Don’t liquidate your debit cards via Paypal

Introduction

A reader asked this question the other day, “Has anyone tried to use a debit card via Paypal checkout?”  Now on the surface this sounds like a good liquidation strategy for your VGC, but it’s really not due to the opportunity cost (where are my TravelisFree readers at?) of not using a 2-3% card.  You have to assume a VGC is near the end of the MS funnel, next to cash.  Why?  Because you want to be able to liquidate it as close to ZERO FEE as possible.  Now in the past, when Evolve was still working, this was possible, but these days, the best liquidation option would be at Walmart for $.70 per $1000 (a fee of .07%.)  Now if you don’t like going to the armpit of America and I don’t blame you for that, there is a way to liquidate these in your pajamas for a fee.  Let’s say that fee was 1.5% (I’m just making that up)

Let’s look at a simple example – let’s say you wanted to buy these sweet ass grillz on eBay:

Payment option #1 – Use that $500 VGC on Paypal

Cool.  You liquidated your $500 VGC and now you have some sweet ass grillz.

Payment option #2 – Use a 2% card on eBay and take that $500 VGC to Walmart

This is where opportunity cost comes into play.  By using your VGC, you are missing out on the points/cashback you could have gotten by using your credit card instead.  Use your Double Cash card to pay via Paypal and get 2% back.  That means the cost to you would be $500 * .98 = $490.  Then you take that $500 VGC to Walmart and let’s say it cost you $.35 to liquidate [because you had 2 of them on hand.]  That means now you liquidated your VGC, have your hands on those sweet ass grillz, and hey look, you have $10 – $.35 = $9.65 left over to buy you that used cap on eBay too!

Payment option #3 – Use a 2% card on eBay and liquidate that $500 VGC from home

Once again, use your Double Cash, get 2% ($10) back on the purchase.  Now let’s say it cost you 1.5% to liquidate $500 in your pajamas, which comes out to a cost of $7.50.  That means you liquidated your VGC, got tthe grillz, and have $2.50 left over to buy you a pair of Costco hot dogs.

Conclusion

Now you may be saying, “Yeah, but what if I can get an unlimited supply of VGC with my 5% card?”  Well, that’s impossible.  Even if you could though, you are always still better off just liquidating from your pajamas at home and paying with a cc on Ebay/Paypal.  Now what if you don’t have a Walmart or a grocery store or don’t know how to liquidate your VGC from home – well…. then I guess go ahead and use it on eBay.