PayPal vs credit cards: What's safer for online shopping?

PayPal encrypts all financial data, while credit cards often rely on merchant security.
Credit cards offer 24/7 fraud monitoring and zero-liability policies protecting against fraudulent transactions.
In 2022, 91% of credit card fraud in Australia occurred online via card-not-present transactions.

You can make fast, secure payments with both PayPal and a credit card – and many retailers let you use either one. So how do you decide between them? The best option is to just choose the one you prefer.

If you don't have a preference or aren't sure whether PayPal or a credit card is better for you, let's take a look at the features of each.

Is it better to use PayPal or a credit card?

Here’s a quick guide to the different types of protection you’ll get when you use PayPal or a credit card. As features can vary depending on the credit card you’re using, we’ve focused on the key options most Australian cards offer.

Security feature	PayPal	Credit cards
Fraud monitoring	Yes.	Yes.
24/7 customer service	No. PayPal’s customer service hours are 8am to 8pm (AEST) Monday to Friday and 8am to 7pm Saturday and Sunday.	Yes. American Express, Mastercard and Visa credit cards all offer 24/7 emergency hotlines for lost or stolen cards as well as for suspected fraud.
2-factor authentication	Yes. You can choose to have a one-time PIN sent to your mobile phone by turning on PayPal Security Key.	Yes. With Mastercard SecureCode, Visa Secure or American Express SafeKey, you can authorise the transaction with a PIN or other security step.
Reimbursement or chargeback	Yes. You can be reimbursed up to $20,000 if your purchases are not delivered or are significantly different to the seller’s description.	Yes. If your purchases are not delivered or are not as they were described, you may be able to reverse the transaction by requesting a chargeback.
Encryption technology	Yes. PayPal offers encryption for all financial details stored in your account.	No. While credit cards offer encryption for in-store purchases, most rely on encryption used by online stores for payments over the internet.
Pre-set transaction limits	No.	Yes. Some cards allow you to set a customised limit for different types of transactions, such as those made online.
Return shipping costs	Yes. PayPal offers to refund the cost of return shipping for eligible purchases, up to $45 per return, 8 times per year.	No.

Should I use a credit card for online shopping?

Using a credit card is an incredibly popular payment method for a lot of Australians. In fact, there are more than 13 million credit cards in circulation in Australia. Just about any online store you visit will give you the option of paying by card. With this method, you’ll need to provide the following details:

Your name (usually as it appears on the card)
The card number

The expiry date
The card verification value (the CVV or CVC).

The CVV helps protect your account from fraud when you use the card for online purchases – or for other card-not-present transactions, such as those made over the phone.

Similar to in-store purchases, card acceptance may vary depending on whether you’re using an American Express, Mastercard or Visa credit card. Depending on the card and your provider, you could also get an added layer of security through text alert systems or services like Visa Secure, which adds another form of authorisation to payments before they are approved.

Our expert says

"I usually pay with PayPal first if possible, as they have a really clear customer support system if something goes wrong. This way, you can dispute the claim through PayPal first, and then use a chargeback with your credit card as a last resort."

Graham Cooke

Head of Consumer Research

Pros and cons of using a credit card

Pros

24/7 fraud monitoring. Most Australian credit cards have security systems that detect and flag suspicious activity as it happens. Your card can be locked or cancelled if fraudulent activity is suspected.
Zero-liability policies. Also known as a fraud protection guarantee, this feature covers the cost of any fraudulent transactions made on your account.
Protect your actual money. Credit card providers will reimburse your money when things go wrong and protect your money if your account is compromised.
Fee-free options. Some cards offer 0% foreign transaction fees when you make purchases with an overseas business, potentially saving you 2-3% per online purchase.
Rewards. If you have a reward or frequent flyer credit card, you can earn points per $1 spent.

Cons

Online fraud risks. Most credit card fraud in Australia happens online. Data from the Australian Payments Network shows card-not-present (CNP) fraud made up 91% of all card fraud in the year to 30 June 2022.
Entering card details. You may have to type your card’s details each time you make a purchase, which could increase the risk of fraud if your internet connection isn’t secure or if you’re in a public place.
Potential interest charges. If you carry a balance from your online shopping, you’ll be charged interest at the card’s purchase rate.
Unexpected fees. If an online store is based overseas, you may be charged foreign transaction fees even if the purchase is shown in Australian dollars.

Tips for using your credit card to safely shop online

Should I use PayPal for online shopping?

Unlike a credit card, PayPal lets you store your chosen payment details in a secure account. You can then make payments through PayPal when you shop with a store that accepts it.

When you choose this option at the online checkout, you’ll need to log in to PayPal and choose the account you want to make a payment from. PayPal will then process the transaction through an encrypted network.

