Why do I have to link my credit/debit card to my PayPal?

[BadEmperor]

Basically I was trying to order food on grub hub using my PayPal balance, but it asked for my debit and credit card. If I link it will it use my balance from my cards or from my balance? Is the linking just used for verification and for when you have no money in your PayPal?

[sharpiemarker · Accepted solution]

@BadEmperor 

The reason is so that Grub Hub can set up a billing agreement to help streamline your checkout experience on future orders and as back up source.

Once you add a card or select a linked card by clicking "Change" link on the card form (please read the checkout screens carefully, don't rush), it'll process the purchase with your PayPal balance IF the PayPal Balance is the main payment method you choose to pay with during the payment process. 

After the purchase, you view the transaction details in your activity page and in the Paid By section, you'll see Paid by PayPal Balance Backed by [Card XXX or Bank XXXX] <- whichever your back up source is and after a few days, it will say "Paid By PayPal Balance". Note, as part of the process, your 

back up source may be charged temporarily but will be released once the system determines the balance covers the entire purchase.

Now if you want to remove/cancel the billing agreement Grub Hub set up in your PayPal account so you don't get any surprise charges, go to:

Account Settings (gear icon) > Payments > Manage Automatic Payments

Select Grub Hub on left, click Cancel on the right.

You'll subsequently receive an email confirmation about the canceling of the billing agreement.

You can also leave it if you want to continue with quick, streamline checkout experience at Grub Hub.

This is my observation first hand. I was like, "Why is it asking me for a card?" too but I slowed myself down to read the screens carefully and that was what I experienced.

Hope this helps!

[BadEmperor]

But does it automatically make my PayPal balance the default payment method or is there someone I have to change that?

[sharpiemarker]

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@BadEmperor wrote:
But does it automatically make my PayPal balance the default payment method or is there someone I have to change that?

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I removed my billing agreement so I never got as far as a second order but you can select the default payment method in the billing agreement settings I mentioned in the Manage Automatic Payments page. And on your second order, to be extra observant when going through the checkout process again.