How Does a PayPal Credit Card Work?

PayPal Basics

PayPal is a popular online financial service, offering its customers an easy way to make transactions and payments online. When new customers set up a PayPal account, they link either an active checking account or credit card to their new account. Then when they want to purchase something online or bid on an eBay auction, they can pay with their PayPal account information, which will then withdraw the necessary funds from the linked account. For those who sell items on eBay or other websites, PayPal also allows them to receive payments from other users and then transfer their PayPal money to any checking account.


Any individual with an active PayPal account can apply for an official PayPal MasterCard credit card. The application process is completed directly on the PayPal website (see Resources below), and the company will make a credit decision on your application almost instantaneously. If your application is approved, the new card will be synced with your PayPal account and you can begin using the card as a separate online funding source. You will receive the physical credit card 1 to 2 weeks after account approval.

Card Use

The PayPal credit card functions as a regular credit card and can be used anywhere that MasterCard is accepted, including online shops. In addition, the credit card becomes a separate source of funding in your PayPal account, which means you can start making online payments with it right away. PayPal offers its credit card with no annual fee and no liability for unauthorized purchases. PayPal credit card customers will receive monthly statements in the mail detailing every transaction, and then payments can be sent both by mail and online.

Rewards and Benefits

When your application for a new PayPal credit card is approved, you are automatically enrolled in the PayPal Plus Credit Card Rewards Program. As a member of the program, you earn reward points from every transaction you make using your PayPal credit card. Your rewards account is credited 1 point for every dollar that you spend. Once you have accrued a certain number of reward points, you can log on to the PayPal credit card website and redeem your points for a number of different reward vouchers. These vouchers can be used to save money on future PayPal purchases.