This set-up means you can store your credit card, debit card or even your bank account details in a PayPal account, and then choose which of these options you use when paying through PayPal. As a result, you don’t have to enter your payment details every time you make a purchase.

Pros and cons of using PayPal

Pros

Payment encryption. Every payment made through PayPal is encrypted so that your details are kept safe, reducing the risk of personal or payment information being stored in places you don’t want it.
Fast payments. You don’t need to enter your card or account details when you make a payment through PayPal. You can also set up PayPal One Touch, allowing you to make payments without entering your PayPal login details on an authorised device.
Refund options. PayPal offers reimbursement for return shipping costs (up to $45, 8 times per year) as well as for items that aren't delivered or items that differ from the retailer's description.
Credit card rewards. If you add a rewards credit card to your PayPal account, you’ll be able to earn points per $1 spent on eligible purchases.

Cons

Fraud target. PayPal is a well-known online company and has previously been targeted by hackers. While it does regular security updates, there is still some risk involved in storing your card or account details anywhere online.
Currency conversion costs. If you shop with retailers that don’t accept foreign currencies, PayPal will use its own conversion rates for the transaction, which can be significantly higher than rates applied by most cards.
Confusing payment details. Transactions could show PayPal's billing details rather than the retailer's details. Check each transaction to be sure you made those payments.
Acceptance. Not all online stores accept PayPal, so using it will often depend on the business you’re shopping with.

Both credit cards and PayPal offer a number of security features and benefits when you’re shopping online – as well as potential costs and pitfalls. So, if you’re shopping with an online store that accepts credit cards and PayPal payments, choosing between them really comes down to which of the above features and services you prefer.

Compare credit cards with fraud protection guarantees

Every Visa, Mastercard and American Express card has a fraud protection guarantee. If we listed them all, you'd be looking at about 270 cards here. So we've taken our best credit cards and listed them here to help you narrow down your options.

