PayPal Credit Card Fees: Charges for Paying and Accepting Payments

Dayton Uttinger
Charges for Paying and Accepting Payments

PayPal one of the most popular electronic money transfer system, so it’s natural to jump on the bandwagon. It can make paying for things online (or even in store) more convenient. On the other hand, if you’re worried about it being too good to be true (read: hidden fees), you’re not alone. However, PayPal accounts are free, and the vast majority of purchases won’t cost you an extra dime. You’ll only be charged extra when you receive money as a purchase, transfer money from your debit card to load your PayPal account, or if you withdraw funds from your PayPal account as a check.

If you want to understand a little more about PayPal and where you money is going (or not going), then read on.

Table of Contents

Do I Pay a Fee to Use My Credit Card on PayPal?

No, as long as you purchasing in the U.S. If you are buying from an overseas seller or you are traveling abroad, then there might be an additional fee.

However, assuming that you are purchasing within the U.S., neither PayPal nor your credit card company should impose any extra fee. Furthermore, you can’t make any cash advances through PayPal, so you won’t have to worry about that fee either.

PayPal Credit Card Processing Fees

There are fees associated with any purchase made using credit cards, but you don’t pay them. The seller does. So when you use a credit card to buy your morning coffee, the coffee shop pays either a transaction fee or a percentage of your purchase to the credit card company. This is why some businesses don’t accept certain credit cards, because they’re unwilling to pay the processing fee.

PayPal offers a line of credit, aptly called PayPal Credit, which works in a similar way as any other of the major credit cards, only everything is digital. And like most credit cards, PayPal Credit is free to use — if you are the one making purchases, and pay back whatever amount of credit you used.

Unless you accept PayPal at your own business, you likely won’t have to worry about processing fees for credit cards or PayPal Credit. The only exception is if you are transferring money to another PayPal user, in which case you may be charged a processing fee, depending on where the money is coming from. This can be avoided by transferring through your linked bank account or your PayPal account directly.

How Much Does PayPal Charge Per Transaction?

This ultimately depends on your unique situation. Merchants and retailers agree to specific rates when they agree to accept PayPal, and this is determined based on location, nonprofit status, and the size of customer transactions.

If you are transferring money and are worried about how much you’ll be charged, PayPal has a chart here.

Making and Receiving Personal Payments or Money Transfers

However, that’s not all you need to know about transfers with PayPal; there are ultimately two different types of transfers.

Normal Transfers

These transfers involve a linked bank account. If you want to transfer money from your PayPal account to your linked bank account or vise versa, then it’s free. It is usually processed within one business day.

However, if you withdraw funds from your PayPal account balance and you want it in the form of a check, there is a small fee associated with that, because the physical check must be mailed to you. Generally, it is faster (and free) to simply transfer funds into your bank account, and then make a cash withdrawal through your bank.

Instant Transfers

Alternatively, you can link your bank account to a debit card, a service known as PayPal Instant Transfer. This has the advantage of being much quicker than a bank transfer, usually being completed within minutes. On the other hand, you will be charged a small fee of 25 cents per transfer.

Using PayPal can be incredibly convenient, but you want to know exactly what fees you’re signing up for before you use the service.

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