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.

Amy Bradney-George's headshot

By

Amy Bradney-George

Edited by

David Gregory

Updated

Fact checked

Start comparing

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 featurePayPalCredit 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 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.

Graham Cooke's headshot
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."

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.

1 - 23 of 24
Updated regularly
Product Purchase rate p.a. Bonus points Points per $ spent Interest-free period Balance transfer rate p.a. Annual fee
St.George Vertigo Card
Finder Award
St.George Vertigo Card image
Purchase rate p.a.
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.
0% for 24 months with 2% balance transfer fee, then 21.99%
Annual fee
$55
0% Balance Transfer Offer
Get a 0% p.a. interest rate on balance transfers for 24 months (with a one-time 2% balance transfer fee).
Go to siteMore info
Westpac Low Rate Card
Westpac Low Rate Card image
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 24 months with 2% 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 24 months (with a 2% BT fee). Plus, a low 13.74% p.a. purchase interest rate.
Go to siteMore info
NAB Rewards Platinum Card – Velocity Points
Velocity Frequent Flyer
NAB Rewards Platinum Card – Velocity Points image
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
$95 first year ($195 after)
Up to 80,000 Bonus Points & First-Year Annual Fee Discount
Get up to 80,000 bonus Velocity Points: 60,000 points when you spend $1,000 in the first 60 days and 20,000 after 12 months. Ends 31 July 2025.
Go to siteMore info
Coles No Annual Fee Mastercard
Flybuys
Coles No Annual Fee Mastercard image
Purchase rate p.a.
20.74%
Bonus points
10,000
Points per $ spent
0.5
Interest-free period
Up to 44 days on purchases
Balance transfer rate p.a.
N/A
Annual fee
$0
10,000 Bonus Flybuys Points
Get 10,000 bonus Flybuys points (worth $50 Flybuys dollars) when you spend $3,000 on eligible purchases in the first 3 months.
Go to siteMore info
Qantas American Express Ultimate Card
Finder AwardQantas Frequent Flyer
Qantas American Express Ultimate Card image
Purchase rate p.a.
23.99%
Bonus points
50,000
Points per $ spent
1.25
Interest-free period
Up to 44 days on purchases
Balance transfer rate p.a.
N/A
Annual fee
$450
50,000 bonus Qantas Points
Get a yearly $450 Travel Credit and 50,000 bonus Qantas Points when you spend $5,000 on eligible purchases in the first 3 months.
Go to siteMore info
ANZ Rewards Black Credit Card
Finder AwardANZ Rewards Program
ANZ Rewards Black Credit Card image
Purchase rate p.a.
20.99%
Bonus points
160,000
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 160,000 Bonus Points & $100 back
Earn up to 160,000 bonus ANZ Rewards Points: 110,000 points + $100 back when you spend $5,000 in the first 3 months from approval, and 50,000 points when you keep your card open for 15 months.
Go to siteMore info
Virgin Money Anytime Rewards Credit Card
Virgin Money Rewards
Virgin Money Anytime Rewards Credit Card image
Purchase rate p.a.
19.99%
Bonus points
80,000
Points per $ spent
1
Interest-free period
Up to 55 days on purchases
Balance transfer rate p.a.
0% for 12 months with 0% balance transfer fee, then 20.99%
Annual fee
$149
80,000 bonus Virgin Money Points & 0% Balance Transfer Offer
Offers 80,000 bonus Virgin Money Points (worth $400 in gift cards) when you spend $3,000 or more on eligible purchases in the first 3 months.
Go to siteMore info
Westpac Altitude Qantas Black
Qantas Frequent Flyer
Westpac Altitude Qantas Black image
Purchase rate p.a.
20.99%
Bonus points
120,000
Points per $ spent
0.75
Interest-free period
Up to 45 days on purchases
Balance transfer rate p.a.
N/A
Annual fee
$370
Up to 120,000 Bonus Qantas Points Offer
Up to 120,000 bonus Qantas Points (90,000 points in year 1 when you spend $6,000 in the first 120 days & 30,000 points after the first spend in year 2).
Go to siteMore info
NAB Rewards Platinum Card
NAB Rewards
NAB Rewards Platinum Card image
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 21.74%
Annual fee
$195
Up to 100,000 Bonus Points
Get up to 100,000 bonus NAB Rewards Points (worth $480 in eGift cards): 80,000 points when you spend $1,000 in the first 60 days and 20,000 after 12 months.
Go to siteMore info
ANZ Platinum Credit Card
ANZ Platinum Credit Card image
Purchase rate p.a.
20.99%
Bonus points
N/A
Points per $ spent
N/A
Interest-free period
Up to 55 days on purchases
Balance transfer rate p.a.
21.99% with 3% balance transfer fee
Annual fee
$0 first year ($87 after)
$100 back & $0 First-Year Annual Fee
Get $100 back on your card when you spend $2,000 on eligible purchases in the first 3 months and a $0 first-year annual fee. Plus, complimentary overseas travel insurance.
Go to siteMore info
Qantas Premier Everyday
Qantas Frequent Flyer
Qantas Premier Everyday image
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 2% balance transfer fee, then 21.99%
Annual fee
$99
8,000 Bonus Qantas Points
Get 2 bonus Qantas Points per $1 spent on eligible purchases in the first 4 months (up to 8,000 points), plus complimentary insurance.
More info
American Express Qantas Business Rewards Card
Finder AwardQantas Business Rewards
American Express Qantas Business Rewards Card image
Purchase rate p.a.
0%
Bonus points
150,000
Points per $ spent
1.25
Interest-free period
