Can I pay my credit card bill with PayPal?

Unfortunately, it is not possible to use PayPal directly to pay for a credit card bill. But there are other ways to repay a credit card if you have an overdue credit card balance owing, even if you earn an income in a foreign currency.

All about PayPal

PayPal is a popular online payment option that allows you to make payments without sharing financial details, for improved security. This payment service is available to both consumers and businesses, so individuals may check out faster and more securely, and retailers may easily accept payments and manage credit risk.

When you open a PayPal account, you can link one or more credit or debit cards to the platform. Whether you’re using a Visa, Mastercard or American Express (Amex) card to make a credit card payment online, as long as a website accepts PayPal, you won’t need to enter long strings of credit card information, saving you time and effort while helping to protect your information from fraud and scammers.

If the credit card or other payment type linked to your PayPal features a rewards program or cashback scheme, you should still typically be able to benefit from these extra when shopping with PayPal. The PayPal platform may also offer rewards and cashback in certain circumstances.

While you don’t need a bank account to send or receive money through PayPal, you will need a bank account if you want to withdraw money from your PayPal account.

PayPal also offers a Buy Now Pay Later (BNPL) service, PayPal Pay in 4, which lets you purchase items online and pay for it in four equal instalments. Unlike other BNPL services, PayPal Pay in 4 does not charge late fees if you miss a payment, though if you default on your repayments this may affect your credit score. 

Can you use PayPal to pay a credit card bill?

Unfortunately, your credit card issuer may not accept PayPal payments for your credit card bill. Some of the simplest ways to pay a credit card bill are to either transfer the money from your bank account or use BPAY to pay the credit card bill.

Even if you earn an income in a foreign currency, you’ll typically want to use Australian dollars to pay your Australian credit card bill. You may still be able to use PayPal to pay off your credit card debt – but not directly.

PayPal can be used to receive and make payments in different currencies. You can use the PayPal balance to transfer money to your Australian bank account, then pay your credit card bill with these funds. 

The transfer may take anywhere from 1-3 business days. Keep in mind that international transfers via PayPal are also possible; however, the fees may be high.

How else can you repay a credit card bill?

If you are based in Australia, earning an Australian income, it may be simpler to use one of the card issuers’ preferred payment methods, including:

• Payment via direct debit
• Payment via EFT
• Payment via BPAY
• Payment via telephone banking
• Payment via Australian Post
• Payment in branch, in some instances

If you’re struggling with a large overdue credit card balance, keep in mind that only repaying the minimum repayment amount (generally 2% of the balance, or $20, whichever is greater) makes paying off your statement in full much more challenging. 

ASIC MoneySmart’s Credit Card Calculator shows that if you have a $10,000 balance on a credit card charging 18% interest, making only the minimum repayments will take you over 46 years and 1 month to pay off this balance in full. Alternatively, if you paid $500 a month towards this credit card debt, you could pay it off in just two years.

It could be worth looking at your budget and making consistent repayments towards your credit card debt, so you can chip away at this outstanding balance as quickly as possible. It can be very easy to see credit card debt snowball out of control if you’re not careful.

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