You only need to add the card to paypal, then link your ebay and paypal account. This will remove the invoice limit of 200 dollars on eBay. There is no reason to add the card to ebay, unless you plan on not linking the accounts together.
Adding the credit card with a bank account will remove the paypal monthly withdrawal limit.
Adding a credit card alone will not remove the withdrawal limits. You must also add either a social security number, or a bank account. You must have two of these three...
To answer your question, yes it works. You have to go to the website on the back of the card, whether it's vanillabillpay.com or vanillavisa.com will depend on the card. Both register addresses in the same way, and work with verifying eBay and Paypal.
I think it's a great idea to verify the paypal account, and use a different merchant. Using paypal opens you up to a whole host of problems down the road.
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