How to Avoid Paypal Fees

If you are sending money to someone via Paypal, you can now avoid paying their 3% + $0.30 fee.

It used to be that you had to receive the money at a “Personal” Paypal account to avoid paying fees. I wrote about this in 2008.

Now it’s easier. When you are sending money to your friend or whoever, just be sure to select that you are sending the money as a “Personal” charge and not a “Purchase”. See the image.

As long as you aren’t funding your account with a credit card, there are no fees :-). That’s right, no fees to send and no fees to receive. This is how Paypal was when it first started.


  1. Free says:

    The only thing I would warn you about is that PayPal sometimes stops letting you make personal transfers–and it can be impossible to find out why. I have long used it for things like sending money to my son to cover our share of the cell phone plan, or sending money to my wife. Recently, I found that the limit I could send to my wife had been reduced from $500 to $200, so I just started sending money more frequently. Then PayPal barred me from making instant transfers to my wife at all. I have spoken to a zillion people at PayPal about it, getting answers that ranged from, “It’s a glitch,” to “It’s because you have the same IP address,” to, “There is a bug in the system and it is affecting a lot of people.” Needless to say, my ability to make transfers via credit card (which requires fees to PayPal) is unaffected. I am still able to make transfers by e-check, but they take several days to go through (during which time, PayPal presumably earns interest on the money).

  2. lee says:



    I only mention the following because it came in on a mailing list I’m on at the exact same time we’re talking about this:

    > I just logged in to paypal and got a screen asking me to give the full
    > account number for one of my accounts, plus new password & security
    > questions.
    > It claims to be ‘account maintenance’ and at first I thought it was a
    > phish, but the SSL checks out and it provided the last 4 of my PP-tied
    > accounts, so I suspect it’s more like they flagged my account for some
    > reason.
    > Anyone know what’s going on? First I’ve seen of it.

    Accessing the site from a different country or browser triggered extra
    security checks. They do browser fingerprinting, including plugins
    and screen resolution, and any major changes could trigger something
    like this.

    (I worked in security, but not in the account protection group, so
    this is informed speculation on my part)

  3. Free says:

    I think we may have gotten the flip side of this problem: Because my wife and I have the same IP address, transfers from me to her trigger some kind of fraud prevention check. I have tried to explain that she is at the same IP address because she lives in the same house, and thus would have lots easier ways of stealing from me if she were into that. However, the people who answer phones are not the same as the ones who set up the security checks, so I can’t a) determine whether this is the problem, or b) get anyone to fix it if it is.

  4. Dawn says:

    Suddenly something makes everything clear! My account got flagged a couple of years ago for exactly that issue: I tried to paypal my husband money over a specific amount, saw the fees and so he declined the transaction and I wrote him a check instead. Then my account was flagged for “suspicious activity” even though NO MONEY WAS EVEN SENT!!! It took me a couple of weeks, several phone calls and lots of clueless people on the other end of the phone to remove the flag so I could use my account again. I’m guessing it was the IP address flag. You think they’d realize that more than one person might use the same computer or same internet connection.

  5. Bryan says:

    Wow, what an easy solution to this annoying problem. Now I can request all the money I want from friends. ;) Thanks for the tip!

  6. James says:

    I am pretty sure that paypal has changed since you posted this as I sent a payment to someone the other week as a ‘gift’ and although I didn’t get charged..the person receiving the money did. I think it is very unfair that paypal charges so much to send and receive money, it is not encouraging more people to use their service!


  7. lee says:

    James, just a minute ago I successfully sent money for free as a “gift” from my Premier account to my Personal account. Maybe look into this. Sorry.

  8. […] on How to Avoid Paypal Fees I got If that money they used to sent you didn’t claimed it for a couple of days. Do they […]

  9. Mike says:

    This is really helpful! I can now send money to my family and friends without worrying about the Paypal fees. Just don’t use this option to pay stuffs or services online. Otherwise, you won’t be covered by the Paypal’s refund protection.

  10. Shawn says:

    Thank you! This is useful information for me, and it’s nice to be able to send cash to family thru paypal now without having to lose some to what amounts to digital postage.

  11. lee says:

    Shawn, Mike, et all,
    Glad I could help!

Leave a Comment

Do not write "http://" or "https://" in your comment, it will be blocked. It may take a few days for me to manually approve your first comment.