PayPal accepts credit cards, but how you use them depends on whether you're the one paying or the one getting paid

Yes, PayPal accepts credit cards. You can link a Visa, Mastercard, American Express, or Discover card to your PayPal account and use it to send money or make purchases through PayPal's platform. However, PayPal charges a fee when you pay with a credit card — typically 2.2% plus $0.30 per transaction for personal transfers, or higher rates for business payments. If you link a debit card or bank account instead, you avoid this fee.

The catch is that PayPal treats credit card payments differently depending on what you're doing. If you're sending money to a friend or family member, you'll pay that fee. If you're buying something from a merchant who accepts PayPal, the merchant pays the fee, not you — so your cost is the same whether you use a credit card, debit card, or bank account. If you're a seller accepting PayPal payments, you cannot require customers to pay the credit card fee; PayPal's rules prohibit passing it along.

Key Takeaways

  • PayPal accepts all major credit cards (Visa, Mastercard, American Express, Discover) when you link them to your account through the Wallet section.
  • Personal transfers to friends using a credit card cost 2.2% plus $0.30, while debit cards and bank accounts have no fee for personal transfers.
  • When you buy from a merchant through PayPal, the merchant pays the processing fee regardless of which payment method you choose.
  • PayPal will not let you use a credit card to fund a PayPal Cash or PayPal Cash Plus account balance directly.

How to add a credit card to your PayPal account

Open PayPal on a web browser or the mobile app and go to your Wallet. Select "Link a card" or "Add a card," then 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 you're linking a debit card) or by asking you to confirm a code sent to your email or phone (for credit cards). This verification usually takes one to two business days.

Once the card is linked, you can choose it as your payment method when you send money or make a purchase. PayPal stores the card information on its servers, so you do not have to enter it every time. You can link multiple cards and switch between them. If you want to remove a card, go back to your Wallet, find the card, and select "Unlink."

Why PayPal charges a fee for credit card transfers

PayPal charges 2.2% plus $0.30 for personal transfers funded by credit card because credit card networks (Visa, Mastercard, American Express, Discover) charge PayPal an interchange fee for processing the transaction. PayPal passes most of that cost to you when you choose to pay with a credit card. This is why PayPal encourages you to link a bank account or debit card instead — those payment methods cost PayPal less to process, so there is no fee to you.

The fee structure is the same whether you are sending $10 or $1,000. A $100 transfer costs $2.20 plus $0.30, totaling $2.50. For small amounts, this fee can be significant — a $20 transfer costs $0.74. PayPal does not charge a fee if you use a bank account or debit card for personal transfers, so linking one of those methods first can save you money.

Credit cards and PayPal purchases from merchants

When you buy something from a store or website that accepts PayPal, you can choose a credit card as your payment method. PayPal will not charge you a fee — the merchant pays PayPal's processing fee instead. This is true whether you use a credit card, debit card, or bank account. From your perspective, the cost is the same.

This is one reason some people prefer to pay with a credit card through PayPal: you get the same price as you would with any other payment method, but you also earn credit card rewards (cash back, points, or miles) on the purchase. The credit card company still reports the transaction to the credit bureaus, so it counts toward your credit history the same way a regular credit card purchase does.

Credit cards and PayPal Cash accounts

PayPal Cash and PayPal Cash Plus are accounts that hold a balance you can spend or withdraw. You cannot fund these accounts directly with a credit card. PayPal only allows you to add money to a Cash account using a bank account, debit card, or by transferring money from your PayPal balance. If you try to link a credit card as a funding source for your Cash balance, PayPal will reject it.

The reason is that allowing credit card funding would let people use PayPal as a cash advance service, which would violate credit card company rules and expose PayPal to regulatory risk. If you want to move money into a PayPal Cash account, link your bank account or debit card instead.

What happens if your credit card expires or is declined

If a credit card linked to your PayPal account expires, PayPal will not automatically charge it. Instead, if you try to use it for a payment, PayPal will tell you the card is expired and ask you to update it or choose a different payment method. You can update the expiration date and CVV in your Wallet without unlinking and relinking the card.

If a payment is declined — because the card is maxed out, the transaction looks fraudulent, or the card issuer blocks it — PayPal will notify you and ask you to try a different payment method. PayPal does not retry declined transactions automatically. If you are expecting a refund or a payment from someone else and it fails, PayPal will hold the money and ask the sender to choose a different method or try again.

Credit cards and PayPal seller accounts

If you use PayPal to receive payments as a seller or freelancer, you cannot charge customers extra to use a credit card. PayPal's terms prohibit surcharges for credit card payments. You can offer a discount for paying with a bank transfer or debit card, but you cannot pass the credit card processing fee to the buyer. PayPal charges you (the seller) a processing fee of 2.2% plus $0.30 for each transaction, regardless of which payment method the customer uses.

Some sellers try to work around this by asking customers to pay with a debit card or bank transfer to "save money," which is allowed. But explicitly charging more for credit card payments violates PayPal's agreement and can result in account suspension.

Frequently Asked Questions

Can I use a credit card to send money to someone outside the US?

Yes, but the fee is higher for international transfers. PayPal charges 4.99% plus a fixed fee (which varies by country) when you send money internationally using a credit card. Bank accounts and debit cards have lower international fees. Check PayPal's current rates before you send.

Does PayPal report credit card payments to credit bureaus?

No. PayPal does not report your payment activity to the credit bureaus. However, your credit card company does report the transaction to the bureaus as a regular credit card purchase, just like any other merchant would.

What if PayPal declines my credit card?

PayPal may decline a card if it fails verification, if the billing address does not match the card issuer's records, or if PayPal's fraud detection flags it. Try unlinking the card and linking it again, or contact your credit card company to make sure they have not blocked PayPal transactions. Some card issuers require you to notify them before using the card online.

Can I use a prepaid credit card with PayPal?

Yes, most prepaid cards work with PayPal as long as they are issued by Visa, Mastercard, American Express, or Discover and have a billing address associated with them. Some prepaid cards do not support online verification, so PayPal may ask you to confirm a code instead. Check your prepaid card's terms to see if it allows online purchases.