23 of 207 results

Purchase rate p.a.	Bonus points	Points per $ spent	Interest-free period	Balance transfer rate p.a.	Annual fee
American Express Explorer Credit Card Most LovedAmerican Express Membership RewardsUncapped points	23.99%	Bonus points 75,000	Points per $ spent 2	Interest-free period Up to 55 days on purchases	Balance transfer rate p.a. N/A	Annual fee $395	Get 75,000 Bonus Membership Rewards Points when you spend $4,000 on eligible purchases in the first 3 months. New American Express card members only. Ends 03 Nov 2026. T&Cs apply.	Go to site View details Compare product selectionCompare	loading
Qantas Money Platinum Qantas Frequent Flyer	20.99%	Bonus points 80,000	Points per $ spent 1	Interest-free period Up to 44 days on purchases	Balance transfer rate p.a. 0% for 24 months with 3% balance transfer fee, then 21.99%	Annual fee $349 first year ($399 after)	Receive 2 single-entry complimentary lounge invitations per year.	Go to site View details Compare product selectionCompare	loading
Latitude Gem Visa - Exclusive Offer Exclusive	28.99%	Bonus points N/A	Points per $ spent N/A	Interest-free period Up to 55 days on purchases	Balance transfer rate p.a. 0% for 27 months with 3% balance transfer fee, then 29.99%	Annual fee $143.40	Finder exclusive: Save with 0% p.a. for 27 months on Balance Transfers (with 3% balance transfer fee). Balance Transfer offer only available to new customers approved by 26 Feb 2027. Balance Transfer must be submitted by 31 Mar 2027. T&Cs apply.	Go to site View details Compare product selectionCompare	loading
Qantas American Express Ultimate Card Most LovedQantas Frequent FlyerUncapped points	23.99%	Bonus points 120,000	Points per $ spent 1.25	Interest-free period Up to 44 days on purchases	Balance transfer rate p.a. N/A	Annual fee $450	Get 70,000 bonus Qantas Points when you spend $5,000 on eligible purchases in the first 3 months and additional 50,000 points when you meet the same spend requirement in year 2. New American Express card members only. Ends 17 Nov 2026. T&Cs apply.	Go to site View details Compare product selectionCompare	loading
Virgin Money Anytime Rewards Credit Card Virgin Money Rewards	21.99%	Bonus points 60,000	Points per $ spent 0.5	Interest-free period Up to 44 days on purchases	Balance transfer rate p.a. 0% for 12 months with 3% balance transfer fee, then 21.99%	Annual fee $169	Go to site View details Compare product selectionCompare	loading
ANZ Frequent Flyer Black Finder AwardQantas Frequent Flyer	22.49%	Bonus points 100,000	Points per $ spent 1	Interest-free period Up to 44 days on purchases	Balance transfer rate p.a. 23.49%	Annual fee $370	Get up to 100,000 bonus Qantas Points: 50,000 bonus Qantas Points when you spend $6,000 on eligible purchases in the first 3 months from approval, and an additional 50,000 points when you keep your card for over 12 months.	Go to site View details Compare product selectionCompare	loading
Westpac Low Rate Card	13.74%	Bonus points N/A	Points per $ spent N/A	Interest-free period Up to 55 days on purchases	Balance transfer rate p.a. 0% for 20 months with 3% balance transfer fee, then 21.99%	Annual fee $84	Go to site View details Compare product selectionCompare	loading
Virgin Australia Velocity Flyer Card - Bonus Points Offer Velocity Frequent Flyer	21.99%	Bonus points 70,000	Points per $ spent 0.5	Interest-free period Up to 44 days on purchases	Balance transfer rate p.a. 0% for 12 months with 3% balance transfer fee, then 21.99%	Annual fee $169	View details Compare product selectionCompare	loading
Virgin Australia Velocity Flyer Card - Balance Transfer Offer Velocity Frequent Flyer	21.99%	Bonus points N/A	Points per $ spent 0.5	Interest-free period Up to 44 days on purchases	Balance transfer rate p.a. 0% for 24 months with 3% balance transfer fee, then 21.99%	Annual fee $169	Go to site View details Compare product selectionCompare	loading
Kogan Money Credit Card - Balance Transfer Exclusive Offer ExclusiveKogan Rewards Program	21.99%	Bonus points N/A	Points per $ spent 1	Interest-free period Up to 44 days on purchases	Balance transfer rate p.a. 0% for 18 months with 2% balance transfer fee, then 22.74%	Annual fee $0	Finder exclusive: Save with 0% p.a. for the first 18 months on balance transfers (with a one-time 2% balance transfer fee). T&Cs apply.	Go to site View details Compare product selectionCompare	loading
Virgin Money Anytime Rewards Credit Card - Balance Transfer Offer Virgin Money Rewards	21.99%	Bonus points N/A	Points per $ spent 0.5	Interest-free period Up to 44 days on purchases	Balance transfer rate p.a. 0% for 24 months with 3% balance transfer fee, then 21.99%	Annual fee $169	Go to site View details Compare product selectionCompare	loading
American Express Qantas Business Rewards Card Finder AwardMost LovedQantas Business RewardsUncapped points	N/A	Bonus points 150,000	Points per $ spent 1.25	Interest-free period Up to 51 days on purchases	Balance transfer rate p.a. N/A	Annual fee $450	Earn 150,000 bonus Qantas Points plus $200 in your Qantas Business Rewards Travel Fund when you spend $6,000 on eligible purchases in the first 3 months. New American Express card members only. Ends 10 Nov 2026. T&Cs apply. ABN holders w/ $75k revenue.	Go to site View details Compare product selectionCompare	loading
Latitude Low Rate Mastercard - Balance Transfer Offer	13.99%	Bonus points N/A	Points per $ spent N/A	Interest-free period Up to 55 days on purchases	Balance transfer rate p.a. 0% for 25 months with 3% balance transfer fee, then 29.99%	Annual fee $69	Balance Transfer offer only available to new customers approved by 31 Jan 2027. Balance Transfer must be submitted by 31 Mar 2027. T&Cs apply.	Go to site View details Compare product selectionCompare	loading
Westpac Altitude Qantas Black Qantas Frequent FlyerUncapped points	23.98%	Bonus points 150,000	Points per $ spent 0.8	Interest-free period Up to 45 days on purchases	Balance transfer rate p.a. N/A	Annual fee $295	Get 90,000 bonus Qantas Points and 50 Status Credits in year 1 when you spend $6,000 on eligible purchases in the first 90 days of card approval and 60,000 points when you meet the same spend requirement within 90 days of card anniversary in year 2. T&Cs apply.	Go to site View details Compare product selectionCompare	loading
Qantas Money Everyday Qantas Frequent Flyer	20.99%	Bonus points 8,000	Points per $ spent 0.75	Interest-free period Up to 44 days on purchases	Balance transfer rate p.a. 0% for 12 months with 3% balance transfer fee, then 21.99%	Annual fee $99	View details Compare product selectionCompare	loading
NAB Qantas Rewards Signature Card Qantas Frequent Flyer	22.49%	Bonus points 60,000	Points per $ spent 0.75	Interest-free period Up to 44 days on purchases	Balance transfer rate p.a. 0% for 12 months with 3% balance transfer fee, then 22.99%	Annual fee $449	Earn up to 60,000 bonus Qantas Points (40,000 points + $200 cashback when you spend $5,000 in the first 90 days and additional 20,000 points when you keep your card open for over 12 months from activation).	Go to site View details Compare product selectionCompare	loading
American Express Platinum Business Card Most LovedAmerican Express Membership RewardsUncapped points	N/A	Bonus points 350,000	Points per $ spent 2.25	Interest-free period Up to 55 days on purchases	Balance transfer rate p.a. N/A	Annual fee $1,750	Limited-time offer: Get 350,000 Bonus Membership Rewards Points and an $875 credit when you spend $12,000 on eligible purchases in the first 3 months. New American Express card members only. Ends 3 Nov 2026. T&Cs apply. ABN holders w/ $75,000 revenue.	Go to site View details Compare product selectionCompare	loading
Coles Rewards Mastercard Flybuys	21.99%	Bonus points 40,000	Points per $ spent 1	Interest-free period Up to 44 days on purchases	Balance transfer rate p.a. 0% for 12 months with 5% balance transfer fee, then 21.99%	Annual fee $99	View details Compare product selectionCompare	loading
Latitude 28° Global Platinum Mastercard Latitude Rewards	28.99%	Bonus points N/A	Points per $ spent N/A	Interest-free period Up to 55 days on purchases	Balance transfer rate p.a. 0% for 12 months with 3% balance transfer fee, then 29.99%	Annual fee $0 first year ($96 after)	Offers $0 annual credit card fee in the first year (normally $96), plus $0 foreign exchange fee on purchases online or overseas. New and approved customers only. T&Cs apply.	Go to site View details Compare product selectionCompare	loading
Latitude GO Mastercard	28.99%	Bonus points N/A	Points per $ spent N/A	Interest-free period Up to 55 days on purchases	Balance transfer rate p.a. 0% for 26 months with 3% balance transfer fee, then 29.99%	Annual fee $143.40	Balance Transfer offer only available to new customers approved by 26 Feb 2027. Balance Transfer must be submitted by 31 Mar 2027. T&Cs apply.	Go to site View details Compare product selectionCompare	loading
Coles No Annual Fee Mastercard Flybuys	21.99%	Bonus points N/A	Points per $ spent 0.5	Interest-free period Up to 44 days on purchases	Balance transfer rate p.a. 0% for 12 months with 5% balance transfer fee, then 21.99%	Annual fee $0	View details Compare product selectionCompare	loading
ANZ Platinum Credit Card	22.49%	Bonus points N/A	Points per $ spent N/A	Interest-free period Up to 55 days on purchases	Balance transfer rate p.a. 23.49%	Annual fee $0 first year ($87 after)	Earn $450 back to your new card when you spend $4,500 on eligible purchases in the first 4 months from approval. Plus, a $0 annual fee in the first year.	Go to site View details Compare product selectionCompare	loading
American Express Velocity Platinum Card Finder AwardMost LovedVelocity Frequent FlyerUncapped points	23.99%	Bonus points 50,000	Points per $ spent 1.25	Interest-free period Up to 55 days on purchases	Balance transfer rate p.a. N/A	Annual fee $440	Earn 50,000 bonus Velocity Points when you spend $5,000 on eligible purchases in the first 3 months, plus up to 100 bonus Status Credits. New American Express card members only. T&Cs apply.	Go to site View details Compare product selectionCompare	loading

