To play it safe I have linked ONLY a seperate checking account to my PayPal account. It is seperate from my other accounts. I keep the minimum amount of money in this account and it only gets used with ebay/paypal transactions. If I sell a big ticket item that is purchased with a PayPal account, as soon as I receive that money I take it out of the checking account and put it in my regular savings account, which is with a seperate bank completely. I do not link any credit card accounts with my PayPal account.
You should also not be using your credit card number to purchase over the internet. There is another way of using your credit card account without giving out the real number. Check with your credit card institution for information on them giving you a temporary number linked to your credit card that you can assign a spending limit and time limit with each transaction.
Agreed. I keep the one I use for most of my purchases online to a $500 spending limit so even if someone steals the number they can't do TOO much damage.