pay pal question

Yes. If you already have funds in your account, it uses those first.

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They try to discourage you from doing that. I believe it is because they have to pay the fee. Using your credit card give you an extra layer of protection. If something goes wrong with the transaction and paypal does not give you satisfaction, your credit card payment can be cancelled.
 
Yes.

If you have a bank account attached to your PayPal account (which was required when I created my account), then payments are made from (1) cash in your account, (2) your bank account and (3) your credit card. I've never been lucky enough to have cash in my account but I know that you can manually switch payment from your bank account over to your credit card.
 
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