PayPal vs credit cards: What's safer for online shopping?

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 feature	PayPal	Credit 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 expiry date
The card verification value (the CVV or CVC).

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.

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."

Graham Cooke

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 23

Name	Purchase rate p.a.	Bonus points	Points per $ spent	Interest-free period	Balance transfer rate p.a.	Annual fee
Westpac Low Rate Card	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 26 months with 2% balance transfer fee, then 21.99%	Annual fee $59	Go to site More Info Compare	0% Balance Transfer Offer Save with a 0% p.a. interest rate on balance transfers for 26 months (with a 2% BT fee). Plus, a low 13.74% p.a. purchase interest rate.
St.George Vertigo Card	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 1% balance transfer fee, then 21.99%	Annual fee $55	Go to site More Info Compare	0% Balance Transfer Offer Get a 0% p.a. interest rate on balance transfers for 24 months (with a one-time 1% balance transfer fee).
Kogan Money Card – Exclusive Offer Exclusive Kogan Rewards Program	Purchase rate p.a. 9.99% for 18 months, then 21.99%	Bonus points N/A	Points per $ spent 1	Interest-free period Up to 44 days on purchases	Balance transfer rate p.a. 0% for 18 months with 1% balance transfer fee, then 22.74%	Annual fee $0	Go to site More Info Compare	0% Balance Transfer & 9.99% Purchase Rate Offers Save with 0% p.a. interest on balance transfers (with a 1% BT fee) and 9.99% p.a. on purchases, both for 18 months, plus, an ongoing $0 annual fee.
NAB Rewards Platinum Card – Velocity Points Velocity Frequent Flyer	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)	Go to site More Info Compare	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.
Virgin Australia Velocity Flyer Card - Balance Transfer Offer Finder Award Velocity Frequent Flyer	Purchase rate p.a. 20.74%	Bonus points N/A	Points per $ spent 0.66	Interest-free period Up to 44 days on purchases	Balance transfer rate p.a. 0% for 24 months with 1% balance transfer fee, then 20.99%	Annual fee $149	Go to site More Info Compare	0% Balance Transfer Offer Get 0% p.a. on balance transfers for 24 months (with 1% BT fee) and $129 Virgin Australia Gift Voucher.
Westpac Altitude Qantas Black Qantas Frequent Flyer	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	Go to site More Info Compare	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).
NAB Low Rate Credit Card	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 24 months with 3% balance transfer fee, then 21.74%	Annual fee $59	Go to site More Info Compare	0% Balance Transfer Offer Get a 0% p.a. interest rate on balance transfers for the first 24 months (with a 3% BT fee).
ANZ Rewards Black Credit Card Finder Award ANZ Rewards Program	Purchase rate p.a. 20.99%	Bonus points 180,000	Points per $ spent 2	Interest-free period Up to 44 days on purchases	Balance transfer rate p.a. 21.99%	Annual fee $375	Go to site More Info Compare	180,000 Bonus Points & $150 back Get 180,000 bonus ANZ Reward Points (worth $800+ in digital gift cards) and $150 back when you spend $3,000 in the first 3 months.
Coles No Annual Fee Mastercard Flybuys	Purchase rate p.a. 20.74%	Bonus points 10,000	Points per $ spent 0.5	Interest-free period Up to 55 days on purchases	Balance transfer rate p.a. N/A	Annual fee $0	Go to site More Info Compare	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.
NAB Rewards Platinum Card NAB Rewards	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 $45 first year ($195 after)	Go to site More Info Compare	Up to 100,000 Bonus Points & First-Year Annual Fee Discount 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.
Bankwest Breeze Platinum Mastercard	Purchase rate p.a. 12.99%	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 3% balance transfer fee, then 12.99%	Annual fee $59	Go to site More Info Compare	0% Foreign Transaction Fees Get 0% p.a. interest on balance transfers for 24 months (with a 3% BT fee). Plus 0% foreign fees and complimentary overseas travel insurance.
Qantas American Express Ultimate Card Qantas Frequent Flyer	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	Go to site More Info Compare	50,000 bonus Qantas Points Get a yearly $450 Travel Credit and 50,000 bonus Qantas Points when you spend $3,000 on eligible purchases in the first 3 months.
