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:
- Go to www.paypal.com.au.
- Click on the “Sign up” button.
- Select your country (Australia by default).
- Enter your email address and a password (make sure this is a complex mix of numbers and upper- and lower-case letters).
- 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:
- Log in to your PayPal account.
- Click on “Wallet” at the top of the page.
- 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
Which credit cards can’t be used with PayPal?
PayPal allows all major credit cards including Visa, Mastercard and American Express. If you receive an error message when trying to link one of these cards, contact PayPal Support with the specific details of your card. Alternatively, you may want to try adding a different card or account.
Are there fees for using a credit card through PayPal?
PayPal applies transaction fees to sellers, not buyers, so there is no additional purchase cost. You will need to pay any applicable currency conversion fees for international purchases.
How can I remove a credit card from my PayPal account?
To unlink a card, log in to PayPal, click on “Wallet” at the top of the page, select the existing card, go to “Edit” and click “Remove card”.
To unlink a bank account, on the same “Wallet” page click on the existing account and select “Remove bank account”.