You can link a credit card to your PayPal account and use it to send money, but PayPal charges a fee for most transactions
PayPal accepts credit cards as a funding source. When you link a card to your account, you can use it to send money to other people, pay for online purchases, or cover your PayPal balance. However, PayPal treats credit card payments differently depending on what you are doing — some transactions are free, others cost 2.2% plus $0.30, and some cards may not work at all.
The key distinction is whether you are sending money to a friend or paying a business. Sending money to friends and family through PayPal's "Friends and Family" feature is free when you use a linked bank account or debit card, but costs 2.2% plus $0.30 when you use a credit card. Paying a business or merchant — either through PayPal.com or a website checkout — typically costs the merchant a fee, not you, so your credit card is charged the full amount with no additional PayPal fee added to your bill.
Key Takeaways
- Linking a credit card to PayPal takes a few minutes and requires your card number, expiration date, and billing address.
- Sending money to friends and family via credit card costs 2.2% plus $0.30 per transaction, while bank account transfers are free.
- Paying a merchant or business through PayPal does not add a fee on top of your credit card charge.
- PayPal may decline certain credit cards or flag transactions as high-risk depending on your card issuer and account history.
How to link a credit card to your PayPal account
Open PayPal.com and sign in. Click the gear icon in the top right corner and select "Wallet" or "Settings," then look for "Linked Cards and Accounts" or "Payment Methods." Click "Link a Card." Enter your card number, expiration date, CVV (the three-digit code on the back), and billing zip code. PayPal will verify the card by charging it a small amount — usually $1.95 — and then crediting it back within a few days. Once verified, the card is ready to use.
Some card issuers require you to confirm the charge through a text message or app notification before PayPal can complete the verification. If you do not see the charge post within 48 hours, check your card issuer's fraud settings or contact them directly — they may have blocked PayPal as a merchant. You can also add a card through the PayPal mobile app by tapping the menu, selecting "Wallet," and following the same steps.
Fees when you send money to friends and family
If you use PayPal's "Send Money" or "Request Money" feature to transfer funds to another person — not a business — PayPal charges a fee based on your funding source. A bank account or debit card transfer is free. A credit card transfer costs 2.2% of the amount plus $0.30. So sending $100 to a friend via credit card costs you $2.50 in PayPal fees on top of the $100 itself.
PayPal displays the fee before you confirm the transaction, so you will see the total cost before your money leaves your account. If the fee surprises you, you can cancel and use a different funding source instead. The recipient always receives the full amount you intended — they do not pay any part of the fee.
No added fees when you pay a business or merchant
When you use your credit card to pay a business through PayPal — either by clicking a "Pay with PayPal" button on a website or by sending a PayPal invoice payment — you are not charged an extra fee by PayPal. Your credit card is charged the full purchase price, and PayPal's fee (which the merchant pays, not you) does not appear on your statement.
This is the most common way people use PayPal with a credit card. You check out on a website, select PayPal as your payment method, choose your linked credit card, and complete the purchase. Your credit card statement will show the charge from the merchant or from PayPal on behalf of the merchant, but no separate PayPal fee will be added to your bill.
Why PayPal might decline your credit card
PayPal does not accept all credit cards. Some card issuers — particularly certain prepaid or store-branded cards — do not allow their cards to be used with PayPal. If you try to link a card and PayPal rejects it, the most common reason is that your card issuer has blocked PayPal transactions. Contact your card issuer's customer service and ask them to remove the block on PayPal payments.
PayPal may also decline a transaction even if your card is linked. This happens when PayPal's fraud detection system flags the transaction as unusual — for example, if you are sending a much larger amount than usual, sending to a new recipient, or logging in from a new location. PayPal will usually ask you to confirm your identity through email or by answering security questions. Once confirmed, the transaction will go through.
Credit card cash advances and balance transfers through PayPal
Some people wonder whether they can use PayPal to turn a credit card into cash. You cannot. PayPal does not treat a credit card as a cash advance tool. If you link a credit card and send money to a friend, you are not withdrawing cash — you are transferring funds that PayPal then delivers to the recipient's account. Your credit card is charged the amount plus the fee, just as if you had made any other purchase.
If your credit card issuer classifies PayPal transfers as a cash advance (some do), your card may charge you a cash advance fee and a higher interest rate on that portion of your balance. Check your card's terms or call your issuer to ask how they classify PayPal transactions. If they treat them as cash advances, you may want to use a bank account or debit card with PayPal instead to avoid the extra cost.
How credit card interest accrues on PayPal charges
When you use a credit card to pay through PayPal, the charge appears on your statement like any other purchase. If you pay your full statement balance by the due date, you owe no interest. If you carry a balance, interest accrues on the PayPal charge at your card's regular purchase APR, starting from the transaction date (not from the statement closing date).
The PayPal fee itself — the 2.2% plus $0.30 for friend transfers — is also subject to interest if you do not pay it off. So if you send $100 to a friend via credit card and do not pay your full balance, you will owe interest on both the $100 and the $2.50 fee. Paying your balance in full each month is the only way to avoid interest on any PayPal transaction.
Frequently Asked Questions
Does PayPal charge a fee if I use a credit card to pay for something online?
No. When you use PayPal to pay a business or merchant, PayPal does not add a fee to your credit card charge. The merchant pays PayPal's fee, not you. Your credit card is charged the purchase price only.
Can I use a credit card to withdraw cash from PayPal?
No. PayPal does not allow you to use a credit card to withdraw cash or transfer money to your bank account. You can only use a credit card to send money to other PayPal users (which costs a fee) or to pay merchants. To withdraw cash, you must link a bank account.
What if my credit card issuer blocks PayPal?
Contact your card issuer's customer service and ask them to remove the block on PayPal. Some issuers flag PayPal as high-risk and block it by default. Once you ask them to allow it, you should be able to link the card to your account.
Will PayPal charge me interest if I use a credit card?
PayPal itself does not charge interest. Your credit card issuer does. If you do not pay your full credit card balance by the due date, interest accrues on the PayPal charge at your card's regular APR, just as it would for any other purchase.
Is it better to use a debit card or credit card with PayPal?
For sending money to friends, a debit card or bank account is cheaper — transfers are free instead of 2.2% plus $0.30. For paying merchants, there is no difference in cost to you. If you want to build credit or earn rewards, a credit card may be better, but check whether your issuer treats PayPal transfers as cash advances, which would add extra fees.