PayPal charges a fee when you use a credit card to send money to friends, pay for goods, or add funds to your account
PayPal's fee structure depends on what you are doing and which card you use. If you send money as a "friends and family" transfer using a credit card, PayPal charges you 2.2% of the amount plus $0.30. If you pay for goods or services with a credit card, the merchant typically absorbs that fee, not you — but if you are the one receiving payment, you will see a fee deducted from what lands in your account. Adding funds to your PayPal balance from a credit card also triggers the 2.2% plus $0.30 charge.
The reason PayPal charges this fee is that credit card companies charge PayPal a processing fee whenever a credit card is used. PayPal passes most of that cost to you. Debit cards and bank transfers do not carry the same processing cost, so PayPal does not charge you a fee for those methods — or charges a lower one.
Key Takeaways
- Sending money to friends or family with a credit card costs 2.2% of the amount plus $0.30; using a debit card or bank transfer is free.
- When you receive a payment for goods or services, PayPal deducts a fee from what you get, regardless of how the buyer paid.
- Adding funds to your PayPal balance from a credit card triggers the same 2.2% plus $0.30 fee that sending money does.
- The fee applies to the full transaction amount, so a $100 transfer costs you $2.30 extra when you use a credit card.
Fees for sending money to friends and family
When you send money to another person using PayPal's "send money" or "friends and family" feature with a credit card, you pay 2.2% of the amount plus a flat $0.30 fee. This is PayPal's standard credit card processing fee. On a $100 transfer, you would pay $2.30. On a $500 transfer, you would pay $11.30.
If you use a debit card instead, the fee is zero. If you transfer money from your bank account directly, the fee is also zero. The only time you pay this fee is when a credit card is the funding source. This is why many people keep a PayPal balance or link a bank account — to avoid the charge when sending money to friends.
Fees when you receive a payment for goods or services
If someone pays you through PayPal for something you sold or a service you provided, PayPal deducts a fee from the money that lands in your account. The standard fee is 2.2% plus $0.30 for domestic transactions in the United States. This applies whether the buyer used a credit card, debit card, or bank transfer — you pay the same fee regardless.
For example, if a buyer sends you $100 for an item, you receive $97.70. The $2.30 difference goes to PayPal. This is different from the friends and family scenario, where the sender pays the fee. Here, the receiver pays it. If you are selling items regularly, this fee is a cost of doing business that you may want to factor into your pricing.
Adding funds to your PayPal balance from a credit card
When you add money to your PayPal account balance using a credit card, PayPal charges 2.2% plus $0.30. This is the same fee as sending money to a friend. If you add $200 to your balance, you pay $4.70 in fees. The $200 plus the $4.70 charge comes out of your credit card.
Many people add funds to their PayPal balance to avoid fees on future transactions, but this strategy only works if you use a debit card or bank transfer to load the balance. If you use a credit card to load it, you are paying a fee upfront for the privilege of having that money in PayPal. It usually makes more sense to pay directly from your bank account or debit card when you need to send money.
Why credit cards cost more than other payment methods
Credit card networks — Visa, Mastercard, American Express, Discover — charge merchants and payment processors a fee every time a card is used. This fee, called an interchange fee, typically ranges from 1.5% to 3% of the transaction amount, depending on the card type and the merchant category. PayPal has to pay this fee to the card network, so it passes the cost to you.
Bank transfers and debit cards do not carry the same interchange cost. A direct bank transfer costs PayPal almost nothing to process, which is why it is free for you. Debit cards have lower interchange fees than credit cards, which is why some payment processors charge less for debit than for credit — though PayPal treats them the same way for most transactions.
How to avoid PayPal credit card fees
The simplest way to avoid fees is to use a debit card or link your bank account directly to PayPal. Both methods are free for sending money to friends and family. If you are receiving a payment for goods or services, you cannot avoid the fee — PayPal will deduct it regardless of how the buyer paid.
If you send money regularly, keeping a PayPal balance funded by a bank transfer or debit card means you can send money from that balance without a fee. You can also use PayPal's "request money" feature, which sometimes encourages the other person to pay from their bank account rather than a credit card, though they can choose their own payment method.
For large transfers, the fee difference adds up. A $1,000 transfer costs $22.30 if you use a credit card but $0 if you use a bank account. If you are paying for something online and the merchant accepts both PayPal and direct credit card payment, paying directly with your card avoids the PayPal fee entirely.
Fees for different types of PayPal transactions
| Transaction Type | Credit Card Fee | Debit Card or Bank Transfer Fee |
|---|---|---|
| Send money to friends/family | 2.2% + $0.30 | Free |
| Receive payment for goods/services | 2.2% + $0.30 (deducted from amount received) | 2.2% + $0.30 (deducted from amount received) |
| Add funds to PayPal balance | 2.2% + $0.30 | Free |
| Pay for something at a merchant | Free (merchant pays the fee) | Free (merchant pays the fee) |
Frequently Asked Questions
Does PayPal charge a fee if I use a credit card to pay for something online?
No. When you use PayPal to pay a merchant or business, you do not pay a fee. The merchant pays PayPal's processing fee, not you. This is true whether you fund the payment with a credit card, debit card, or bank account.
Can I dispute a PayPal credit card fee?
PayPal's fees are disclosed in their user agreement before you complete a transaction. Once you confirm the transaction, the fee is final. You cannot dispute it with PayPal the way you might dispute a charge with your credit card company. If you believe you were charged in error, you can contact PayPal support, but the fee itself is not negotiable.
What if I use a rewards credit card — do I still pay the PayPal fee?
Yes. The PayPal fee applies regardless of which credit card you use. However, you may still earn rewards points on the transaction amount, so the rewards might offset some of the fee cost. Check your card's terms to see whether PayPal transactions earn points at the standard rate or a reduced rate.
Is the PayPal fee the same for international transfers?
No. International transfers have higher fees. For sending money internationally, PayPal charges a percentage fee plus a fixed amount that varies by country. The exact fee depends on which country you are sending to and which currency is involved. Check PayPal's fee schedule for the specific countries you use.