PayPal accepts credit cards, but the way you use them depends on whether you're sending money or receiving it

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, pay for purchases online, or add funds to your PayPal balance. However, PayPal treats credit card payments differently depending on what you're doing — and fees apply in some situations but not others.

The key difference: if you're using a credit card to pay someone through PayPal, you'll usually pay a fee. If you're using it to receive money as a business, the rules are different. Understanding which scenario applies to you matters, because it changes what you'll actually owe.

Key Takeaways

  • You can link any major credit card (Visa, Mastercard, American Express, Discover) to PayPal by entering the card number, expiration date, and CVV in your account settings.
  • Sending money to another person using a credit card costs 2.2% of the amount plus $0.30, while using a bank account or PayPal balance is free.
  • Paying for online purchases with a linked credit card through PayPal does not add extra fees beyond what the merchant charges.
  • If you receive money as a business and accept credit card payments, PayPal charges you a fee — but you control whether customers can pay with credit cards.

How to add a credit card to your PayPal account

Log into your PayPal account and go to Wallet (or My Money on older accounts). Select Link a card and choose Credit card. Enter your card number, expiration date, CVV (the three-digit security code on the back), and billing address. PayPal will verify the card by charging a small temporary amount — usually under $1 — which it refunds within a few days.

Once verified, the card appears in your Wallet and is ready to use. You can link multiple cards to the same account. If you want to remove a card later, go back to Wallet, find the card, and select Remove. Removing a card does not affect past transactions.

Fees when you send money using a credit card

If you send money to another person through PayPal using a credit card, PayPal charges you 2.2% of the amount plus $0.30. This fee goes to PayPal, not to the person receiving the money — they get the full amount you specify. For example, sending $100 costs you $2.50 total ($2.20 plus $0.30).

You can avoid this fee by sending money from your PayPal balance or a linked bank account instead. If you don't have a PayPal balance, you can add funds from your bank account for free, then send from that balance. This takes an extra step but saves money if you're sending regularly.

Using a credit card to pay for online purchases

When you use PayPal to pay for something online — at a store, restaurant, or service provider — you can choose to pay with your linked credit card. PayPal does not add an extra fee on top of what the merchant charges. You pay only what the merchant's price is, just as you would if you entered your credit card directly on their website.

The advantage of using PayPal instead of entering your card directly is that the merchant never sees your full card number. PayPal gives them a token instead, which is more secure. Your credit card company may also offer purchase protection or rewards for the transaction — check your card's terms to see what applies.

Credit card payments when you receive money as a business

If you have a PayPal Business account and accept payments from customers, you can allow them to pay with credit cards. When a customer pays you with a credit card through PayPal, PayPal charges you a fee: 2.2% of the transaction plus $0.30 for domestic transactions, or higher for international payments.

You control whether customers can pay with credit cards. In your account settings under Payment Preferences, you can turn credit card payments on or off. Some business owners turn them off to reduce fees, though this may discourage some customers from completing a purchase. Bank transfers and PayPal balance transfers have lower or no fees, so you might encourage those methods 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, the card becomes inactive in your Wallet. 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.

If a payment is declined — because the card is maxed out, reported stolen, or for another reason — PayPal will show you an error message and the transaction will not go through. You can try a different card, use your PayPal balance, or contact your credit card company to find out why the charge was declined. PayPal does not retry declined payments automatically.

Security and fraud protection

PayPal encrypts your credit card information and does not store the full card number on its servers in a way that merchants can access. When you use PayPal to pay, the merchant receives a token — a temporary code — instead of your actual card details. This reduces the risk that a data breach at a store will expose your card number.

If you notice an unauthorized transaction, report it to PayPal through your account under Resolution Center. PayPal has a dispute process and may refund you while it investigates. You can also report fraud to your credit card company directly; they have their own dispute process and may offer additional protection depending on your card's terms.

Frequently Asked Questions

Can I use a prepaid credit card with PayPal?

Yes, most prepaid cards work with PayPal as long as they have a Visa, Mastercard, American Express, or Discover logo. Link it the same way you would a regular credit card. Some prepaid cards have restrictions or require activation before PayPal can verify them — check your card's terms if verification fails.

Does PayPal charge a fee if I use a credit card to add money to my balance?

Yes. Adding funds to your PayPal balance using a credit card costs 2.2% of the amount plus $0.30. Adding funds from a bank account is free. If you plan to send money later, adding from your bank account first, then sending from your balance, saves money.

What's the difference between sending money and paying for a purchase?

Sending money to a person (through PayPal's "Send Money" feature) charges a fee when you use a credit card. Paying for a purchase at a store or website does not add a PayPal fee — you pay only what the merchant charges. The merchant controls whether they accept PayPal.

Can I use a business credit card with PayPal?

Yes, business credit cards work the same way as personal cards. Link it to your account and use it to send money or pay for purchases. The 2.2% plus $0.30 fee still applies if you send money to another person.

What if PayPal asks me to verify my credit card again?

PayPal may ask you to re-verify a card if you haven't used it in a long time, if there's suspicious activity, or if you change your account information. Go to your Wallet, select the card, and follow the verification steps. PayPal will charge a small temporary amount and refund it within a few days.