How to earn reward points when you shop with PayPal

Add a rewards credit card to your account and you can earn Qantas Points, Membership Rewards and more per $1 spent through PayPal.

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In addition to earning rewards or frequent flyer points when you link your credit card, a PayPal account gives you a secure place to store your payment details. This way 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, you'll just need to click on "PayPal" as the payment option, enter your login details and choose the card you want to use.

Compare rewards credit cards

Name Product Bonus points Rewards program Rewards points per $ spent Purchase rate Annual fee
Citi Premier Qantas Card
100,000
Qantas Frequent Flyer
0.5
21.49% p.a.
$175 annual fee for the first year ($350 p.a. thereafter)
Get 100,000 bonus Qantas Points when you spend $4,000 in the first 90 days and a first-year annual fee discount.
Kogan Money Black Card
N/A
Kogan Rewards Program
1
20.99% p.a.
$0
Up to $400 Kogan.com Credit: $100 on your first eligible spend in 30 days and $300 when you spend $1,500 in 90 days.
Citi Rewards Card - Points & Gift Card Offer
90,000
Citi Rewards Program
1
21.49% p.a.
$49 annual fee for the first year ($149 p.a. thereafter)
Receive 90,000 bonus Citi reward Points (worth $400 in gift cards) and a $100 Coles eGift Card when you spend $3,000 in the first 90 days.
ANZ Frequent Flyer Black
130,000
Qantas Frequent Flyer
1
20.24% p.a.
$425
New Cashrewards Max benefit. Up to 130,000 bonus Qantas Points and $255 back when you meet the spend criteria. Plus, complimentary lounge passes.
Qantas Premier Platinum
90,000
Qantas Frequent Flyer
1
19.99% p.a.
$199 annual fee for the first year ($299 p.a. thereafter)
Earn 90,000 bonus Qantas Points when you spend $3,500 in the first 3 months and save with a reduced first-year annual fee.
NAB Qantas Rewards Signature Card
110,000
Qantas Frequent Flyer
1
19.99% p.a.
$295 annual fee for the first year ($395 p.a. thereafter)
Earn up to 110,000 bonus Qantas Points (90,000 when you spend $3,000 in the first 60 days and 20k after 12 months).
Westpac Low Rate Card - Cashback Offer
N/A
N/A
13.74% p.a.
$0 annual fee for the first year ($59 p.a. thereafter)
Get $400 cashback when you spend $4,000 on eligible purchases within the first 120 days. Plus, a $0 first-year annual fee.
Citi Premier Card
130,000
Citi Rewards Program
1
21.49% p.a.
$150 annual fee for the first year ($300 p.a. thereafter)
Enjoy 130,000 bonus points (worth $450 in eGift cards) when you spend $4,000 within the first 90 days. Plus, a first-year annual fee discount.
American Express Qantas Business Rewards Card - Exclusive Offer
150,000
Qantas Business Rewards
1.25
0% p.a.
$0 annual fee for the first year ($450 p.a. thereafter)
ABN holders w/ $75,000 revenue. Receive 150,000 bonus Qantas Points when you spend $3,000 in the first 2 months. Plus, a $0 first-year annual fee. Ends 22 Oct 2021.
Qantas American Express Ultimate Card
110,000
Qantas Frequent Flyer
1.25
20.74% p.a.
$450
Receive 110,000 bonus Qantas Points and $200 back on your card when you spend $3,000 in the first 3 months. Plus, a yearly $450 Travel Credit. Ends 27 Oct 2021.
St.George Amplify Platinum - Qantas
60,000
Qantas Frequent Flyer
0.5
19.74% p.a.
$99
Earn 60,000 bonus Qantas Points, plus enjoy 0% p.a. on balance transfers for 15 months with a 1% BT fee.
Virgin Australia Velocity Flyer Card - Balance Transfer Offer
N/A
Velocity Frequent Flyer
0.66
20.74% p.a.
$0 annual fee for the first year ($129 p.a. thereafter)
Get 0% p.a. on balance transfers for 28 months and a $0 annual fee in the first year.
Qantas American Express Discovery Card
10,000
Qantas Frequent Flyer
0.75
20.74% p.a.
$0
Get 10,000 bonus Qantas Points when you spend $750 within 3 months, plus a $0 annual fee for the life of the card. Ends 27 Oct 2021.
American Express Platinum Edge Credit Card
50,000
Membership Rewards
1
20.74% p.a.
$0 annual fee for the first year ($195 p.a. thereafter)
Earn 50,000 bonus points when you spend $1,500 within the first 3 months. Plus, $200 Travel Credit each year. Ends 19 Oct 2021.
Westpac Altitude Platinum Card
130,000
Westpac Altitude Rewards
1
20.49% p.a.
$49 annual fee for the first year ($150 p.a. thereafter)
Get 130,000 bonus Altitude Points (worth $450 cashback) when you spend $3,000 in the first 90 days, a 0% balance transfer offer and a $49 discounted annual fee.
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Compare up to 4 providers

