Bank seems like a perfect match for such a cutthroat company like EBay that that has worked so hard to smash competing Internet auction sites with lawsuits or other legal actions, effectively destroying their competition. And EBay has made their site less appealing to small sellers by a variety of rules changes meant to encourage more big mega-seller retail companies that do millions of dollars in business each year to now largely dominate the sellers on EBay.

And EBay has always been about fees, fees, and even more fees. Out of an item selling for just 99cents on Ebay, Ebay or their PayPal business will come in for all but just a few cents of the total transaction, leaving almost nothing for the seller. And EBay profits from selling ads, so even ads that fail, which in some cases might be most of the listings for some product categories, EBay makes millions of dollars. It's nearly criminal.

EBay founder, Meg Whitman is now expressing some interest in running for the Republican nomination as Governor of California in the future. God save us.


At 4:50 AM, Blogger Lew Jaffe said...

I am no fan of Meg Whitman but I believe you are distorting the facts by omission. You can pay your Pay Pal bills with your own credit card or by deduction from your savings account.
Lew Jaffe


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