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How to shop with PayPal and earn reward points

Use rewards credit cards on your PayPal purchases.

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Kliment Dukovski
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A PayPal account gives you a secure place to store your payment details so you don’t have to enter them every time you buy something online. It also offers encryption for every transaction and reimbursement if items don’t show up or are different from the seller’s description.

How does PayPal work with credit cards?

Once you have set up a PayPal account, you can add your credit card details to your PayPal wallet. Then, when you’re shopping online, just click on PayPal as the payment option, enter your login details and choose the card you want to use.

You can use all four popular card networks with PayPal: Visa, Mastercard, American Express and Discover. But you’ll get the highest value with a reward credit card or with any of the PayPal rewards credit cards.

Compare rewards credit cards

Data updated regularly
Name Product Welcome Offer Rewards Annual fee Filter values
BlockFi Bitcoin Rewards Credit Card
BlockFi Bitcoin Rewards Credit Card
Up to $100 in Bitcoin rewards by earning 3.5% back in Bitcoin on all purchases in the first 90 days
3.5% back in Bitcoin in the first 90 days, up to a total of $100 in Bitcoin, then 1.5% on all purchases
$0
Earn 3.5% back in Bitcoin in the first 90 days, up to a total of $100 in Bitcoin. After that you'll earn a solid 1.5% back on all purchases.
Apply now
View details
American Express® Gold Card
American Express® Gold Card
60,000 points after spending $4,000 in the first 6 months
4x at restaurants including delivery and Uber Eats; 4x at US supermarkets on up to $25,000 annually (then 1x points), 3x points on directly-booked flights and 1x points on other eligible purchases
$250

Rose Gold is Back

 Earn up to 4x points on select purchases, a bevy of travel perks, and a welcome offer worth up to $600 based on our valuation with this upper-mid tier travel card. Terms apply, see rates & fees
Apply now
View details
Blue Cash Everyday® Card from American Express
Blue Cash Everyday® Card from American Express
Earn a $200 statement credit after spending $2,000 in the first 6 months
3% at US supermarkets on up to $6,000 per year (then 1%), 2% at US gas stations and select US department stores and 1% on other purchases (redeem as statement credit)
$0
Earn a $200 statement credit after spending $2,000 in the first 6 months. This is a higher-than-average welcome offer for a card with no annual fee. Terms apply, see rates & fees
Apply now
View details
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Compare up to 4 providers

You can add your credit card to your account by following the steps below.

  1. Log in to your PayPal account.
  2. Click on Wallet at the top of the page.
  3. Select Link a card.
  4. Fill in your card details and follow the prompts to confirm the account.

After you have linked your account, you may see a $1 charge from PayPal on your credit card account. This is a temporary authorization charge that PayPal uses to confirm the account is valid. Once confirmed, the $1 charge is released, so it’s never actually taken from your account.

What purchases will earn points through PayPal?

With most rewards credit cards, you’ll earn points when you use PayPal to buy clothes, mobile devices, makeup, music or for any other retail purchases. Spending that usually doesn’t earn points includes gambling transactions, foreign currency purchases, gift cards and any other transactions that may be processed as cash advances.

Pros and cons of using PayPal to earn credit card reward points

ProsCons
  • Protection.
    As well as fraud and theft prevention, PayPal also makes sure you get what you pay for through its Buyer Protection program. You can get a full refund if your eligible order doesn’t arrive or isn’t as described.
  • Convenient payment process.
    Instead of entering your card details and billing information, you only have to type in your PayPal login and password.
  • Avoid card payment fees.
    Sometimes you can get around credit card payment fees by choosing to pay through PayPal.
  • Amex and Discover acceptance.
    If you have an American Express card or a Discover card, you may be able to get around the acceptance limitations and surcharges that some online stores.
  • Switching to a new platform.
    If you’ve never used PayPal before, it could take time to get used to the service.
  • Not always a payment option.
    While PayPal is accepted by a wide range of stores, including eBay, The Iconic, Woolworths, Optus and Telstra, there may still be times when you need to type in your credit card details to make a purchase.
  • Overspending.
    The ease of making payments with PayPal, coupled with the ability to earn points for purchases, could lead you to rack up more credit card debt and interest charges.
  • Reward variations.
    Your card’s reward program may differ when using PayPal compared to using your card directly. Contact your credit card provider directly to find out exactly how PayPal payments will be treated in terms of rewards.

What else do I need to know?

If you want to use a rewards credit card through PayPal, make sure you keep the following details in mind:

  • Transaction details. When you make a payment through PayPal, your credit card statement may show PayPal for the transaction description, rather than the store where you made a purchase. This could make it hard to figure out what every purchase is unless you check your purchase history through PayPal.
  • Foreign currency charges. If you’re buying something in a foreign currency, PayPal automatically applies its own foreign currency conversion rates. It’s also hard to figure out how to change this setting in PayPal, but you can set it to your credit card’s rate.
  • Security. Both PayPal and credit cards offer security features to help keep your details safe when you shop online. But if you’re using a credit card through PayPal and have security concerns, you may need to contact both PayPal and your card provider to sort them out.

Bottom line

While you could just enter your credit card details every time you make a purchase online, PayPal can speed up the process while still allowing you to earn points for your spending. Just remember to regularly log in to your credit card account so that you can check your balance, make repayments and see exactly how many points you’ve earned for PayPal purchases.

If you haven’t found the right card for PayPal spending, check out some rewards credit cards and compare your options.

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