Yes, you can send money on PayPal with a credit card, but PayPal treats it differently than a bank account
PayPal lets you link a credit card and use it to send money to other people. However, PayPal charges a fee for credit card transfers that it does not charge for bank account transfers. The fee is a percentage of the amount you send, plus a flat amount per transaction. This means sending money by credit card costs more than other methods PayPal offers.
The reason for the fee is straightforward: PayPal pays a processing cost to your credit card company every time you use your card through their system. They pass that cost to you. If you use a bank account or PayPal balance instead, PayPal's costs are lower, so they do not charge you a fee for sending money domestically.
Whether you should use a credit card depends on why you are sending the money and whether the fee is worth it to you. If you are earning cash back or points on the card, the reward might offset the fee. If you are sending money because you do not have a bank account linked yet, a bank account is cheaper in the long run.
Key Takeaways
- PayPal charges a fee when you send money using a credit card, but not when you send from a bank account or PayPal balance.
- The fee is a percentage of the amount plus a flat per-transaction charge, so larger transfers cost more in absolute dollars.
- You must have a credit card linked to your PayPal account before you can choose it as a payment method during a transfer.
- Credit card transfers are useful if you are earning rewards on the card and the cash back or points exceed the fee PayPal charges.
- International transfers by credit card have higher fees than domestic ones, so check the exact cost before sending money abroad.
How to link a credit card to your PayPal account
Before you can send money with a credit card, you need to add the card to your PayPal wallet. Log into your PayPal account on the website or app, go to your Wallet, and select "Link a card." Enter your card number, expiration date, CVV, and billing address. PayPal will verify the card by making two small deposits to your bank account (if the card is linked to one) or by asking you to confirm a code sent to your email.
Once the card is verified, it appears in your Wallet as an available payment method. You can link multiple cards if you want. PayPal stores the card information securely, so you do not have to enter it every time you send money.
The fee structure for credit card transfers
PayPal's fee for sending money by credit card is 2.2% of the amount you send, plus $0.30 per transaction. This applies to domestic transfers within the United States. If you send $100, the fee is $2.50 (2.2% of $100 plus $0.30). If you send $1,000, the fee is $22.30.
International transfers cost more. The fee is 4.4% of the amount plus $1.00 per transaction. Geography matters here: some countries have different fee structures, and some countries are not supported at all. Before you send money internationally, PayPal shows you the exact fee so you can decide whether to proceed.
These fees apply only when you choose a credit card as your payment method. If you send money from your PayPal balance or a linked bank account, there is no fee for domestic transfers. This is why most people use a bank account or balance when they can.
When sending by credit card makes financial sense
The main reason to use a credit card for PayPal transfers is if you earn rewards on that card and the rewards exceed the fee. If your card gives you 2% cash back on all purchases, and you send $500, you earn $10 in cash back but pay $11.30 in fees — a net loss of $1.30. However, if your card gives you 3% cash back, you earn $15 and pay $11.30, netting $3.70 in your favor.
Another reason is if you do not yet have a bank account linked to PayPal and need to send money urgently. Linking a bank account takes a few days to verify, but a credit card can be verified in minutes. In that case, the fee is the cost of speed.
A third scenario is if you are using a 0% introductory APR card and want to build a balance on it for another reason (like a larger purchase you are planning). Sending money through PayPal counts as a transaction on the card, so it uses the introductory rate. However, this only makes sense if you have a genuine reason to carry a balance; otherwise, you are paying a fee to move money around.
How to choose your payment method when sending money
When you initiate a transfer on PayPal, you see a screen that asks which account or card you want to use. Your linked bank account and PayPal balance appear first, usually with a note that there is no fee. Your linked credit cards appear below, with the fee amount shown next to each one.
PayPal defaults to your bank account or balance if one is available. If you want to use a credit card instead, you have to click on it explicitly. The fee is always shown before you confirm the transfer, so you can change your mind if the cost is higher than you expected.
If you have multiple credit cards linked, you can choose which one to use. This is useful if one card earns higher rewards than another, or if one has a lower interest rate.
Credit card transfers versus other PayPal payment methods
| Payment Method | Domestic Fee | International Fee | Verification Time |
|---|---|---|---|
| Bank account | None | None | 2–3 days |
| PayPal balance | None | None | Instant (if balance exists) |
| Credit card | 2.2% + $0.30 | 4.4% + $1.00 | Minutes |
| Debit card | 2.2% + $0.30 | 4.4% + $1.00 | Minutes |
Bank accounts and PayPal balances are the cheapest options because PayPal does not charge a fee. If you have time to wait for verification, linking a bank account is the best long-term choice. If you need to send money immediately and do not have a balance, a credit card is faster than waiting for a bank account to verify, but you pay for that speed.
Debit cards carry the same fee as credit cards, so there is no advantage to using one over the other from a cost perspective. The choice between them depends on your rewards program and which card you want to use.
What happens after you send money by credit card
When you send money using a credit card, the transaction appears on your credit card statement as a charge from PayPal. The amount includes the fee. So if you send $100 with a 2.2% + $0.30 fee, your card is charged $102.50.
The recipient receives the full $100 — the fee does not come out of what they get. PayPal keeps the fee. The transfer usually reaches the recipient's PayPal account within minutes, though it can take up to 24 hours in some cases.
The charge on your credit card statement counts toward your credit utilization ratio, which affects your credit score. If you send a large amount, it temporarily increases your balance and can lower your score slightly. Once you pay the card off, the utilization drops and your score recovers.
Frequently Asked Questions
Does PayPal charge a fee if I send money to a friend?
PayPal does not charge a fee if you send money to a friend using a bank account or PayPal balance, even if you label it as a personal transfer. However, if you use a credit card, the fee applies regardless of whether the recipient is a friend or a business. The fee structure is the same: 2.2% plus $0.30 domestically.
Can I use a credit card to send money internationally on PayPal?
Yes, but the fee is higher. International transfers by credit card cost 4.4% of the amount plus $1.00 per transaction. Some countries are not supported, so PayPal will tell you before you complete the transfer whether the destination is available. Check the exact fee for your specific country before proceeding.
What if I do not have a bank account to link to PayPal?
You can use a credit card or debit card instead. Both carry the same fee structure. If you plan to send money regularly, opening a bank account and linking it to PayPal is cheaper in the long run, even if it takes a few days to verify. If you only send money occasionally, the credit card fee may be acceptable.
Does the credit card fee count toward my cash back rewards?
Yes. The entire charge, including the fee, counts as a transaction on your card and earns rewards at your card's normal rate. If your card gives 2% cash back, you earn 2% on the full amount you are charged, including the PayPal fee. This is why the math matters: you need your rewards rate to exceed the fee for it to be worthwhile.
Can I dispute a PayPal transfer made by credit card?
You can contact PayPal to dispute the transfer, but your stronger protection is through your credit card company. If PayPal does not resolve the dispute, you can file a chargeback with your card issuer. Credit card companies have stronger consumer protections than PayPal does, so disputing through your card is often more effective than disputing through PayPal alone.