How to shop with PayPal and earn reward points

Enjoy fast and secure payments online while earning points per $1 spent when you link your PayPal and rewards credit card accounts.

If you shop online, you probably already have a PayPal account. This service allows you to securely store and use your card or bank account details so you don’t have to enter them every time you make a purchase. This also helps limit where your card details are stored online to reduce the risk of card theft and fraud.

Use this guide to learn how to set up your PayPal account and link your credit card/s or other accounts to the service. We also look at how you can earn points by linking a rewards credit card to your PayPal account and weigh up the pros and cons so that you can decide if using PayPal will help you earn more credit card rewards.

How does PayPal work?

PayPal gives you a way to electronically transfer funds to individuals or businesses via a secure network. PayPal partners with numerous online stores worldwide so that you can pay for your shopping simply by clicking on the PayPal logo at checkout and logging in to your PayPal account where your card details are safely encrypted.

This speeds up the payment process because you won’t have to enter your card or account details at the checkout. It also reduces the risk of theft through PayPal’s password protection and account encryption.

How can I sign up for PayPal?

Setting up a PayPal account is free and transaction fees are paid by merchants instead of shoppers. Here’s how to sign up:

  1. Go to www.paypal.com.au.
  2. Click on the “Sign up” button.
  3. Select your country (Australia by default).
  4. Enter your email address and a password (make sure this is a complex mix of numbers and upper- and lower-case letters).
  5. Click “Sign up now”.

You will receive a confirmation email with a link to verify your account. You can now link your credit cards, debit cards and bank accounts to the service.

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

You can link your credit cards, debit cards or bank accounts to your PayPal account in three steps:

  1. Log in to your PayPal account.
  2. Click on “Wallet” at the top of the page.
  3. Select “+ Link a card” or “+ Link a bank account” and follow the prompts. You will need to provide your account details to verify each account that you link to the service.

Each time you pay for a purchase, log in to PayPal and select which card or account to use.

Earning points on your credit card when using PayPal

If you link your rewards credit card to your PayPal account, you’ll be able to earn points per $1 spent on eligible purchases. Just select the rewards card when you’re making a PayPal payment through the service.

Points will be credited once the transaction has been processed by your credit card provider. Remember that reward schemes terms and conditions 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


  • Reward points. You can earn reward points via PayPal just as if you were paying directly with your credit card.
  • Protection. As well as fraud and theft prevention, PayPal also ensures 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 key in your PayPal login and password.
  • Global acceptance. PayPal offers a global payment system that can convert 25 currencies across 202 countries. At the checkout, you can choose your card provider’s currency conversion rate, but PayPal’s rates are generally more favourable than bank rates.


  • 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. Since not all online stores offer PayPal, you will sometimes still have to manually key in your bank account and card details.
  • Overspending. The ease of making payments with PayPal can cause you to lose track of exactly how much you’ve spent.
  • Reward variations. Your card’s reward scheme may differ when using PayPal compared to using your card directly. Refer to your credit card provider for details.

If you’re keen to use PayPal and earn points with your credit card, give your card provider a call to find out if your card’s earn rate differs with PayPal transactions. Remember, when you’re shopping with PayPal, make sure you keep track of your credit card balance to avoid overspending online.

Frequently asked questions

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Amy Bradney-George

Amy is a senior writer at finder.com.au with more than 10 years experience covering credit cards, personal finance and various lifestyle topics. When she’s not sharing her knowledge on money matters, Amy spends her time as an actress.

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8 Responses

  1. Default Gravatar
    June 14, 2016


    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?


    • finder 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. Since credit card companies view fund transfer as a cash advance, 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.


  2. 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 ?

    • finder Customer Care
      LouJune 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.


  3. Default Gravatar
    F.July 21, 2014

    Is there an annual fee to use PayPal???

    • finder 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.


  4. 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?

    • finder 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,

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