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

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.

22 of 22 results

Purchase rate p.a.	Bonus points	Points per $ spent	Interest-free period	Balance transfer rate p.a.	Annual fee
Westpac Low Rate Card	Purchase rate p.a. 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 $59	0% Balance Transfer Offer Save with a 0% p.a. interest rate on balance transfers for 20 months (with a 3% balance transfer fee). Plus, a low 13.74% p.a. purchase interest rate.	Go to site More info Compare product selectionCompare	loading
NAB Rewards Platinum Card – Velocity Points Most LovedNAB Rewards	Purchase rate p.a. 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 12 months with 3% balance transfer fee, then 21.74%	Annual fee $195	Up to 80,000 Bonus Points Get up to 80,000 bonus Velocity Points: 60,000 points when you spend $4,000 in the first 90 days and 20,000 after 12 months.	Go to site More info Compare product selectionCompare	loading
Kogan Money Credit Card - Balance Transfer Exclusive Offer ExclusiveKogan Rewards Program	Purchase rate p.a. 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	0% Balance Transfer Offer Finder Exclusive: Save with 0% p.a. for the first 18 months on balance transfers (with a one-time 2% balance transfer fee).	Go to site More info Compare product selectionCompare	loading
Qantas American Express Ultimate Card Finder AwardMost LovedQantas Frequent Flyer	Purchase rate p.a. 23.99%	Bonus points 90,000	Points per $ spent 1.25	Interest-free period Up to 44 days on purchases	Balance transfer rate p.a. N/A	Annual fee $450	Up to 90,000 bonus Qantas Points Limited time offer: Get up to 90,000 bonus Qantas Points. Plus, a yearly $450 Travel Credit. New American Express card members only. T&Cs apply.	Go to site More info Compare product selectionCompare	loading
ANZ Rewards Black Credit Card Finder AwardANZ Rewards Program	Purchase rate p.a. 20.99%	Bonus points 180,000	Points per $ spent 2	Interest-free period Up to 44 days on purchases	Balance transfer rate p.a. 21.99%	Annual fee $375	Up to 180,000 extra ANZ Reward Points & $100 back Earn up to 180,000 extra ANZ Reward Points: 130,000 extra points + $100 back when you spend $5,000 on eligible purchases in the first 3 months from approval, and additional 50,000 points when you keep your card for over 15 months from activation.	Go to site More info Compare product selectionCompare	loading
Qantas Money Platinum Qantas Frequent Flyer	Purchase rate p.a. 20.99%	Bonus points 100,000	Points per $ spent 1	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 $349 first year ($399 after)	Up to 100,000 Bonus Points Earn up to 100,000 bonus Qantas Points when you spend $5,000 in the first 90 days. Plus, save with a reduced first-year annual fee.	Go to site More info Compare product selectionCompare	loading
Westpac Altitude Qantas Black Qantas Frequent Flyer	Purchase rate p.a. 20.99%	Bonus points 150,000	Points per $ spent 0.5	Interest-free period Up to 45 days on purchases	Balance transfer rate p.a. N/A	Annual fee $370	Up to 150,000 Bonus Qantas Points Offer Get up to 150,000 bonus Qantas Points (90,000 points in year 1 when you spend $6,000 on eligible purchases in the first 120 days and additional 60,000 points when you meet the same spend requirement in year 2).	Go to site More info Compare product selectionCompare	loading
ANZ Rewards Platinum - Velocity Points ANZ Rewards Program	Purchase rate p.a. 20.99%	Bonus points 80,000	Points per $ spent 1.5	Interest-free period Up to 44 days on purchases	Balance transfer rate p.a. 21.99%	Annual fee $149	Up to 80,000 Bonus Points and $50 back Earn up to 80,000 bonus Velocity Points: 60,000 points + $50 back when you spend $3,500 in the first 3 months from approval and 20,000 points when you keep your card open for 15 months from activation.	Go to site More info Compare product selectionCompare	loading
American Express Explorer Credit Card Most LovedAmerican Express Membership Rewards	Purchase rate p.a. 23.99%	Bonus points 50,000	Points per $ spent 2	Interest-free period Up to 55 days on purchases	Balance transfer rate p.a. N/A	Annual fee $395	50,000 Bonus Membership Rewards Points Get 50,000 Bonus Membership Rewards Points when you spend $4,000 on eligible purchases in the first 3 months. New American Express card members only. T&Cs apply.	Go to site More info Compare product selectionCompare	loading
Qantas Money Everyday Qantas Frequent Flyer	Purchase rate p.a. 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	8,000 Bonus Qantas Points Offers 8,000 bonus Qantas Points when you spend at least $3,000 on eligible purchases within the first 90 days, plus a 0% p.a. balance transfer offer, with 3% balance transfer fee.	Go to site More info Compare product selectionCompare	loading
American Express Qantas Business Rewards Card Finder AwardMost LovedQantas Business Rewards	Purchase rate p.a. 0%	Bonus points 130,000	Points per $ spent 1.25	Interest-free period Up to 51 days on purchases	Balance transfer rate p.a. N/A	Annual fee $450	130,000 Bonus Qantas Points Earn 130,000 bonus Qantas Points when you spend $3,000 on eligible purchases in the first 2 months. New American Express card members only. T&Cs apply. ABN holders w/ $75k revenue.	Go to site More info Compare product selectionCompare	loading
NAB Low Rate - Cashback Offer Most Loved	Purchase rate p.a. 13.49%	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 21.74%	Annual fee $59	$400 Cashback & 0% Balance Transfer Offer Offers $400 cashback when you spend $5,000 on everyday purchases within the first 150 days.	Go to site More info Compare product selectionCompare	loading
