Can I Use a Credit Card on PayPal?

Dayton Uttinger
Can I Use a Credit Card on PayPal?

You’re free to use a credit card on Paypal if you want to. You don’t need to have a credit or debit card to use Paypal, but it can be convenient to have more than one payment method on file. If you play your cards right, it can be highly advantageous to use your credit card on PayPal, especially if you want to build credit or earn rewards points.

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Can You Pay PayPal With a Credit Card?

You can use a credit card to pay someone on PayPal. You can use your card to make a purchase, as well as to send money to someone through PayPal

Unless you shop internationally, you won’t be charged any fees for purchasing something on PayPal with your card. Merchants have the responsibility of paying credit card processing fees, not customers. 

You’ll incur fees if you use your credit card to transfer money to someone on PayPal. If you want to avoid these fees, use your bank account to transfer money for free.

PayPal, Cash Advances, and Your Credit Card

PayPal will not charge a cash advance fee if you use your credit card or debit card to make a payment. This applies to both purchases and money transfers. 

The same can’t be said for your credit card company. If you use your credit card for a standard PayPal transaction, you’re in the clear. The danger only comes from getting a cash advance through your credit card

If you make a cash advance purchase on PayPal, you will be subject to additional fees and interest charges by your credit card provider.

Does PayPal Have a Credit Card?

PayPal has two branded credit cards: the PayPal Cashback Mastercard and the PayPal Extras Mastercard. Neither has an annual fee, but you must have a PayPal account to apply for either card.

The PayPal Cashback Mastercard earns 2% cash back on all purchases. You’ll have to redeem your rewards directly to your PayPal account, though there’s no minimum redemption threshold to do so. 

The PayPal Extras Mastercard has a tiered points system, where you earn three points for each dollar spent on gas and restaurant purchases, two points for PayPal and eBay purchases, and one point for other purchases. You can exchange your points for gift cards or send the cash back to your PayPal account.

In addition, PayPal offers several other payment options that, while similar, are not true credit cards:

PayPal Credit

PayPal Credit is a line of credit that works with all PayPal payments. So if you’d like to buy something using PayPal and put it on credit, you can skip a step by just having a PayPal line of credit under Comenity Capital Bank. 

You do have to apply for PayPal Credit, same as any other credit card. Once approved, your account will be assigned a minimum of $250 in credit, though you could get approved for a higher amount if you have excellent credit.

There is no annual fee for PayPal credit, although the annual percentage rate (APR) is around 24%. Luckily, you have six months to pay off purchases of at least $99 before incurring any interest charges.

PayPal Debit and Prepaid Mastercards

PayPal offers the PayPal Prepaid Mastercard. It is not a credit card; rather, it is a reloadable prepaid card connected to your PayPal account. You can transfer money from your PayPal account to the card, and then use the card to pay for your purchases.

PayPal also offers the PayPal Cash Mastercard, a debit card linked to your PayPal account. It works like a traditional debit card that is connected to a checking account but will pull from your PayPal account instead. With the debit card, you can access your PayPal funds quickly without having to transfer the money from your account to your card.

Pay in 4

Pay in 4 is PayPal’s buy now, pay later service. Instead of paying for the entirety of your purchase, you can make a down payment and pay off your remaining balance in three installments. PayPal backs the purchase, so instead of repaying the merchant, you have to repay PayPal.

You must pass a soft credit check to get approved for Pay in 4. Further, Pay in 4 is only available for certain purchases ranging from $30 to $600. There are no interest charges, but you’re expected to make one payment every two weeks. If you fail to do so, you will be charged a late fee.

What Credit Cards Can I Use With PayPal?

You can use all four of the major credit cards — Visa, MasterCard, Discover, and American Express — to make payments with PayPal. You can link up to eight different cards to a single account. However, for security reasons, you can’t link the same credit card to multiple PayPal accounts at the same time. 

Can I Earn Rewards by Using a Credit Card on PayPal?

As long as you have a rewards credit card linked to your account, you can earn rewards when you use your credit card on PayPal. If you link multiple rewards cards to your account, you can use your PayPal transactions to maximize your rewards.

That being said, take care when using your rewards card to transfer money to another person. If you aren’t careful, the fees charged could be significantly higher than the rewards earned, leading to a net loss for the transaction. While this would reduce the amount you’d have to pay for your transaction, you also won’t be able to make the most of your rewards.

Pay attention to rotating offers from your card provider. Some credit card companies will bring in bonus offers each month or quarter, often giving a more generous 5% reward (as opposed to the typical 1% to 2%) on certain transactions. If PayPal is a special rotating offer with a higher reward rate, you stand to gain a lot more from your transactions.

How to Add a Credit Card on Paypal

Adding a credit card to your PayPal account is fairly straightforward, but the process differs depending on the device you’re using.

In the Mobile App

If you want to add a credit card using the mobile app, you’ll need to:

  1. Open the PayPal app on your smartphone.
  2. Tap the Settings button, which is shaped like a gear, in the upper right corner of the screen.
  3. Tap “Banks and Cards.”
  4. Tap the “+” sign in the upper right corner of the screen, and select “Debit or credit card.”
  5. Enter your card information, then tap “Link Card.”

In a Web Browser 

To add a credit card using a web browser, simply:

  1. Go to the PayPal website. Log into your account if you aren’t logged in already.
  2. Click “Wallet” at the top of the page.
  3. Click “Link a debit or credit card.”
  4. Enter your credit card information and select “Link Card.”

You may be asked to confirm your card information before you can begin using it on PayPal. To verify that you own your card, PayPal will charge your card and generate a four-digit code on your card statement. Once you have that code, you can enter it into your account by navigating back to the “Wallet” screen.

If you are not asked to confirm your card, then you have successfully linked your credit card to your PayPal account. You can begin using it immediately.

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