ANZ Platinum Credit Card	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)	Go to site More Info Compare	$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.
Qantas Premier Everyday Qantas Frequent Flyer	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	Go to site More Info Compare	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.
American Express Qantas Business Rewards Card Qantas Business Rewards	Purchase rate p.a. 0%	Bonus points 130,000	Points per $ spent 1.25	Interest-free period Up to 51 days on purchases	Balance transfer rate p.a. N/A	Annual fee $450	Go to site More Info Compare	130,000 Bonus Qantas Points (ABN holders w/ $75k revenue). Earn 130,000 bonus Qantas Points when you spend $3,000 on eligible purchases in the first 2 months.
Bankwest Breeze Classic Mastercard	Purchase rate p.a. 12.99%	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 3% balance transfer fee, then 12.99%	Annual fee $49	Go to site More Info Compare	Long-Term 0% Balance Transfer Offer Save with 0% p.a. on balance transfers for 24 months (with a 3% BT fee).
ANZ Low Rate - Credit Back Offer	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	Go to site More Info Compare	$250 Credit back Get $250 back on your card when you spend $1,500 on eligible purchases in the first 3 months.
Westpac Altitude Platinum Card Westpac Altitude Rewards	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)	Go to site More Info Compare	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).
Latitude 28° Global Platinum Mastercard - Rewards Offer Latitude Rewards	Purchase rate p.a. 27.99%	Bonus points N/A	Points per $ spent N/A	Interest-free period Up to 55 days on purchases	Balance transfer rate p.a. N/A	Annual fee $96	Go to site More Info Compare	0% Foreign Currency Conversion Fees Get $200 bonus Latitude Rewards when you spend $2,000 or more on eligible transactions every statement period in the first 3 months from approval. Offer ends 31 December 2024.
American Express Platinum Business Card Finder Award Membership Rewards Ascent Premium	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)	Go to site More Info Compare	250,000 Bonus Points ABN holders w/ $75,000 revenue. Get 250,000 Membership Rewards Bonus Points when you spend $12,000 on eligible purchases in the first 3 months. Plus, a first-year annual fee discount.
American Express Velocity Platinum Card Velocity Frequent Flyer	Purchase rate p.a. 23.99%	Bonus points 60,000	Points per $ spent 1.25	Interest-free period Up to 55 days on purchases	Balance transfer rate p.a. N/A	Annual fee $440	Go to site More Info Compare	60,000 Bonus Velocity Points Enjoy 60,000 bonus Velocity Points, up to 100 bonus Status Credits and up to 2.25 Velocity Points per $1 spent. Plus, a return domestic flight each year.
American Express Essential Rewards Credit Card Membership Rewards	Purchase rate p.a. 23.99%	Bonus points 40,000	Points per $ spent 1	Interest-free period Up to 55 days on purchases	Balance transfer rate p.a. N/A	Annual fee $108	Go to site More Info Compare	Offers 40,000 Bonus Membership Rewards Points when you spend at least $3,000 on eligible purchases within the first 3 months.
American Express Velocity Escape Plus Card Velocity Frequent Flyer	Purchase rate p.a. 23.99%	Bonus points 20,000	Points per $ spent 1	Interest-free period Up to 55 days on purchases	Balance transfer rate p.a. N/A	Annual fee $95	Go to site More Info Compare	20,000 bonus Velocity Points Get 20,000 bonus Velocity Points when you meet the spend requirement, receive $50 statement credit and earn up to 1.75 Velocity Points per $1 spent.

Showing 23 of 23 results

Thank you for your feedback!

To make sure you get accurate and helpful information, this guide has been edited by David Gregory as part of our fact-checking process.

Written by

Amy Bradney-George

Editor

Amy Bradney-George was the senior writer for credit cards at Finder, and editorial lead for Finder Green. She has over 16 years of editorial experience and has been featured in publications including ABC News, Money Magazine and The Sydney Morning Herald. See full bio

Amy's expertise

Amy has written 565 Finder guides across topics including:

Credit cards
Frequent flyer
Credit score
BNPL
Money management
Sustainability

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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.

Is it better to use PayPal or a credit card?