ANZ Qantas Business Rewards Qantas Business Rewards	Purchase rate p.a. 20.24%	Bonus points 150,000	Points per $ spent 0.75	Interest-free period Up to 55 days on purchases	Balance transfer rate p.a. N/A	Annual fee $375	Up to 150,000 Bonus Points ABN holders w/ $75k revenue. Get up to 150,000 bonus Qantas Points when you meet the spend requirements, uncapped Qantas Points and complimentary travel insurance. Plus, a fast-track to Qantas Business Rewards Level 2.	Go to site More info Compare product selectionCompare	loading
Latitude 28° Global Platinum Mastercard Latitude Rewards	Purchase rate p.a. 27.99%	Bonus points N/A	Points per $ spent N/A	Interest-free period Up to 55 days on purchases	Balance transfer rate p.a. 6.99% for 12 months with 3% balance transfer fee, then 29.99%	Annual fee $0 first year ($96 after)	0% Foreign Currency Conversion Fees & $0 First-Year Annual Fee $260 bonus Latitude Rewards if you spend $2,000+ in the first 3 months & reward of up to $240 each year on eligible international transactions. $0 first-year annual fee. T&Cs apply. New customers only, must be approved by 26 February 2026.	Go to site More info Compare product selectionCompare	loading
American Express Platinum Business Card Most LovedAmerican Express Membership Rewards	Purchase rate p.a. 0%	Bonus points 300,000	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	300,000 Bonus Points Limited-time offer: Get 300,000 Bonus Membership Rewards Points when you spend $12,000 on eligible purchases in the first 3 months. New American Express card members only. T&Cs apply. ABN holders w/ $75,000 revenue.	Go to site More info Compare product selectionCompare	loading
American Express Velocity Platinum Card Most LovedVelocity Frequent Flyer	Purchase rate p.a. 23.99%	Bonus points 60,000	Points per $ spent 1.25	Interest-free period Up to 55 days on purchases	Balance transfer rate p.a. N/A	Annual fee $440	60,000 Bonus Velocity Points Earn 60,000 bonus Velocity Points when you spend $3,000 on eligible purchases in the first 3 months, plus up to 100 bonus Status Credits.	Go to site More info Compare product selectionCompare	loading
Latitude Low Rate Mastercard - Purchase Offer Latitude Rewards	Purchase rate p.a. 0% for 9 months, then 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. 6.99% for 12 months with 3% balance transfer fee, then 29.99%	Annual fee $69	0% Purchase Offer Enjoy 0% p.a. on purchases for the first 9 months and 3% back in Latitude Rewards. T&Cs, annual card fee and other charges apply. Applies to general purchases only. Excludes any other offers. New customers only approved by 12 January 2026.	Go to site More info Compare product selectionCompare	loading
American Express Essential Rewards Credit Card Most LovedAmerican Express Membership Rewards	Purchase rate p.a. 23.99%	Bonus points 40,000	Points per $ spent 1	Interest-free period Up to 55 days on purchases	Balance transfer rate p.a. N/A	Annual fee $108	Earn 40,000 Bonus Membership Rewards Points when you spend at least $3,000 on eligible purchases within the first 3 months. New American Express card members only. T&Cs apply.	Go to site More info Compare product selectionCompare	loading
ANZ Rewards Platinum ANZ Rewards Program	Purchase rate p.a. 20.99%	Bonus points 125,000	Points per $ spent 1.5	Interest-free period Up to 44 days on purchases	Balance transfer rate p.a. 21.99%	Annual fee $149	Up to 125,000 Bonus Points and $50 back Earn up to 125,000 bonus ANZ Reward Points: 85,000 points + $50 back when you spend $3,500 in the first 3 months from approval and 40,000 points when you keep your card open for 15 months from activation.	Go to site More info Compare product selectionCompare	loading
ANZ Business Black ANZ Rewards Program	Purchase rate p.a. 20.24%	Bonus points 150,000	Points per $ spent 1.5	Interest-free period Up to 55 days on purchases	Balance transfer rate p.a. N/A	Annual fee $375	Up to 150,000 Reward Points ABN holders w/ $75k revenue. Earn up to 150,000 extra ANZ Reward Points when you meet the spend requirements (worth over $500 digital gift card) and 24/7 access to ANZ Global Business Concierge.	Go to site More info Compare product selectionCompare	loading
American Express Velocity Escape Plus Card Most LovedVelocity Frequent Flyer	Purchase rate p.a. 23.99%	Bonus points 30,000	Points per $ spent 1	Interest-free period Up to 55 days on purchases	Balance transfer rate p.a. N/A	Annual fee $95	30,000 bonus Velocity Points Get 30,000 bonus Velocity Points when you spend $3,000 on eligible purchases in the first 3 months, plus a $50 Virgin Australia Statement Credit. New American Express card members only. T&Cs apply.	Go to site More info Compare product selectionCompare	loading
Westpac Altitude Velocity Platinum Velocity Frequent Flyer	Purchase rate p.a. 20.99%	Bonus points 100,000	Points per $ spent 0.35	Interest-free period Up to 45 days on purchases	Balance transfer rate p.a. N/A	Annual fee $250	Up to 100,000 Bonus Velocity Points Receive up to 100,000 bonus Velocity Points (70,000 points in year 1 when you spend $4,000 on eligible purchases in the first 90 days and additional 30,000 points when you meet the same spend requirement in year 2).	Go to site More info Compare product selectionCompare	loading

Showing 22 of 22 results

Sources

Thank you for your feedback!

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

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

Amy's expertise

Amy has written 505 Finder guides across topics including:

Credit cards
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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.

Is it better to use PayPal or a credit card?