I know that this is probably super basic stuff, but…I’m 21, student and from Serbia (most payments are by cash), so I never really had any need for a credit card in my life. Pretty much all of payments in small neighborhood markets are by cash, at least half of people pay with cash even in supermarkets. The only place where credit cards dominate (but where cash is also available), is in places where they sell stuff like fridges, AC, heaters and so on, stuff my parents buy with their credit cards, so yeah, I never used a credit card in my life.
However, I’d like to make a paypal account, but to have one I first have to have a credit card, so can someone tell me what types of credit cards exist, what’s the difference between them, are there any payments or monthly charges for the cards themselves or are they free…?
Is there a card that works like a pre-paid sim card for phones, where once you’ve spent all your money, you can’t go in a debt, but instead simply remain at 0 dollars?
I plan on using the paypal for maybe selling some cheap 3d models I make, maybe a occasional donation for my website and that’s about it, so I don’t want anything expensive or risky.
My PayPal account is associated with my bank account. Any payments that I make are immediately charged against my bank account.
PayPal will let you purchase with a credit card. I did that one time for a large purchase.
Prepaid credit cards are available. Be very careful that they don’t charge monthly service fees or fees when you add money to the card. They add up fast.
If you can think of it in the finance world, it’s been done, so there are the aforementioned prepaid cards (buy with cash at the post office or bank), payment cards that actually just deduct funds from your bank account (possibly allowing you to split big expenses into several payments), cards with a line of credit that charge no fees but do charge interest if you do not pay the balance at the end of the month, cards offering to sweeten the deal with perks and gifts, etc.
If you do not want or need a credit card except for some one-time thing with paypal, just buy the cheapest pre-paid card for €5 or whatever, and that is all you’ll risk. Who cares about fees in that case?
You don’t need a credit card to make payments through PayPal, you need a bank account.
Many people (like me) have a bank account they use only for PayPal or other online purchases and only deposit money into that account as needed. Walk into any local bank and tell them what you need. This sort of thing is old hat to them.
Credit cards are useful to build a credit rating. I got one at 18 and paid off the entire balance in full each month until age 30 or so, so in that time it cost me $0.
In my experience, and it’s dated as I don’t use Paypal much, they actively discourage credit card use, and would really prefer that you use bank account ACH. Like they’d always default to checking, even if you told them not to. Credit cards are safer to use on Paypal as if stolen, you usually get your money back, while a drained bank account can be restored but in the meantime you’re SOL.
The main companies are Visa, Mastercard, and American Express (US also has Discover, but less international presence). They all have cards that have fees and ones that are free, though, and you should probably look for a free one. The credit card companies instead make money on a) fees charged to merchants for accepting payments with the card, and b) fees and interest when you don’t pay your bill in full when it is initially due. Merchants are free to accept one or all, but usually Visa is the most accepted, with Mastercard almost as common (AMEX has higher fees that some people merchants don’t want to pay).
Yes, per other answers.
Paypal does have its own fees if you sell something/accept money. You can make/accept payments without a fee, but that’s only intended for friends and family, and you shouldn’t use this with a stranger as if you get ripped off it’s harder to get your money back.
I would say that the first thing to do is to open a bank account. Use the same bank as your parents as that might be easier (talk to them first). Once you have a bank account (which will probably have restrictions like no overdraft etc) you can apply for a credit card if you want to. AFAIK you can link a Paypal account to a bank account.
Why don’t you just visit the bank (you may need an appointment) and ask them what you need to do.
I live in the UK.
I opened a bank account when I was 18 and got a credit card (no fee) soon after.
I made sure I never went overdrawn at the Bank and always paid off my credit card in full.
That was 46 years ago and I’ve never paid anything in fees or interest.
In the US there are consumer protection laws for credit cards that don’t exists for paypal and even debit cards. I personally would not attach paypal to a bank account because of the lack of consumer protection. I really think that not having a credit card in this day and age in the US is really inconvenient. There are some many things that are difficult buy without one.
There are protection laws for debit cards they just are more stringent for credit cards. For example, your maximum loss is $50 if you report it in 2 days, $500 2 to 60 days, but you’re screwed if it takes you 60 days to notice. With credit cards, the maximum is $50 period, and often $0.
ETA: that’s with an actual loss, your liability is $0 if nothing is taken.
The OP is in Serbia and is a student. It may well be difficult for him, with no credit history, to get a credit card. Bank account comes first; possibly guaranteed by parents.
