PayPal and credit cards are both popular payment options among e-commerce consumers worldwide. These payment methods are similar in providing ease of use and convenience, though there are many differences.

So, which should you use? It depends on your needs and preferences, such as security features. If you’re deciding whether to use PayPal vs. a credit card for your online purchase, it is helpful to understand the pros and cons of each payment option.

What is PayPal and how does it work?

Since its introduction in 1998, PayPal has grown into one of the largest payment gateways on the internet, processing billions of payment transactions annually.

It is an international payment processor that allows users to send and receive money online. Users may add money to their PayPal account balance from a bank account or with a credit or debit card to make purchases.

Since your financial information is not shared with the merchant when you pay with PayPal, it is considered a safe and secure way to make online payments. Additionally, PayPal offers buyer protection for certain purchases made through the platform.

If you don’t receive the item that you purchased, or if it’s not as described, you can file a claim with PayPal to resolve the issue.

What is a credit card and how does it work?

A credit card provides a line of credit that allows people to make purchases without putting up cash up front. Credit cards work like a loan where the card issuer extends a line of credit to a consumer whose credit score helps determine their maximum credit limit.

Each credit card comes with different terms and conditions, which state the interest rate, annual fees, and other applicable fees.

Cardholders then pay off the statement balance in full each month or spread payments over several months. Ensure you make payments on time to avoid accumulating credit card debt and high-interest charges.

Most credit cards offer many benefits, such as checking your credit score or earning rewards like cash back.

Which payment method is safer: PayPal vs. credit card?

When it comes to online payments, security is always a top concern. So which is more secure: PayPal or credit cards? Both payment options offer security features that potentially protect consumers from fraudsters.

PayPal uses industry-standard end-to-end encryption and two-factor authentication to prevent identity theft. In addition, if you purchase something on a platform using PayPal, you will receive an email confirming your payment.

PayPal users can connect their bank account, credit card, or debit card to their PayPal account and make payments with just a few clicks. Both the PayPal website and the PayPal apps are encrypted, ensuring that all information is secure and private.

On the other hand, credit cards are compatible with digital wallets, which take advantage of advanced encryption and tokenization technology.

Popular digital wallet options include Google Wallet, Apple Pay, and Samsung Wallet. Many online and in-person retailers and restaurants accept digital wallet payments.

Some credit cards offer a virtual credit card feature where cardholders can generate a one-time, disposable credit card number for online purchases. This keeps consumers’ real credit card numbers safe from being leaked during a data breach.

Is it better to pay using a credit card or PayPal?

There are pros and cons to using either PayPal or a credit card. With PayPal, you can quickly complete purchases without entering sensitive financial information, but you may be charged fees for certain transactions.

Credit cards offer more protection against fraud but can also come with high-interest rates. Ultimately, your best payment method depends on your individual needs and preferences.

There are a few key reasons to use a credit card instead of PayPal. First, you can build up your credit history and improve your credit score with a credit card. This can help you qualify for better interest rates on loans, such as a mortgage, in the future.

Using a credit card can help you rack up cash back or rewards you can redeem for travel or other perks. Plus, if you have a dispute with a merchant, you can file a chargeback with your credit card issuer to get your money back.

The Federal Trade Commission (FTC) also provides consumer protections for cardholders if a card is lost or stolen.

Many credit cards do not charge a foreign transaction fee, so you don’t have to pay anything extra when you purchase items from other countries. Conversely, PayPal charges a conversion fee when it converts foreign currencies into U.S. dollars.

This isn’t always clear to the consumer, but fortunately, it’s possible to sidestep this fee by paying with a credit card instead.

Additionally, PayPal’s currency conversion rate is higher than most other credit card companies, making it harder to purchase overseas. You can usually find the exchange rate on PayPal’s payment page at the time of the transaction, but you may have to pay additional fees.

What is a good credit card to apply for?

Vital Card provides these features if your financial goals involve earning cash back and managing your spending.

With Vital cash rewards, earn 1.5 percent cash back on everyday purchases and up to 3 percent cash back when you successfully refer friends and family to the Vital community.

Take advantage of Vital’s personalized financial tracking tools to manage your expenses and track your credit health effortlessly. Stay on top of due dates by scheduling payments in advance. Regarding security, the credit card is compatible with popular digital wallets, including Apple Pay, Google Wallet, and Samsung Wallet. Join the Vital Card waitlist today.


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Vital Card blog posts are intended for informational purposes only and should not be considered financial or any other type of advice.