PayPal charges different fees depending on how you use your credit card
PayPal itself does not charge you a fee straightforward for linking a credit card to your account. However, PayPal does charge fees when you use your credit card to send money to other people, and your credit card company may charge you a separate fee for the cash advance if PayPal treats the transaction that way. The amount you pay depends on whether you are sending money domestically or internationally, and whether the recipient is a friend or a business.
If you are receiving money through PayPal and the sender pays with a credit card, you will see a fee deducted from what lands in your account — but that fee comes out of the sender's choice to use a credit card, not from you directly.
Key Takeaways
- Sending money to friends using a credit card costs 2.2% plus $0.30 per transaction in the United States, while sending to businesses costs the same percentage but applies to the full amount.
- International transfers with a credit card carry higher fees that vary by country, typically ranging from 3.49% to 4.99% plus a fixed amount.
- Your credit card company may treat PayPal transfers as cash advances and charge you an additional fee and interest, even though PayPal does not label them that way.
- Receiving money through PayPal when someone pays with a credit card results in a fee that reduces your payout, but you have no control over whether the sender chooses that payment method.
- Using a bank account or debit card instead of a credit card to send money through PayPal typically costs less or nothing, depending on the transaction type.
Fees for sending money with a credit card
When you send money from your PayPal account using a linked credit card, PayPal charges a percentage of the amount plus a flat fee. For sending money to friends and family within the United States, the fee is 2.2% of the amount plus $0.30. If you are sending money to a business or paying for goods and services, the fee is 2.2% plus $0.30 as well, but it applies to the full transaction amount rather than being capped.
For international transfers using a credit card, the fees are higher. PayPal charges between 3.49% and 4.99% depending on the destination country, plus a fixed amount that also varies by country. These fees are added on top of any currency conversion fees if you are sending money in a different currency than your PayPal account balance.
The fee is deducted from the money you send, so if you send $100 to a friend, PayPal takes $2.30 and your friend receives $97.70. You see this breakdown before you confirm the transaction, so you know the exact cost before committing.
What your credit card company might charge
Beyond PayPal's fees, your credit card issuer may treat a PayPal transfer as a cash advance rather than a regular purchase. Cash advances typically carry a higher interest rate than regular purchases — often 25% or more — and begin accruing interest when ready with no grace period. Your card issuer may also charge a cash advance fee, usually 3% to 5% of the amount transferred.
Whether PayPal transfers trigger cash advance fees depends on your specific credit card and your card issuer's policies. Some issuers treat PayPal transfers as regular purchases, while others classify them as cash advances. The only way to know for certain is to contact your card issuer directly and ask how they categorize PayPal transfers. If they do treat them as cash advances, using a debit card or bank account through PayPal instead will avoid this additional cost.
Fees when you receive money via credit card
If someone sends you money through PayPal and they choose to pay with a credit card, PayPal deducts a fee from what you receive. The fee structure is the same as what the sender pays: 2.2% plus $0.30 for domestic transfers between friends, or 2.2% plus $0.30 for goods and services transactions. For international transfers, the fee ranges from 3.49% to 4.99% depending on the destination.
You cannot prevent this fee or negotiate it — it is PayPal's standard charge when a credit card is the payment method. The sender could reduce your payout by choosing a different payment method, but you have no control over their choice. PayPal shows you the fee amount before you accept the transfer, so you can see exactly how much will land in your account.
How to avoid credit card fees on PayPal
The simplest way to avoid PayPal's credit card fees is to link a bank account or debit card instead. Sending money to friends and family from a bank account costs nothing in the United States. Sending money for goods and services from a bank account costs 1.49% plus $0.49, which is lower than the credit card rate.
If you must use a credit card, compare the PayPal fee against the cost of alternatives. A wire transfer through your bank might cost $15 to $30 but could be cheaper than PayPal's percentage fee on a large transfer. A peer-to-peer payment app like Venmo or Square Cash may also offer lower fees or no fees for certain transaction types, depending on your situation.
For receiving money, you cannot control whether the sender uses a credit card, but you can ask them to use a different payment method if the fee matters to you. Many senders do not realize that choosing a credit card reduces what you receive, so a straightforward conversation can sometimes solve the problem.
Credit card rewards and PayPal transfers
Even though PayPal charges you a fee to send money with a credit card, you may still earn rewards points or cash back on the transaction through your credit card's rewards program. Whether you earn rewards depends on your specific card and your card issuer's rules — some cards exclude PayPal transfers from earning rewards, while others treat them like any other purchase.
In rare cases, the rewards you earn might offset part or all of PayPal's fee. For example, if your card offers 2% cash back and PayPal charges 2.2%, the net cost is only 0.2% plus the $0.30 flat fee. However, this only works if your card issuer actually awards rewards on PayPal transfers, so check your card's terms before counting on it.
Frequently Asked Questions
Does PayPal charge a fee just for having a credit card linked?
No. Linking a credit card to PayPal is free. You only pay a fee when you actually use that credit card to send money or when someone sends you money and chooses to pay with a credit card.
Why is my credit card charging me extra on top of PayPal's fee?
Your card issuer may be treating the PayPal transfer as a cash advance, which carries a separate fee and higher interest rate. Contact your card company to ask how they categorize PayPal transfers, and consider using a bank account or debit card instead if they do charge cash advance fees.
Can I get PayPal to refund the credit card fee?
PayPal does not refund transaction fees once the transfer is complete. However, if you believe the fee was charged in error or the transfer failed, you can contact PayPal's support team to review the transaction.
Is it cheaper to send money through PayPal or my bank?
For small domestic transfers to friends, PayPal's bank account option is free and beats any bank wire fee. For larger amounts or international transfers, compare PayPal's percentage fee against your bank's flat wire fee to see which costs less in your specific situation.
Do I earn credit card rewards on PayPal transfers?
It depends on your card issuer. Some cards exclude PayPal transfers from rewards, while others treat them as regular purchases. Check your card's terms or call your issuer to confirm whether you earn rewards on PayPal transactions.