Hey! I haven't figured that one out myself. What colleagues of mine do is to either withdraw the funds to your bank account, or send payment to an e-mail domain under your control. Both methods make your PayPal balance zero which forces you to fund using a backup method. This is where you want to use your rewards credit card for the percentage cash back. If you send PayPal payment temporarily to an e-mail address you control but don't have a PayPal account, you can cancel afterwards to bring the balance back to your account. It is in PayPal's interest to fund from balance as much as possible. When payment is balance to balance, the payment is just being sent from one PayPal server to another. There's no external financial transaction occuring, so PayPal pays nothing. But they have a chance to charge the sender or recipient a fee, which ends up being pure profit. I hope this explains why PayPal encourages you to pay from the Balance whenever possible. p.s. If you appreciate my response, please click on the thumbs up button.
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