Do you have an Ebay account? If so, you've probably seen the option to pay for an item you have won by using PayPal. Let's take a look at what PayPal is exactly. PayPal is an online e-commerce website which allows users to make payments on items and allows the transfer of funds through the internet. This serves as an electronic alternative to paper transactions such as checks and money orders.
Why is this dangerous? For starters, signing up and accepting PayPal's terms of service means you are waiving your right to credit card consumer protection laws. In essence, this rules out your ability to issue a chargeback for unauthorized use of your credit card on their site. That means if someone accesses your credit card information from PayPal and uses that card to make fraudulent charges on the site, you will be held responsible for all transactions made. They even fail to mention that you aren't protected from phishing and spoof sites. You're responsible for charges made on your account, no matter what.
The biggest problem with PayPal is that this company makes you believe that it is a bank, when in fact, it is not governed by any of the laws that have been imposed on banks and credit unions. Think about this: Would you trust a company who intentionally hides its telephone number on its website? PayPal has admitted to this as an attempt to cut customer service costs. In my experience, companies who cut corners in customer service are the ones who are most likely to cut corners to take your money.