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Paypal help: How to stop Paypal from debiting accounts you don’t want them to (preferred payment source funding methods) and more…

So… I have some chequing accounts where I keep $0 in there. They’re simply to receive payments or send payments but not out of my main chequing account. If I want to send amounts, I drop the exact amount in there to be debited, and I ask the debit to go through.

I do this, so I do not forget that the money is there for a reason, as I rarely log into these accounts, and I will not think: Oh what’s this doing here? *Transfer* …

The problem with this no-hassle method, is it causes a hassle on the Paypal side because since these accounts are at $0 to only receive from Paypal or send debits to other various accounts, when they try to debit the account, they’ll hit me with a NSF (insufficient funds charge), because… THERE IS NO MONEY IN THERE.

So here’s how to set up Paypal, to make sure they DO NOT debit the accounts YOU DO NOT want them to debit or using as a funding source, AND to set up a preferred method of payment.


Preferred method of payment tells Paypal: Please take money out of here first. This works great when you want to pay via Paypal for amounts online, in the moment or ad hoc, but not so great when it is an AUTOMATIC BILLING AGREEMENT.

Apparently Paypal uses this hierarchy when paying an automatic billing agreement or amount:

  1. Paypal Balance
  2. Chequing Account
  3. Credit Cards

So even if you have set up Credit Cards as your PREFERRED funding source (like I will show you in this step below), Paypal will still insist on trying your Chequing Account first, which in my case, is always at balance $0.

Nevertheless, set up your PREFERRED funding source as something that can always be debited without issue (in my case, it’s never my Paypal balance either), so I always put a credit card I know is solid for this.


Log into Paypal

At the top, where you see WALLET, click on it

Now click on the account you want to set up as PREFERRED.

Let’s pretend in this case, I want my Paypal Balance to be PREFERRED because I want it to take from that account rather than my credit card:

After that, it should look like there is a green PREFERRED box underneath the account you want as shown above where my CREDIT is actually my preferred account:

And the message at the bottom when you click on the account should now say this:

But let’s not stop here!

This does NOT solve the fact that this ONLY works when you shop or send money online for goods and services, but DOES NOT WORK for when it is an AUTOMATED billing preference (dear god why did they make it two different concepts)…

You have to now also go and confirm all the POSSIBLE funding sources for your billing agreements, any subscriptions, pre-authorized debits, maybe if you pay webhosting like me, it comes out of your “Paypal” account + agreement, so … there you have it.

You could do it the hard way, which is to go and manually edit every single billing agreement you have created (ex. all the shops you have frequented such as Sephora, DHL for fees, TheRealReal for shopping), and manually select for each one, where you want the money to come out of…


You could do it the easy way and simply only allow your select, guaranteed funding sources to be debited in the event of said billing agreements. Who knows, in the future you may decide to shop on FarFetch, and you set up another billing agreement with them, but then you have to log into Paypal, and edit the agreement to make sure they never debit your chequing and only charge to your credit card.

This constant back and forth of having to babysit each time you shop at a new retailer or business, is annoying AF.

So this is…


At the top when you have logged into Paypal, click on:

SETTINGS ICON (looks like a gear, left to the LOG OUT button)

The menu will show up for your SETTINGS

Click on PAYMENTS in the lighter blue header

Please note: You may not see the header show up automatically because for some reason I cannot fathom, the developers of Paypal in their infinite, genius wisdom, have decided to only show you the white part of the page with your name and info, in priority over the secondary header.

You have to scroll UP in the page, up up up up UP, and then the secondary header in a lighter blue as pictured above, will appear.

(I know. I thought I was going bonkers too.)

So yes, the header is there, I am not making stuff up, you simply need to scroll UP after clicking on the GEAR button for SETTINGS.

Now, simply click on MANAGE AUTOMATIC PAYMENTS underneath the AUTOMATIC PAYMENTS title:

Now, all of your automated, agreed-upon billing agreements and subscriptions are all listed in the left-hand corner.

Click on the button SEE MORE just underneath it:

And all the rest (or more) of your billing agreements will show up, as well as this magical button that says – MANAGE FUNDING SOURCES.

Click on that, and simply remove any funding sources you never ever want Paypal to debit or use again.


I hope this has been helpful. I have been tearing my hair out for the past year or two, intermittently when Paypal kept debiting accounts that had no money in them or for other reasons I did not want them to take money from, and now this should solve all of our issues.

If only everything was this simple (?) to resolve.

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