How can I link a credit card to my PayPal account?

You can add any valid American Express, Mastercard or Visa 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", 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 authorisation charge that PayPal uses to confirm the account is valid. Once that's confirmed, the $1 charge is released (so it's never actually taken from your account).

What purchases will earn points through PayPal?

In most cases, 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.

The terms and conditions for credit card reward schemes vary when it comes to "eligible transactions" that earn points, so check with your card provider for more information.

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

Pros

  • 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. For example, Telstra applies a processing fee for payments made by card, but charges no fees for PayPal payments, even if you choose to pay through a linked credit card.
  • Amex acceptance. If you have an American Express card, you may be able to get around the acceptance limitations and surcharges that some online stores have by choosing to pay through PayPal and then selecting the Amex card as your preferred option.

Cons

  • 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. Find out which stores accept PayPal with this guide.
  • 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 scheme 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. This is 3.5% above the exchange rate for purchases in US or Canadian dollars, or 4% above the exchange rate for purchases in any other currency, which could be higher than the rates offered by your credit card provider. 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 through this link: https://www.paypal.com/cgi-bin/webscr?cmd=_manage-paylist
  • Points processing. While your payments will go through straight away with PayPal, it could take a day or so for the transaction and points to show up on your credit card account.
  • 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.

Compare PayPal and credit card security features

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

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8 Responses

    Default Gravatar
    EbonyJune 14, 2016

    Hello

    Can you still earn points on the money you send to “Family and Friends” using your credit card as the manner of payment through Paypal?

    Thanks.

      Avatarfinder Customer Care
      MayJune 14, 2016Staff

      Hi Ebony,

      Thanks for your inquiry.

      Generally, credit cards will let you earn points if you use them on eligible purchases and not on cash advances. Please note that credit card companies view fund transfer as a cash advance. This means that when you send money to your family and friends using your credit card through your PayPal account, you won’t be able to earn points from it.

      Cheers,
      May

    Default Gravatar
    ashJune 10, 2016

    how can I get into reward program in paypal if I have no credit card and only link with bank account and how can I use that point ?

      Avatarfinder Customer Care
      DeeJune 10, 2016Staff

      Hi Ash,

      Thanks for your comment.

      With Paypal, you can only earn points when you link your credit card to your Paypal account. PayPal accepts a number of credit cards including Visa, MasterCard, American Express, Diner’s Club and more. However, it is important to note that certain cards like procurement and private label credit cards
      are not compatible with PayPal Merchant Services.

      Cheers,
      Anndy

    Default Gravatar
    F.July 21, 2014

    Is there an annual fee to use PayPal???

      Avatarfinder Customer Care
      ShirleyJuly 22, 2014Staff

      Hi F,

      Thanks for your question.

      At the time of writing there is no annual fee to use Paypal.

      However, certain transactions could incur a fee – such as when buying internationally, a currency conversion fee may apply.

      Cheers,
      Shirley

    Default Gravatar
    KarenMarch 11, 2013

    Both my bank account and credit card are already linked to my Paypal account. When I use Paypal it takes the money from my bank account. I have followed your directions but can’t find a way to make Paypal take funds from my credit card rather than bank account. Both cards are listed as primary. How do I change from which source funds are taken?

      Avatarfinder Customer Care
      MarcMarch 11, 2013Staff

      Hello Karen,
      thanks for the question!

      Sometimes when a bank account and credit card are linked to a Paypal account, Paypal will only use the credit card as a back up. One way of fixing this is to physically change your funding option during payment for an item. After you make a purchase, you’ll receive an invoice through Paypal. On this invoice there’ll be a link that displays your payment method, so click the link that says “more funding options”. This will allow you to select your credit card to pay.

      I hope this helps,
      Marc.

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