Last week, money-expert Martin Lewis highlighted how PayPal will start charging millions of customerrs an annual ‘inactivity’ fee from December.
PayPal defines ‘inactive’ as an account where the user hasn't sent, received or withdrawn money, or logged into their account for a set period of time.
The company said if your account has been inactive for 12 or more consecutive months, you will be charged £12 a year from December 16.
But they also said it has no plans to close inactive accounts which have a zero balance - so if you have an idle log-in that's empty and not linked to a bank account, you won't be charged.
And, looking at the fine print of the terms and conditions of the penalty, it won’t apply to users in Ireland.
The PayPal statement online reads: “We are establishing an inactivity fee for accounts that have been inactive for at least 12 consecutive months.
"This provision does not apply to PayPal users registered in Ireland and to personal accounts registered in Hungary."
If there's less than £12 in your account, PayPal will use those funds and zero your balance and if you don't have any money in your PayPal account, or your balance is negative, you won't be charged.
Martin and his MoneySavingExpert.com team also explained how PayPal has said it will warn inactive users about the £12 fee 60 days, 30 days and then seven days before they are charged.
How can I avoid the PayPal fee?
In the latest edition of the weekly Martin Lewis email, the consumer champion explains how users can easily avoid paying the £12 fee.
The MoneySavingExpert.com website explains: “If you have a PayPal account but don't regularly use it, you can avoid the fee by simply logging into your account (or making a transaction) on or before 15 December 2020.
“This means you will have been ‘active’ in the previous 12 months, so won't be charged.”
MoneySavingExpert.com also advises that if you’re not using your PayPal account and don't want to risk being charged, you can close the account by going to ‘Settings’ and selecting ‘Close your account’ at the bottom of the ‘Account’ menu.
Alternatively, MoneySavingExpert.com says you can also keep the account open but transfer any money you have there into another account, as you won't be charged in future if your PayPal account has a zero balance.
If you're an irregular PayPal user but still want to keep your account open and maintain a balance, just set a calendar reminder on a certain date every year to ensure you're not charged the fee in future.
You can read the full details of the latest PayPal User Agreement online here.
