Yes, you can send money on PayPal with a credit card, but PayPal charges a fee and treats it differently than a bank transfer
PayPal accepts credit cards as a funding source when you send money to another person. However, PayPal classifies credit card transfers as cash advances, which means the card issuer charges you a cash advance fee in addition to PayPal's own sending fee. This makes credit card transfers significantly more expensive than using a bank account or PayPal balance.
The exact cost depends on two separate fees: one from PayPal and one from your card issuer. Your card issuer typically charges between 3% and 5% of the amount as a cash advance fee, and this fee appears on your credit card statement. PayPal charges an additional 2.2% plus $0.30 for domestic transfers to a bank account, or 2.2% plus $0.30 for transfers to another PayPal account (rates vary for international transfers).
If you send $100 using a credit card, you might pay $3 to $5 from your card issuer plus $2.50 from PayPal, totaling $5.50 to $7.50 in fees alone. Using your bank account or PayPal balance costs significantly less.
Key Takeaways
- PayPal treats credit card transfers as cash advances, triggering a cash advance fee from your card issuer on top of PayPal's sending fee.
- Your card issuer's cash advance fee ranges from 3% to 5% of the transfer amount and appears on your credit card statement.
- PayPal charges an additional 2.2% plus $0.30 for most domestic transfers, making credit card the most expensive funding method.
- Interest on cash advances begins accruing immediately, unlike regular purchases, so the total cost grows if you carry a balance.
- Bank account transfers and PayPal balance transfers cost far less and should be your first choice if either option is available.
How to send money on PayPal using a credit card
Log into your PayPal account and select "Send Money" from the main menu. Enter the recipient's email address or phone number, then enter the amount you want to send. PayPal will show you a summary of fees before you confirm.
At the payment method screen, select your credit card from the list of stored cards. If your card is not already saved, you can add it by entering the card number, expiration date, and CVV. PayPal will then display the total amount you will be charged, including both PayPal's fee and the cash advance fee your card issuer will charge.
Review the fee breakdown carefully. The fee from PayPal appears in the PayPal summary, but the cash advance fee from your card issuer will not show until it appears on your next credit card statement. Confirm the transfer to complete it.
Why credit card transfers cost more than other methods
Credit card companies classify PayPal transfers as cash advances rather than regular purchases. Cash advances trigger higher fees and interest rates because card issuers view them as riskier than standard spending. A regular purchase might have 0% interest if you pay in full, but a cash advance begins accruing interest immediately at a rate typically 5% to 10% higher than your purchase APR.
PayPal's own fee structure also penalizes credit card use. When you fund a transfer with a bank account, PayPal charges only 1.76% plus $0.26 for domestic transfers (rates vary). With a credit card, the rate jumps to 2.2% plus $0.30, and that is before your card issuer's cash advance fee. The combination of both fees makes credit card transfers the most expensive option available.
If you carry a balance on your credit card, the interest compounds daily on the cash advance amount. A $500 transfer at 25% APR costs $3.13 in interest per month if you do not pay it off immediately. Over six months, that interest alone exceeds $18.
When you might use a credit card despite the fees
Credit card transfers make sense only in specific situations. If your bank account is temporarily unavailable or you need to send money before your next deposit clears, a credit card might be your only option. Some people use credit cards to send money when they want to earn cash back or rewards points, though the fees usually exceed the rewards value.
If you are sending a small amount—under $50—the flat fee component ($0.30 from PayPal plus your card issuer's minimum cash advance fee) might be proportionally smaller than for larger transfers. However, the percentage-based fees still apply, so even small transfers remain expensive.
Business transfers and international payments have different fee structures. If you are sending money internationally, compare the credit card rate to PayPal's international bank transfer rate before deciding. For business payments, PayPal offers a separate invoicing system that may have different fee rules.
Alternatives that cost less
Linking a bank account to PayPal is the cheapest way to send money. Domestic transfers to another PayPal account cost 1.76% plus $0.26, and transfers to a bank account cost the same. If you have a PayPal balance from previous sales or transfers, sending from that balance costs nothing.
Debit cards sometimes appear as an option in PayPal's payment method list, and they are treated differently than credit cards. Debit card transfers typically do not trigger cash advance fees because they draw directly from your bank account rather than creating a line of credit. However, confirm with your bank that they do not classify debit card transfers as cash advances, since some banks do.
If speed is your priority, PayPal's instant transfer feature (available in some regions) sends money to a linked debit card or bank account within 30 minutes for a flat $0.25 fee. This is faster and cheaper than a credit card transfer for most amounts.
How the cash advance fee appears on your statement
The cash advance fee from your card issuer does not appear as a separate line item labeled "PayPal transfer." Instead, it shows as a cash advance fee or finance charge on your credit card statement, usually grouped with other fees and interest charges. The amount is calculated as a percentage of the transfer amount you sent through PayPal.
If you sent $200 through PayPal and your card issuer charges a 4% cash advance fee, you will see a $8 charge on your statement. This fee is separate from the $4.70 that PayPal charged (2.2% plus $0.30). Both charges reduce your available credit and count toward your credit utilization ratio.
Interest on the cash advance begins accruing immediately, even if you have a 0% introductory rate on purchases. The interest rate for cash advances is typically your card's standard APR or higher. If you do not pay off the cash advance within the billing cycle, interest compounds daily until the balance is cleared.
Frequently Asked Questions
Does PayPal charge a fee if I use a credit card to send money to a friend?
Yes. PayPal charges 2.2% plus $0.30 for domestic transfers to another PayPal account, regardless of whether you use a credit card, bank account, or PayPal balance. Your credit card issuer then charges an additional 3% to 5% cash advance fee on top of PayPal's fee. Bank account transfers cost less because they avoid the card issuer's cash advance fee.
Can I avoid the cash advance fee by using a credit card?
No. Any transfer from a credit card through PayPal is classified as a cash advance by your card issuer, and the cash advance fee is mandatory. The only way to avoid it is to use a bank account, debit card, or PayPal balance instead. Check with your bank to confirm that debit cards are not treated as cash advances by your specific institution.
What happens if I do not pay off the credit card transfer right away?
Interest begins accruing immediately on the cash advance amount at your card's cash advance APR, which is typically higher than your purchase APR. Unlike regular purchases, there is no grace period. If you carry the balance for several months, the interest charges can exceed the original transfer amount.
Is there a limit to how much I can send using a credit card?
PayPal sets transaction limits based on your account age and history, not on your payment method. However, your credit card issuer may have a separate cash advance limit that is lower than your credit limit. Check your card's terms or contact your issuer to find out your cash advance limit before attempting a large transfer.
Can I use a credit card to send money to a bank account instead of another PayPal account?
Yes. PayPal allows credit card transfers to both PayPal accounts and linked bank accounts. The fees are the same either way: PayPal charges 2.2% plus $0.30, and your card issuer charges a cash advance fee. The recipient's account type does not change the cost to you.