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Key takeaways

  • PayPal allows you to link accounts and cards, including credit cards, to its platform to make it easier for you to send and receive money.
  • Using a credit card on PayPal might be convenient, especially if you’re looking to score some credit card rewards, but that convenience likely won’t be worth it once all the fees and interest rates are factored in.
  • PayPal charges certain fees to those using a credit card to make a transfer, and card issuers often view those money transfers as cash advances. Cash advances come with their own set of high interest rates, which start accruing immediately.

Whether you’re sending money to loved ones or paying for goods and services, PayPal is a popular choice for online money transfers. You might wonder whether using your credit card to send money with PayPal transactions makes sense — especially in terms of earning reward points. We explore the pros and cons of using a credit card with PayPal, and whether the rewards you earn can be worth the high transaction fees.

Should I use a credit card to send money on PayPal and earn rewards?

You can use a credit card to send money from your PayPal account to friends or family. PayPal secures transactions on its platform through encryption, reducing the likelihood of ID theft. And depending on your credit card issuer or card, you may also earn rewards — like cash back, points or miles — for transactions processed through PayPal, just as you do for other credit card purchases.

But watch for transaction fees on money transfers that can eat into any rewards you might earn. When you use a credit card to send money with PayPal, you pay a processing fee equal to 2.9% of the amount you’re sending, as well as a fixed $0.30 fee on each transaction. International fees may be even higher, depending on where your recipient lives and conversion rates. If your credit card offers 1.5 percent or 2 percent cash back, you may end up losing money to the fees alone.

To add to that expense, a person-to-person cash transfer might be coded as a cash advance to certain card issuers, attracting higher APRs and fees than a typical transaction. Plus, those high APRs apply from the moment the cash advance is processed — no grace period. If the transaction is coded as a cash transfer, what you spend may not even count toward the minimum for any bonus on your card.

Unless you’re working toward a hefty welcome bonus or using a card that earns boosted rewards for PayPal, it’s not the cheapest way to send money.

How much will I pay for using a card to send money through PayPal?

PayPal allows you to send money to other PayPal recipients for no additional fee when you pay from your PayPal account balance or a linked bank account. It’s when you use a credit card to send money that things can get expensive.

Let’s say you need to send $500 to a loved one. That $500 transaction will attract both a 2.9 percent processing fee and a fixed fee of 30 cents.

Transaction fees Total on $500
2.9% processing fee $14.50
$0.30 fixed fee $0.30
Total amount to your credit card $514.80

If that same charge is considered by your card issuer to be a cash advance, you might pay an additional 3 percent to 5 percent in transaction fees on your card statement — adding $15 to $25 more to the total. And that total would begin immediately attracting a high cash advance APR, typically 24.99 percent to 29.99 percent.

How to send money on PayPal using a credit card

If you’ve weighed the costs against the convenience of using PayPal to send money with a credit card and still want to continue, you should be able to do so pretty easily.

Simply create or sign in to your account and take these six steps:

  1. Link your credit card. Select or tap Wallet and add your debit or credit card to your account.
  2. Request to send money. Go to Send and Request on the PayPal site or tap Payments from the app.
  3. Enter your recipient’s details. Add the person’s name, PayPal username, email address or mobile number and click or tap Next.
  4. Indicate the transfer amount. Enter the amount you’re looking to send, choose the currency and add any notes for your records. For international transactions, pay special attention to the additional fees.
  5. Choose your payment method. Select the credit card linked to your PayPal account.
  6. Confirm and send your payment. Carefully review details and fees, and click or tap Send Payment Now.

Credit cards that offer bonus rewards for PayPal transactions

If you frequently use PayPal, consider a card that offers bonus rewards for PayPal transactions. Some options include:

PayPal Cashback Mastercard

The PayPal Cashback Mastercard®* is a no-annual-fee card that offers 3 percent cash back when you shop with PayPal and unlimited 2 percent cash back on all other purchases. You also earn 3 percent cash back when you send money to other PayPal users.

Chase Freedom Flex

The Chase Freedom Flex℠* is a popular card that offers boosted 5 percent rewards on PayPal transactions as part of its rotating bonus categories. It also offers 3 percent cash back on dining and 1 percent cash back on all other purchases, as well as limited-time offers that have included 5 percent cash back on Lyft. All of this with no annual fee.

The bottom line

While PayPal can be convenient, it’s among the most expensive ways to send money to friends, family and other PayPal users if you’re using a credit card to fund the transaction. Expect to pay hefty fees that will eat into any card rewards you stand to earn. Your card issuer may also treat the transaction as a cash advance, which comes with steep fees and APRs — with no grace period.

If you’re a frequent PayPal customer, look into a credit card that offers boosted rewards on PayPal transactions. And learn about other ways to send money with your credit card, including lower-cost alternatives.

*Issuer-required disclosure statement
Information about the PayPal Cashback Mastercard® and Chase Freedom Flex℠ has been collected independently by Bankrate. The card details have not been reviewed or approved by the card issuer.