Showing 23 of 207 results

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To make sure you get accurate and helpful information, this guide has been edited by David Gregory as part of our fact-checking process.

Written by

Amy Bradney-George

Journalist

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Amy is an experienced journalist with over 16 years of experience, contributing to major publications like Money Magazine, The Sydney Morning Herald, and ABC News Australia. Specialising in personal finance, she frequently appeared in media outlets and on radio. Amy holds a Bachelor of Arts in Journalism and Drama from Griffith University and earned RG146 certifications in Tier 1 Generic Knowledge and Tier 2 General Advice Deposit Products, ensuring her expertise is grounded in current financial regulations. Amy was Finder's Senior Writer for Credit Cards from 2016 to 2024. See full bio

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2 Responses

SilviaJanuary 27, 2025

Should I use Latitude credit card, PayPal or WISE to pay for accomodation in Slovenia?

Finder

AngusJanuary 28, 2025Finder

Hi Silvia, The options available will depend on where you’re booking the accommodation. From a security perspective, using PayPal if it’s available means you won’t have to share your actual credit card details. However, some hotels will require a credit card on check-in for security anyway.

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PayPal vs credit card payments. Which is safer?

Compare the features and benefits of using PayPal or credit cards when you're making online purchases.

Key takeaways

Is it better to use PayPal or a credit card?