You can send money on PayPal with a credit card, but PayPal treats it differently than a bank transfer

Yes, you can link a credit card to your PayPal account and use it to send money to another person. However, PayPal charges a fee for credit card transfers that it does not charge for bank transfers. The fee is a percentage of the amount you send, and it varies depending on whether you are sending money domestically or internationally. If you send money to someone in the United States using a credit card, PayPal charges 2.2% of the amount plus $0.30. For international transfers, the fee is higher.

The reason PayPal charges more for credit card transfers is that credit card companies charge PayPal a processing fee every time a card is used. PayPal passes that cost to you. With a bank account or debit card linked to PayPal, PayPal's costs are lower, so the fee to you is lower or nonexistent.

Before you send money with a credit card on PayPal, understand that the transaction counts as a cash advance on some cards. This matters because cash advances typically carry a higher interest rate than regular purchases, and interest starts accruing immediately—there is no grace period like there is for purchases. Check your card's terms to see whether PayPal transfers are treated as cash advances.

Key Takeaways

  • PayPal charges 2.2% plus $0.30 for domestic credit card transfers, which is higher than the fee for bank account transfers.
  • Some credit card issuers classify PayPal transfers as cash advances, which means a higher interest rate and no grace period on interest.
  • You must link your credit card to your PayPal account before you can send money with it.
  • If you send money regularly, a bank account or debit card linked to PayPal will cost you less in fees than using a credit card.

How to link a credit card to PayPal and send money

Log into your PayPal account and go to your Wallet. Click "Link a card or bank" and enter your credit card number, expiration date, CVV, and billing address. PayPal will verify the card by making two small deposits to your bank account (if you have one linked) or by charging a small amount to the card itself, depending on your card issuer. Once verified, the card appears in your Wallet as an available payment method.

To send money, click "Send money" from your PayPal home page. Enter the recipient's email address or phone number, the amount, and select your linked credit card as the payment method. Review the fee PayPal shows you before you confirm. PayPal will then send the money to the recipient's PayPal account or, if they do not have one, PayPal will hold the money and send them a notification to claim it.

The recipient receives the money in their PayPal account within minutes, though it may take longer if PayPal flags the transaction for review. If the recipient wants to withdraw the money to their bank account, that withdrawal typically takes one to three business days depending on their bank.

Why credit card transfers cost more than other payment methods

PayPal's fee structure reflects what PayPal itself pays. When you link a bank account or debit card to PayPal, PayPal's cost to process the transaction is lower because banks charge PayPal less than credit card networks do. PayPal passes those savings to you by charging lower fees or no fee at all for bank transfers.

Credit card networks—Visa, Mastercard, American Express, and Discover—charge card issuers (and ultimately merchants and payment processors like PayPal) a percentage of every transaction plus a flat fee. This is called the interchange rate. PayPal has no way to avoid this cost, so it builds the fee into what it charges you.

If you are sending money to someone else, you are essentially asking PayPal to accept the credit card on your behalf and then pay the recipient. That is a service that costs PayPal money, and the fee you pay covers it. If you were to use your credit card directly with a merchant, the merchant would absorb that fee or pass it to you as a higher price. PayPal makes the fee explicit so you know what you are paying.

Check whether your card treats PayPal transfers as cash advances

Before you send money on PayPal with a credit card, call your card issuer or check your card's online account to see how it classifies PayPal transactions. Some issuers treat PayPal transfers as cash advances; others treat them as regular purchases. This distinction matters significantly for your costs.

A cash advance typically carries an interest rate 5 to 10 percentage points higher than your regular purchase APR. If your purchase rate is 18%, your cash advance rate might be 25% or higher. More importantly, interest on a cash advance starts accruing the moment you make the transaction—there is no grace period. With a regular purchase, you have a grace period (usually 21 days) before interest starts, as long as you pay your full balance by the due date.

If your card charges a cash advance fee in addition to the higher interest rate, that fee is typically 3% to 5% of the amount transferred. So if you send $500 and your card charges a 5% cash advance fee, you pay $25 just to make the transfer, plus interest starting immediately.

To avoid this, ask your issuer whether PayPal transfers are coded as cash advances on your specific card. If they are, use a bank account or debit card on PayPal instead, or consider whether sending money through PayPal is worth the cost at all.

Alternatives to sending money with a credit card on PayPal

If your credit card treats PayPal transfers as cash advances, or if the fees are too high, you have other options. The simplest is to link a bank account or debit card to PayPal instead. Bank transfers are free for domestic payments, and debit card transfers cost only 1.99% plus $0.99 for domestic payments—less than credit card transfers.

If you do not have a bank account or debit card, or if you want to keep your banking information off PayPal, consider other payment apps. Venmo, Square Cash, and Zelle all allow you to send money to other people, though each has different fee structures and features. Venmo and Square Cash charge no fee for bank transfers but charge a fee for credit card transfers. Zelle is free for most users but is only available through certain banks.

If you are sending money to someone internationally, PayPal's credit card fee is even higher than domestic transfers. In that case, services like Wise (formerly TransferWise) or OFX may offer better rates, especially for larger amounts. These services specialize in international transfers and often charge less than PayPal for cross-border payments.

What happens if PayPal flags your credit card transfer

PayPal reviews transactions for fraud and unusual activity. If PayPal flags your transfer, it may hold the money temporarily while it investigates. During this time, the money sits in PayPal's system and has not yet reached the recipient. PayPal will notify you if this happens and may ask you to confirm the transaction or provide additional information.

Flagged transactions usually clear within 24 hours, though some take longer. If PayPal suspects fraud, it may deny the transfer and return the money to your credit card. This can take several business days. To reduce the chance of being flagged, send money from a consistent location, use a consistent payment method, and avoid sending unusually large amounts to new recipients.

If your transfer is denied, PayPal will tell you why in your account. Common reasons include mismatched billing information, a card that has not been verified, or a recipient account that is new or has not been verified. You can usually resolve these issues by updating your information or waiting a few days before trying again.

Frequently Asked Questions

Does PayPal charge a fee if I send money with a credit card?

Yes. PayPal charges 2.2% of the amount plus $0.30 for domestic credit card transfers. International transfers cost more. Bank account transfers are free, and debit card transfers cost 1.99% plus $0.99. The fee appears on the PayPal screen before you confirm the transfer, so you can see the exact cost.

Will my credit card issuer charge me a cash advance fee for PayPal transfers?

It depends on your card and issuer. Some cards treat PayPal transfers as regular purchases; others treat them as cash advances. Cash advances carry a higher interest rate and may include a separate fee. Call your issuer or check your card's terms to find out how your card handles PayPal transactions before you send money.

How long does it take for money to arrive on PayPal when I send it with a credit card?

The money usually arrives in the recipient's PayPal account within minutes. If PayPal flags the transaction for review, it may take longer. Once the recipient has the money in PayPal, they can withdraw it to their bank account, which typically takes one to three business days.

Can I send money on PayPal with a credit card if I do not have a PayPal account yet?

No. You must create a PayPal account and link your credit card to it before you can send money. Creating an account is free and takes a few minutes. You will need an email address and your credit card information to get your free guide.

What should I do if PayPal denies my credit card transfer?

PayPal will tell you why the transfer was denied in your account. Common reasons include mismatched billing information, an unverified card, or a new recipient account. Update your information, verify your card if needed, and try again. If the problem persists, contact PayPal's support team for help.