Boost your rewards by using PayPal with your credit cards

Mar 24, 2020

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Using PayPal doesn’t mean you can’t earn credit card rewards along the way. Several card issuers offer bonuses for using their cards with PayPal. And, PayPal offers its own branded cards that allow cardholders to earn cash back or points that can be redeemed for gift cards and travel vouchers. TPG takes a look on how you can maximize your credit card rewards when using PayPal.

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In This Post

Do I earn rewards using my credit card on PayPal?

(Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images)
(Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images)

Using your credit card to earn rewards with PayPal is easy. Just link your card to your PayPal account at the website and select the card when making payments. You’ll earn rewards as you would with any other purchase. Several major retailers accept PayPal payments in-store and online including, Best Buy, Bed Bath & Beyond, Etsy, Brookstone, Home Depot and IKEA.

PayPal users can add multiple cards to their accounts, making it easy to rack up rewards from a number of programs at once. Any Visa, Mastercard, Discover or American Express card with a registered billing address can be used with PayPal.

Best credit cards to use with PayPal

Sometimes you’ll be able to earn more by using your credit card in conjunction with PayPal. Issuers like Chase, Citibank and Discover have offered bonus rewards promotions on PayPal payments in the past year.

Discover made PayPal a 5% cash back category for Discover it Cash Back holders from June through September in 2019.

Related reading: Discover adds extra 5% cash back categories at PayPal, Target and Walmart

Like the Discover it Cash Back card, the Chase Freedom card offers 5% cash back in select rotating quarterly bonus categories (on the first $1,500 in purchases each quarter you activate). Last year, it made PayPal one of those categories.

Typically, non-bonus categories earn 1% cash back with the Chase Freedom card.

The information for the Chase Freedom has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

Last summer, Citi offered some cardholders a $20 statement credit for spending $120 on PayPal purchases.

Both Discover and Chase make it easy to pay with rewards when checking out with PayPal.

Related reading: Why earning 5x points while sitting on the couch is extremely easy this quarter

Branded PayPal credit cards

PayPal offers two branded credit card options: A cash back Mastercard and a rewards Mastercard. PayPal credit cards are issued by Synchrony Bank.

(Photo by Eric Helgas for The Points Guy)
(Photo by Eric Helgas for The Points Guy)

PayPal’s Cashback Mastercard awards 2% cash back on all purchases and doesn’t charge an annual fee. To apply for the card, you must have a PayPal account.

(Photo by John Gribben for The Points Guy)
(Photo by John Gribben for The Points Guy)

The PayPal Extras Mastercard awards 3 points per dollar spent at gas stations and restaurants, and 2 points per dollar on PayPal and Ebay purchases. Other purchases earn 1 point per dollar spent. Points can be redeemed for gift cards, travel vouchers and cash back.

Does PayPal or my bank charge a fee for using a credit card?

PayPal doesn’t charge a fee on credit card payments for goods and services, but it charges a 2.9% fee on money sent to friends or family members. PayPal payments aren’t cash advances. They’re treated like retail transactions and shouldn’t incur additional bank fees.

Can I send money with my credit card?

You can use your PayPal-linked credit card to send money to family and friends. PayPal charges a 2.9% fee plus 30 cents for the service.

Is using your credit card on PayPal a cash advance?

Payments made through PayPal aren’t considered cash advances, so you shouldn’t expect a fee or cash advance APR on the transaction from your bank.

Payments through PayPal could even make you money if you’re using a card whose bonus is larger than the fee you’d pay to PayPal.

Is PayPal safe?

PayPal has been around since 2002 and is generally safe to use, especially if you are using PayPal to pay for goods and services. PayPal uses industry-standard security and encryption and doesn’t share your credit card or banking information with payment recipients.

PayPal offers its own purchase protection on items that don’t arrive or aren’t as described and the credit cards paired with the account may offer their own protections.

Bottom line

Using a credit card with your PayPal account can be an easy way to earn extra rewards on the purchases you’re already making, especially if you’re a Citi, Chase or Discover cardholder. If you are a Discover or Chase cardholder, PayPal makes it especially easy to spend the rewards you’ve earned.

Feature photo courtesy of Shutterstock

Chase Sapphire Preferred® Card

WELCOME OFFER: 60,000 Points

TPG'S BONUS VALUATION*: $1,200

CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners

*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.

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More Things to Know
  • Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards®
  • 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
  • Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 60,000 points are worth $750 toward travel
  • Get unlimited deliveries with a $0 delivery fee and reduced service fees on orders over $12 for a minimum of one year on qualifying food purchases with DashPass, DoorDash's subscription service. Activate by 12/31/21.
  • Earn 5X points on Lyft rides through March 2022. That’s 3X points in addition to the 2X points you already earn on travel.
Intro APR on Purchases
N/A
Regular APR
17.49% - 24.49% Variable
Annual Fee
$95
Balance Transfer Fee
Either $5 or 5% of the amount of each transfer, whichever is greater.
Recommended Credit
Excellent/Good

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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