Paying with a credit card or PayPal generates similar fees and protections, and can even earn similar rewards. The best choice for you ultimately depends on which option is more convenient, since the other differences can be negligible.
Here’s how the two payment methods stack up against each other.
When you use your credit card to buy something in the U.S., you generally don’t get hit with extra fees. It’s the merchant that pays the interchange fee, which is typically 1% to 3% of the purchase price plus a flat fee.
When you make a purchase with PayPal, it’s also free (as long as it’s within the U.S.), and similarly, the merchant pays a fee, which is 2.9% plus 30 cents per sale.
When you make purchases directly with a rewards credit card, you'll earn points, miles or cash back on the transaction. For example, a good flat-rate cash-back card earns 1.5% to 2% back on every purchase.
When you pay via PayPal, you can earn rewards at your card's normal rate, too, as long as that card is linked to your PayPal account and you select that option when you pay. It's still free to make purchases this way.
PayPal offers a co-branded credit card from Synchrony Bank: the PayPal Cashback Mastercard®. You must have a PayPal account. It earns cash back on PayPal and other purchases.
If you're a victim of credit card fraud and you report it within 60 days, federal law limits your liability. Most credit card issuers go even further and offer full liability protection. When an unauthorized charge shows up on your account, file an official report. Once the investigation is complete, the fraudulent transactions will be refunded to your account.
PayPal also offers fraud and purchase protection. If you were charged for something you didn’t purchase, PayPal says you'll be covered as long as you report the problem within 60 days. Similarly, if your order never arrives, or what you ordered is different from what arrives, PayPal says you can be reimbursed for the full purchase price, along with any shipping charges. Terms apply.
Under the Fair Credit Billing Act, credit cardholders are protected by a dispute settlement process that allows them to challenge billing errors within 60 days of receiving the statement with the error. The card issuer can issue a chargeback, or refund to the consumer, while it investigates. The cardholder keeps the money if the issuer concludes that the cardholder was in the right.
Aside from any coverage PayPal may have under the Fair Credit Billing Act for any of its credit cards or plans, PayPal offers some voluntary benefits for its transactions through its purchase protection program. There are, however, some exclusions, including for in-person purchases and custom-made goods. Voluntary benefits offered by companies can be helpful to consumers, but they are not enforceable as federal protections.
Still, for most transactions, consumers experience similar protections when paying with either method.
Visit your My NerdWallet Settings page to see all the writers you're following. Paying with a credit card or PayPal generates similar fees and protections, and can even earn similar rewards. The best choice for you ultimately depends on which option is more convenient, since the other differences can be negligible.
At the end of the day, this means your choice between paying with a credit card or through PayPal boils down to convenience. Paying with either option offers roughly the same security features, so you should base your decision on whatever is easiest for you.
Linking your credit card to your PayPal account can offer a smooth and safe checkout experience. PayPal's end-to-end encryption, two-factor authentication and other security features can help protect your card information.
One of the biggest drawbacks of using a credit card to send money to another person using PayPal is the processing fee. PayPal charges 2.9%, plus a fixed fee of 30 cents to process a person-to-person money transfer using a credit card. This fee can quickly eclipse any credit card rewards you might earn.
While you can send money through the platform with $0 transaction fees to friends and family from your bank or PayPal balance, you'll pay 2.9% per transaction when you use your credit card.
Despite the benefits, businesses should be aware of PayPal transaction fees, account freezes, lack of customization options, high currency conversion fees, and the possibility of chargebacks.
Securely pay just about anyone, anywhere in the world. Fast: There's no need to enter all your financial information every time you shop. Add your info to your wallet, then speed through checkout with your card, bank, or PayPal Credit product with freedom and flexibility.
Use the "Friends and Family" option. When sending money through PayPal, you have the option to use the 'Friends and Family' category instead of 'Goods and Services'. ...
Does your business currently accept credit cards? PayPal is also different because, while it offers credit card processing services and can function similarly to a merchant account, it is more expensive than most major credit card processors.
With PayPal there are no monthly fees or set-up costs. You pay only when you complete a sale and can apply for discounted rates based on your sales volume.
To sum it up, PayPal: Enables online and in-person payments for goods and services. Provides a way to send and receive money internationally. Ensures various levels of digital security and payment protection.
If they choose to pay with a credit or debit card, PayPal will process credit card payments too. Customers simply enter their credit card details and click Pay to authorize payment. This encrypts and transmits the information to PayPal, which we then use to authorize the payment with the issuing bank.
A: Some of PayPal's biggest competitors include Square, Stripe, Payoneer, Podium, Apple Pay, Google Pay, Shopify Payments, Transferwise, and Amazon Pay.
Report it within 180 days and PayPal will investigate. If we determine that there was indeed an Unauthorized Transaction or Error, you will be covered by our $0 Liability for Eligible Unauthorized Transactions program.
What are the advantages of paying with a credit card? Paying with a credit card offers advantages like a grace period before your statement is due, fraud protection, opportunities to earn rewards, welcome bonuses and more.
Introduction: My name is Gregorio Kreiger, I am a tender, brainy, enthusiastic, combative, agreeable, gentle, gentle person who loves writing and wants to share my knowledge and understanding with you.
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