When I started selling on eBay, I didn’t have any reward credit cards. Back then, I was so eager to have one because I would get cash back on whatever I pay for. I was planning to pay everything including merchandises, grocery, gasoline, eBay fees and shipping labels. Finally, I got my first cash back credit card (Discover it) and start using it on merchandises and eBay fees. However, I had trouble to setting up for paying eBay shipping labels by credit card. Actually, the procedure is very simple and easy. If there were an instruction to follow, I could have avoided all hassles. So, here is how to pay eBay shipping labels by credit card. If you have eBay or PayPal Extra MasterCard, it is a different procedure (much easier, but I had a big hassle again because of ignorance. Click here to see how to earn 2x points on eBay shipping labels.)

Step 1:  Cancel an existing automatic payment for eBay shipping labels

Log in your PayPal account and click My Account > Profile > My Money

Click “Update” on the row of “My preapproved payments”

Find “eBay Inc Shipping” in a list and click

Click “Cancel”. Don’t worry about a discount on shipping labels you are receiving from eBay. It will continue.

Step 2: Set up an automatic payment for shipping labels with another PayPal account

Go to eBay and try to print a shipping label. Check the box below “Purchase postage” then click “Purchase postage”. If you see the box checked, just click “Purchase postage” and it will show you an error message. Then, go back to the page and the box is now unchecked. Check the box again then click “Purchase postage”.

Choose “Create a PayPal account”

Enter the information of your credit card, name, address, phone#, email address (other than one used by an existing PayPal account.) and password. Check the box and click “Agree and Create Account”.

Now, the whole process is done. eBay Shipping Inc will automatically charge on your credit card. You should never receive money or add a bank account to a PayPal account you just created. If you add a bank account, eBay deducts shipping fees from the bank account. A balance of new PayPal account has to be always zero, otherwise it will deduct from a PayPal balance.

Please note that some credit cards have a limit on fee-free transaction. For example, Chase ink business credit card has a limit of 200 activities a month for free transaction fee. Over 200, it will charge 40 cents per transaction. You’d better avoid using these credit cards for paying shipping labels.

If you have eBay or PayPal Extras MasterCard, you can earn 2x points on shipping labels. But, because of a characteristic of the card, the procedure is different. Click to see “2X Points on eBay Shipping and Seller Fees with PayPal Extras MasterCard“

If you ever read reviews of PayPal Extras MasterCard, you will see many negative ones. Most of them complain about its reward program. They are telling the truth. It has low value of reward point. But if you use it correctly, PayPal Extras MasterCard is not bad at all, or rather one of credit cards you must have.

You earn 3 points per dollar on restaurant and gas, 2 points per dollar on eBay and PayPal, 1 point on everything else. When you redeem points for $50 cash back, you will need 6000 points. This means 1 points = $0.0083 (0.83% cash back). This is cheap. However, PayPal Extras MasterCard is the only credit card you can earn extra bonus on eBay purchase. Today, you can’t find eBay gift cards in any department stores or supermarkets, so buying gift cards with a credit card offering bonus reward is no longer available. And, not only eBay, but also many merchants accept PayPal. Use this card on eBay and PayPal only, nowhere else and the cash back will be 1.66%. This beats 1.5% cash back of Quicksilver Cash Reward.

You can also redeem points for gift cards. The higher denomination of gift cards you choose, the higher the value of points will be. For example, $25 Sears gift card needs 3300 points (1pt=$0.00757), $200 needs 22500 (1pt=$0.00888). And there is always one featured $25 gift card that need only 2500 points to redeem (1pt=$0.01). So, using the card only for eBay and PayPal gives 1.66% to 2% back to you.

eBay has its own reward program, called eBay Bucks. It doesn’t matter that you pay by PayPal credit card. You can receive eBay Bucks in addition to the reward from credit card. If you are an eBay seller, this card is much more valuable. You will earn 2x reward point by paying your selling fee and shipping labels as well (read “2X Points on eBay Shipping and Seller Fees with PayPal Extras MasterCard“)

Please note that maximum points you can earn in a card year is 50,000. If you use the card for only Paypal purchases, $25,000 is eligible for the reward points each year.

In a nutshell, PayPal Extras MasterCard is the best credit card for those who use eBay and PayPal a lot. Use the card for all merchants who accept PayPal, NOWHERE ELSE. No gas, no restaurant, either because there is a limit on point you can earn in an year, and there are other credit cards offering equal or better reward program for them.

You don’t buy stuffs on eBay? After you read some posts about gift cards, you will. Gift cards are essential items for money saving, and eBay is one of the biggest markets of discounted gift cards!