If you're going to use PayPal (and we all do sometimes), it's best to link it to a checking account that keeps a minimum balance and fund that account with one at the same bank. If you also opt for the PayPal MasterCard Debit Card, link that one back to the black hole checking account. Someone might compromise your PayPal account, but in order to get to the real source of funds and credit, they'd have to hack your bank account, too.
I have about $0.33 in my PayPal account and all of $10.00 in what used to be my "Poker Account."
Back in the day, I played A LOT of online poker. If you think CC fraud is rampant with e-cigs and other electronics dealers, you should have been around a virtual poker table about 10 years ago...
Edit to add: Also, don't discount the likelihood that your own security has been compromised. If your system is infected with malware or a keystroke recorder, nothing you do to protect yourself out on the matrix will help you.
DO NOT USE MICROSOFT INTERNET EXPLODER FOR ONLINE COMMERCE.
If you do, you are asking for identity theft. I don't care what Redmond tells you about Exploder, that software is absolutely riddled with security holes. Use Firefox, Chrome or Safari. And, get LavaSoft's AdAware for virus and malware protection. It's free for personal use and its security is as strong as goat's breath.