PayPal charges different fees depending on how you use it
PayPal does not charge you a fee straightforward for linking a credit card to your account. However, PayPal charges fees when you send money to other people using a credit card, when you receive payments as a business, and when you use certain features. The fee structure depends on whether you are sending money to friends, running a business, or receiving international payments.
If you link a credit card and use it to pay for something on a website that accepts PayPal, you typically pay no extra fee — the merchant pays PayPal instead. But if you use PayPal's money transfer feature and choose to fund the transfer with a credit card, PayPal charges you a fee on top of the amount you send.
Key Takeaways
- Sending money to friends or family using a credit card costs 2.2% of the amount plus $0.30, while sending from a bank account or PayPal balance is free.
- Receiving payments as a business through PayPal costs 2.29% plus $0.30 per transaction, regardless of whether the payer used a credit card.
- International transfers have higher fees that vary by country and payment method, typically ranging from 3% to 4.99% plus a fixed amount.
- Paying for purchases on websites that accept PayPal does not trigger an additional PayPal fee because the merchant covers the cost.
- PayPal's fee structure changes based on your account type and the type of transaction, so checking your specific situation before sending money saves you from surprises.
Sending money to friends and family with a credit card
When you send money through PayPal's "Send Money" feature to another person and choose to fund it with a credit card, PayPal charges 2.2% of the amount plus $0.30. This is PayPal's standard fee for credit card-funded transfers within the United States.
If you send the same money from your PayPal balance or a linked bank account instead, there is no fee. This is why many people keep a small balance in their PayPal account — it lets them send money to friends without paying a percentage. The fee applies to the total amount you send, so sending $100 costs $2.50, and sending $500 costs $11.30.
Receiving payments as a business
If you use PayPal to receive payments for goods or services, PayPal charges you 2.29% of the transaction amount plus $0.30 per payment. This fee applies whether the person paying you used a credit card, debit card, or bank account — you pay the same rate regardless.
This is PayPal's standard rate for most small businesses and freelancers in the United States. The fee comes out of what you receive, so if someone pays you $100, you get $97.41. Some PayPal account types, such as PayPal Commerce Platform or higher-volume merchant accounts, may have different rates, but the standard rate for most people is 2.29% plus $0.30.
International transfers and cross-border payments
Sending money internationally through PayPal costs more than domestic transfers. The fee depends on which country you are sending to and which payment method you use. International transfers typically cost between 3% and 4.99% of the amount plus a fixed fee that ranges from $0.99 to $4.99.
For example, sending money to Canada might cost 3.99% plus $1.99, while sending to some other countries could cost 4.99% plus $4.99. PayPal's website shows you the exact fee before you confirm the transfer, so you can see the total cost before committing. If you send money internationally often, comparing PayPal's rate to other services like Wise or OFX may save you money.
Using PayPal to pay for online purchases
When you use PayPal to pay for something on a website or app that accepts PayPal, you do not pay PayPal an extra fee. The merchant who is selling you the item pays PayPal a fee, not you. Your cost is whatever the item costs — nothing more.
This is true whether you fund the PayPal payment with a credit card, debit card, or your PayPal balance. PayPal's fee is built into the merchant's cost of doing business, not passed on to you as the buyer. This is one reason PayPal is convenient for shopping — you get buyer protection without paying extra.
PayPal Credit and PayPal Key fees
PayPal offers a credit product called PayPal Credit that works like a line of credit. If you use PayPal Credit to make a purchase, you do not pay PayPal a transaction fee, but you may pay interest on the balance depending on the terms of your purchase. PayPal Credit charges interest only if you do not pay off the full balance within the promotional period (often 6 months for larger purchases).
PayPal Key is a virtual card number feature that lets you use PayPal at any online store. Using PayPal Key to pay does not trigger an extra fee from PayPal — again, the merchant covers PayPal's cost. Interest may explore if you use PayPal Credit as the funding source and carry a balance.
Avoiding unnecessary PayPal fees
The easiest way to avoid PayPal fees is to use your PayPal balance or a linked bank account instead of a credit card when sending money to friends. If you do not have a PayPal balance, transfer money from your bank account to PayPal first (this is free), then send it to your friend with no fee.
If you receive payments regularly, the 2.29% plus $0.30 fee is a cost of accepting PayPal, but you cannot avoid it — it applies to all incoming payments. However, you can factor this into your pricing. If you are a freelancer or small business owner, many people expect to pay PayPal fees as part of working with you, so you can build the cost into your rates.
Before sending a large amount of money internationally, check PayPal's fee for that specific country. Sometimes a wire transfer through your bank or a service like Wise costs less, especially for amounts over $1,000.
Frequently Asked Questions
Does PayPal charge a fee if I link my credit card but do not use it?
No. Linking a credit card to PayPal costs nothing. You only pay a fee when you actually use the credit card to send money through PayPal or when you receive a payment as a business (and that fee applies regardless of how the payer funded it).
Why does PayPal charge more for credit card transfers than bank account transfers?
PayPal charges credit card companies a higher processing fee than banks charge for ACH transfers. PayPal passes that higher cost on to you when you choose to fund a transfer with a credit card. Using your bank account or PayPal balance costs PayPal less, so they do not charge you a fee.
Can I avoid the 2.29% fee if I receive payments through PayPal?
No. The 2.29% plus $0.30 fee applies to all payments received through PayPal's standard merchant services. Some specialized PayPal products have different rates, but you cannot avoid the fee for regular business payments.
Does PayPal charge a fee if someone pays me with a debit card instead of a credit card?
No. You pay the same 2.29% plus $0.30 fee regardless of whether the person paying you used a credit card, debit card, or bank account. The fee is based on the transaction, not the payment method the other person chose.
What is the cheapest way to send money internationally through PayPal?
Use your PayPal balance or a linked bank account if PayPal offers that option for your destination country. If you must use a credit card, expect to pay 3% to 4.99% plus a fixed fee. For large international transfers, compare PayPal's rate to Wise or your bank's wire transfer rate first.