Using A Rewards Credit Card To Send Money On PayPal — Is It Worth It?

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Parts of this text have been drafted utilizing an in-house pure language technology platform. The article was reviewed, fact-checked and edited by our editorial workers.

Key takeaways

  • PayPal permits you to hyperlink accounts and playing cards, together with bank cards, to its platform to make it simpler so that you can ship and obtain cash.
  • Utilizing a bank card on PayPal is perhaps handy, particularly when you’re trying to rating some bank card rewards, however that comfort doubtless will not be price it as soon as all of the charges and rates of interest are factored in.
  • PayPal fees sure charges to these utilizing a bank card to make a switch, and card issuers typically view these cash transfers as money advances. Money advances include their very own set of excessive rates of interest, which begin accruing instantly.

Whether or not you’re sending cash to family members or paying for items and providers, PayPal is a well-liked alternative for on-line cash transfers. You would possibly ponder whether utilizing your bank card to ship cash with PayPal transactions is smart — particularly when it comes to incomes reward factors. We discover the professionals and cons of utilizing a bank card with PayPal, and whether or not the rewards you earn might be well worth the excessive transaction charges.

Ought to I take advantage of a bank card to ship cash on PayPal and earn rewards?

You should use a bank card to ship cash out of your PayPal account to buddies or household. PayPal secures transactions on its platform by way of encryption, lowering the chance of ID theft. And relying in your bank card issuer or card, you might also earn rewards — like money again, factors or miles — for transactions processed by way of PayPal, simply as you do for different bank card purchases.

However look ahead to transaction charges on cash transfers that may eat into any rewards you would possibly earn. Whenever you use a bank card to ship cash with PayPal, you pay a processing charge equal to 2.9% of the quantity you’re sending, in addition to a hard and fast $0.30 charge on every transaction. Worldwide charges could also be even increased, relying on the place your recipient lives and conversion charges. In case your bank card presents 1.5 % or 2 % money again, you could find yourself shedding cash to the charges alone.

So as to add to that expense, a person-to-person money switch is perhaps coded as a money advance to sure card issuers, attracting increased APRs and costs than a typical transaction. Plus, these excessive APRs apply from the second the money advance is processed — no grace interval. If the transaction is coded as a money switch, what you spend could not even rely towards the minimal for any bonus in your card.

Except you’re working towards a hefty welcome bonus or utilizing a card that earns boosted rewards for PayPal, it’s not the most cost effective method to ship cash.

How a lot will I pay for utilizing a card to ship cash by way of PayPal?

PayPal permits you to ship cash to different PayPal recipients for no further charge if you pay out of your PayPal account steadiness or a linked checking account. It’s if you use a bank card to ship cash that issues can get costly.

Let’s say you should ship $500 to a liked one. That $500 transaction will entice each a 2.9 % processing charge and a hard and fast charge of 30 cents.

Transaction charges Complete on $500
2.9% processing charge $14.50
$0.30 fastened charge $0.30
Complete quantity to your bank card $514.80

If that very same cost is taken into account by your card issuer to be a money advance, you would possibly pay a further 3 % to five % in transaction charges in your card assertion — including $15 to $25 extra to the overall. And that whole would start instantly attracting a excessive money advance APR, sometimes 24.99 % to 29.99 %.

How one can ship cash on PayPal utilizing a bank card

When you’ve weighed the prices towards the comfort of utilizing PayPal to ship cash with a bank card and nonetheless need to proceed, try to be ready to take action fairly simply.

Merely create or check in to your account and take these six steps:

  1. Hyperlink your bank card. Choose or faucet Pockets and add your debit or bank card to your account.
  2. Request to ship cash. Go to Ship and Request on the PayPal website or faucet Funds from the app.
  3. Enter your recipient’s particulars. Add the individual’s identify, PayPal username, e mail deal with or cellular quantity and click on or faucet Subsequent.
  4. Point out the switch quantity. Enter the quantity you’re trying to ship, select the forex and add any notes on your information. For worldwide transactions, pay particular consideration to the extra charges.
  5. Select your fee technique. Choose the bank card linked to your PayPal account.
  6. Verify and ship your fee. Fastidiously evaluation particulars and costs, and click on or faucet Ship Cost Now.

Bank cards that provide bonus rewards for PayPal transactions

When you continuously use PayPal, think about a card that gives bonus rewards for PayPal transactions. Some choices embody:

PayPal Cashback Mastercard

The PayPal Cashback Mastercard®* is a no-annual-fee card that gives 3 % money again if you store with PayPal and limitless 2 % money again on all different purchases. You additionally earn 3 % money again if you ship cash to different PayPal customers.

Chase Freedom Flex

The Chase Freedom Flex℠* is a well-liked card that gives boosted 5 % rewards on PayPal transactions as a part of its rotating bonus classes. It additionally presents 3 % money again on eating and 1 % money again on all different purchases, in addition to limited-time presents which have included 5 % money again on Lyft. All of this with no annual charge.

The underside line

Whereas PayPal might be handy, it’s among the many most costly methods to ship cash to buddies, household and different PayPal customers when you’re utilizing a bank card to fund the transaction. Count on to pay hefty charges that can eat into any card rewards you stand to earn. Your card issuer may deal with the transaction as a money advance, which comes with steep charges and APRs — with no grace interval.

When you’re a frequent PayPal buyer, look right into a bank card that gives boosted rewards on PayPal transactions. And find out about different methods to ship cash along with your bank card, together with lower-cost alternate options.

*Issuer-required disclosure assertion
Information concerning the PayPal Cashback Mastercard® and Chase Freedom Flex℠ has been collected independently by Bankrate. The cardboard particulars haven’t been reviewed or permitted by the cardboard issuer.

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