Up to 51 days on purchases
Balance transfer rate p.a.
N/A
Annual fee
$225 first year ($450 after)
150,000 Bonus Qantas Points
Limited time offer: Earn 150,000 bonus Qantas Points when you spend $6,000 on eligible purchases in the first 3 months. Plus, a half off annual fee in the first year. ABN holders w/ $75k revenue.
Go to siteMore info
NAB Low Rate - Cashback Offer
NAB Low Rate - Cashback Offer image
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 siteMore info
ANZ Low Rate - Credit Back Offer
ANZ Low Rate - Credit Back Offer image
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.
21.99%
Annual fee
$58
$250 Credit back
Get $250 back on your card when you spend $1,500 on eligible purchases in the first 3 months.
Go to siteMore info
Westpac Altitude Platinum Card
Westpac Altitude Rewards
Westpac Altitude Platinum Card image
Purchase rate p.a.
20.99%
Bonus points
120,000
Points per $ spent
1
Interest-free period
Up to 45 days on purchases
Balance transfer rate p.a.
N/A
Annual fee
$99 first year ($175 after)
Up to 120,000 Bonus Points & First-Year Annual Fee Discount
Up to 120,000 bonus Altitude Points (90,000 points in year 1 when you spend $3,000 in the first 90 days & 30,000 points after the first spend in year 2).
Go to siteMore info
American Express Platinum Business Card
Membership Rewards Ascent Premium
American Express Platinum Business Card image
Purchase rate p.a.
0%
Bonus points
250,000
Points per $ spent
2.25
Interest-free period
Up to 55 days on purchases
Balance transfer rate p.a.
N/A
Annual fee
$875 first year ($1,750 after)
250,000 Bonus Points
Limited time offer: Get 250,000 Membership Rewards Bonus Points when you spend $12,000 on eligible purchases in the first 3 months. Plus, a half off annual fee in the first year. ABN holders w/ $75,000 revenue.
Go to siteMore info
American Express Velocity Platinum Card
Velocity Frequent Flyer
American Express Velocity Platinum Card image
Purchase rate p.a.
23.99%
Bonus points
100,000
Points per $ spent
1.25
Interest-free period
Up to 55 days on purchases
Balance transfer rate p.a.
N/A
Annual fee
$440
100,000 Bonus Velocity Points
Limited time offer: Enjoy 100,000 bonus Velocity Points when you spend $3,000 in the first 3 months. Plus, up to 100 bonus Status Credits and up to 2.25 Velocity Points per $1 spent. Ends 30 April 2025.
Go to siteMore info
humm90 Platinum Mastercard - Exclusive Offer
Exclusive
humm90 Platinum Mastercard - Exclusive Offer image
Purchase rate p.a.
26.3%
Bonus points
N/A
Points per $ spent
N/A
Interest-free period
Up to 110 days on purchases
Balance transfer rate p.a.
N/A
Annual fee
$0 first year ($119.40 after)
$400 back & $0 monthly fees for 12 months
Finder Exclusive: Get $400 back, $0 monthly fees for the first 12 months, up to 110 days of interest-free purchases, and 0% foreign transaction fees. Ends 27 April 2025.
Go to siteMore info
American Express Essential Rewards Credit Card
Membership Rewards
American Express Essential Rewards Credit Card image
Purchase rate p.a.
23.99%
Bonus points
60,000
Points per $ spent
1
Interest-free period
Up to 55 days on purchases
Balance transfer rate p.a.
N/A
Annual fee
$108
Limited time offer: Offers 60,000 Bonus Membership Rewards Points when you spend at least $3,000 on eligible purchases within the first 3 months.
Go to siteMore info
ANZ Business Black
ANZ Rewards Program
ANZ Business Black image
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 siteMore info
David Jones Premiere Credit Card
David Jones Rewards
David Jones Premiere Credit Card image
Purchase rate p.a.
23.99%
Bonus points
N/A
Points per $ spent
1
Interest-free period
Up to 55 days on purchases
Balance transfer rate p.a.
N/A
Annual fee
$0 first year ($99 after)
Get a $0 first-year annual fee plus complimentary express delivery and gift wrapping at David Jones.
More info
American Express Velocity Escape Plus Card
Velocity Frequent Flyer
American Express Velocity Escape Plus Card image
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 meet the spend requirement, receive $50 statement credit and earn up to 1.75 Velocity Points per $1 spent. Ends 30 April 2025.
Go to siteMore info
Westpac Altitude Velocity Platinum
Velocity Frequent Flyer
Westpac Altitude Velocity Platinum image
Purchase rate p.a.
20.99%
Bonus points
75,000
Points per $ spent
0.5
Interest-free period
Up to 45 days on purchases
Balance transfer rate p.a.
N/A
Annual fee
$250
75,000 Bonus Velocity Points
Get 75,000 bonus Velocity Points when you spend $4,000 on eligible purchases in the first 90 days.
Go to siteMore info
loading
Back to top
To make sure you get accurate and helpful information, this guide has been edited by David Gregory as part of our fact-checking process.
Amy Bradney-George's headshot
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 543 Finder guides across topics including:
  • Credit cards
  • Frequent flyer
  • Credit score
  • BNPL
  • Money management
  • Sustainability
More resources on Finder

Ask a question

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms Of Service and Finder Group Privacy & Cookies Policy.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

2 Responses

    Default Gravatar
    SilviaJanuary 27, 2025

    Should I use Latitude credit card, PayPal or WISE to pay for accomodation in Slovenia?

      AvatarFinder
      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.

More guides on Finder

Go to site
Get matched with the right card for you