PayPal lets you send money with a credit card, but the method depends on whether you have a PayPal account
You can send money through PayPal using a credit card in two ways. If you have a PayPal account, you link your credit card to it and send money directly to another person's email or phone number. If you don't have an account, you can use PayPal's guest checkout feature to send a one-time payment without creating an account first. The key difference is that linked cards give you a permanent way to send money repeatedly, while guest payments are faster but one-off.
PayPal treats credit card payments differently than debit card or bank account payments. When you use a credit card, PayPal classifies the transaction as a cash advance or purchase depending on how you send the money, and this affects whether you pay fees and how your credit card company reports it to your credit report.
Key Takeaways
- Sending money to friends and family through PayPal with a linked credit card usually has no fee, but sending to a business or goods/services triggers a fee of around 2.9% plus $0.30.
- Your credit card company may treat PayPal credit card payments as cash advances, which carry higher interest rates and start accruing interest when ready, not after a grace period.
- You can send money as a guest without a PayPal account, but you'll need to enter your credit card details each time and may face higher fees.
- PayPal's money transfer feature is different from using PayPal Checkout to pay for something — the first sends money to a person, the second pays a business for goods or services.
Linking a credit card to your PayPal account
To link a credit card to PayPal, log into your account, go to Wallet, and select "Link a card." You'll enter your card number, expiration date, CVV, and billing address. PayPal will make two small deposits to your bank account (if you've linked one) or charge two small amounts to your card to verify it's real. Once verified, the card stays linked and you can use it to send money anytime.
After your card is linked, you send money by clicking "Send Money," entering the recipient's email or phone number, choosing the amount, and selecting "Friends and Family" or "Goods and Services." If you choose "Friends and Family," there's no fee. If you choose "Goods and Services," PayPal charges a fee — typically 2.9% of the amount plus $0.30 — and this fee comes out of what you send.
How credit card companies treat PayPal transfers
This is where credit card payments through PayPal get complicated. Your credit card company may classify a PayPal transfer as a cash advance rather than a regular purchase. A cash advance means you're borrowing money against your credit limit, and it carries consequences: the interest rate is usually higher than your regular purchase rate, interest starts accruing when ready (no grace period), and your card company may charge an upfront cash advance fee of 3% to 5% of the amount.
Not all credit card companies treat PayPal the same way. Some classify it as a purchase, others as a cash advance, and some let you choose. The best way to know is to call your card issuer and ask: "If I use my card on PayPal to send money to another person, will you treat it as a cash advance or a purchase?" Write down the answer and the date you called. If your card does treat it as a cash advance, you may want to use a debit card or bank account linked to PayPal instead.
Sending money as a guest without a PayPal account
If you don't want to create a PayPal account, you can send money through PayPal's guest checkout. Go to paypal.com, click "Send Money," enter the recipient's email or phone number and the amount, and PayPal will ask for your credit card details. You enter your card information, confirm the payment, and the money goes through without you having an account.
Guest payments are faster to set up but have drawbacks. You'll enter your card details every time you send money, which is less convenient if you send money regularly. Guest payments may also carry higher fees than account-based payments, and you won't have a record of your transactions in a PayPal account history. If there's a dispute, you'll have fewer tools to resolve it.
Fees and costs you should know about
PayPal's fee structure depends on why you're sending money. Sending to friends and family has no fee from PayPal itself, but your credit card company may charge a cash advance fee if it classifies the transfer that way. Sending for goods or services costs 2.9% plus $0.30, taken from the amount you send — so if you send $100, the recipient gets $96.81.
International transfers cost more. If you're sending money outside the United States, PayPal charges an additional fee that varies by country, usually 1% to 4% on top of the base fee. Your credit card company may also charge a foreign transaction fee of 1% to 3%. Before you send money internationally, ask PayPal what the total cost will be for that specific country.
When PayPal credit card payments make sense
Using a credit card on PayPal works best when you're sending money to friends or family and your credit card company treats it as a purchase, not a cash advance. In that case, you get the convenience of PayPal's platform, you build your credit history (purchases show up on your credit report, cash advances usually don't), and you avoid the cash advance interest rate.
It makes less sense if your card treats PayPal as a cash advance. In that situation, you'd pay a cash advance fee upfront, a higher interest rate, and interest starts accruing when ready. You'd be better off linking a debit card or bank account to PayPal instead. If you don't have either, consider whether you really need to send the money through PayPal or whether a direct bank transfer, Venmo, or another app would be cheaper.
Alternatives to sending money through PayPal with a credit card
If your credit card company charges cash advance fees or high interest rates for PayPal transfers, you have other options. Linking a debit card to PayPal avoids the cash advance problem entirely — debit cards are treated as purchases, not cash advances, and you're spending money you already have. Linking a bank account is even cheaper; PayPal charges no fee for bank transfers to friends and family, and your bank won't charge a cash advance fee.
Apps like Venmo, Square Cash, and Zelle also let you send money to other people, usually with no fee if you link a bank account or debit card. These apps are often faster than PayPal and don't trigger cash advance classifications. The trade-off is that they work only within the United States and only between individuals, not for business payments. If you're sending money internationally or paying a business, PayPal is still your best option — just make sure you understand what your credit card company will charge.
Frequently Asked Questions
Will sending money on PayPal with my credit card hurt my credit score?
Not directly. PayPal transfers don't show up on your credit report as a separate transaction. However, if your credit card company treats the transfer as a cash advance, it may lower your available credit and increase your credit utilization ratio, which can temporarily lower your score. Paying off the balance quickly minimizes this effect.
Can I use a credit card to send money on PayPal if I don't have a PayPal account?
Yes. Use PayPal's guest checkout feature at paypal.com. Enter the recipient's email or phone number, the amount, and your credit card details. You won't need to create an account, but you also won't have a record of the transaction saved in PayPal.
What's the difference between sending money to "Friends and Family" versus "Goods and Services"?
"Friends and Family" has no PayPal fee and is meant for personal transfers. "Goods and Services" charges a fee and is meant for business transactions or when you're paying for something. Misusing the category can get your account flagged, so use the correct one for your situation.
Why is PayPal charging me a cash advance fee on my credit card?
Your credit card company is treating the PayPal transfer as a cash advance, not a purchase. Call your card issuer to confirm this is happening, and ask whether you can link a debit card or bank account to PayPal instead. If you must use a credit card, ask if a different card you own has a lower cash advance fee.
Is it cheaper to send money through PayPal or through my bank?
It depends on the type of transfer. For domestic transfers to friends and family, PayPal with a bank account or debit card is free. Your bank may charge $15 to $30 for a wire transfer. For international transfers, PayPal and banks both charge fees that vary by country — compare the total cost before you choose.