How to delete the Skype billing agreement on PayPal

You can't transfer money from a credit card to PayPal. However, you can add your credit card as a money source to fund purchases through PayPal. Your credit card number will not be given to the merchant, the charge will come from PayPal, so your card is still secure from online fraudsters.

To link a credit card as a funds source, go to My Account / Profile / Add or Edit Credit Card.

The costs are absolutely nothing.

By allowing PayPal to use your bank account, you are saving PayPal money - they don't have to pay your credit card company a transaction fee. That is the preferred mode of PayPal nowadays and they are doing their best to motivate people to finance their PayPal accounts with their bank accounts.

From my point of view, I'd rather use my CC and have another entity I can appeal to between PayPal and my money. But again, this means PayPal's cut from each of my transactions is lower (not that I care about it).