How to send paypal credit to yourself

While many business people prefer to use traditional money transfer and payment methods, such as checks, direct deposits and credit cards, these options don't work for everyone. Occasionally, you may find that a freelancer, contractor or even a vendor prefers to receive payment via PayPal. Fortunately, PayPal makes it easy to transfer funds even if you don't have an account yourself.

PayPal Invoices and Payment Requests

The person or business requesting the funds needs to make the first move by sending you an invoice or payment request. PayPal offers two options:

• Payment request: The requester can send a payment request directly from his account.
  
• Invoice: PayPal offers a customizable, itemized invoice option to its users. There are also third-party bookkeeping services that integrate PayPal requests into their invoices. If you prefer to receive an itemized invoice over a simple payment request email, let the requester know.
  

It's important to make sure that the other party has your correct email address. Also, sometimes PayPal email requests can get buried in a spam or promotions folder. Ask the sender to notify you by text, phone or email after submitting the request.

Warning

PayPal offers other money request options via mobile app and the PayPal.me link, a customized link that PayPal account holders can use to request and receive money from others offline or online via email, text, chat, or social media posts. The downside to these methods, however, is that both parties must have a PayPal account to use them. If you receive a PayPal.me link from someone, you can either ask for a payment request or follow the PayPal.me link for instructions on how to sign up for an account.

Making the Payment

Once you receive the payment request or invoice, review the payment amount to make sure it's correct. The invoice or request will contain the option of paying by debit or credit card. Click on that link and follow the instructions for entering your credit or debit card information. After confirming that your details are correct, you'll be able to submit the payment.

Setting Up a Business PayPal Account

If you suspect that you will be working with this person or business frequently, setting up your own PayPal account might be a good idea, even if you don't plan to use it regularly. When you receive a PayPal invoice payment request or PayPal.me request, you'll be given the option of setting up a new account right then.

Applying for a business account is straightforward: You'll need to provide and confirm your email address. Next, you'll be taken to a screen in which you can enter your business name and contact information. Finally, you'll link your business PayPal account to your bank account to allow for secure funds transfer.

Tip

Even if you aren't excited about working with PayPal right now, invest a few minutes in reading over its business services. You may find using PayPal to be a cost-effective way to accept credit card payments, send invoices and handle mass payments to freelancers.

Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.

PayPal is a convenient way to send money to a friend or family member and was probably the largest force in changing the way we send money to other people. In 2020, 44% of survey respondents in the U.S. had used a service like PayPal to send money to friends or acquaintances in the prior 12 months.

Naturally, you might wonder if you should use a credit card to send money to another person using PayPal. After all, your credit card earns rewards—Why not earn additional cash back or transferable points when sending money?

Generally, the fees PayPal charges to send money to another person using a credit card are greater than the rewards you will earn, making it unattractive to use a credit card to send person-to-person money transfers through PayPal. There are some exceptions to this, but banks are also changing the way these transactions are processed, which might subject you to additional fees. Read on for more details.

PayPal Is Much More Than Person-to-Person Payments

PayPal checkout is integrated onto many websites and many smaller merchants use PayPal to invoice and accept payment for goods and services. Those types of transactions have a separate fee structure and are processed differently than person-to-person transactions. This article specifically covers using PayPal to send money to another person, not to pay for a purchase.

The Deal Breaker: Transaction Fees

One of the biggest drawbacks of using a credit card to send money to another person using PayPal is the processing fee. PayPal charges 2.9%, plus a fixed fee of 30 cents to process a person-to-person money transfer using a credit card. This fee can quickly eclipse any credit card rewards you might earn.

PayPal does not charge this fee for person-to-person money transfers using either your existing PayPal balance or a money transfer from your checking account.

Why Using a Credit Card Might Still Be Attractive

Despite the fee PayPal charges, there are a few cases where you could come out ahead after the credit card fee.

Credit Cards With Rotating 5% Bonus Categories

Some credit cards, such as the Chase Freedom Flex℠ and the Discover it® Cash Back offer rotating categories in which cardmembers enroll to earn 5% cash back. Categories earning bonus cash back change quarterly and have earning caps before their base rate earnings of 1% apply. Both of these cards have historically included PayPal in the bonus cash back offering.

• Discover included PayPal in its 2021 cashback calendar for Q3 (July through September).
• In 2020, Chase included PayPal in its cashback calendar during Q4 (October through December).

Welcome Bonus Spending

If you have recently applied for a credit card that offers a welcome bonus after a certain amount of required spending, it might make sense to use PayPal to send money to another person using a credit card.

Beware The Cash Advance Fee

In 2020, the New York Times reported on a change in the way that money transfer transactions are coded and processed through Visa and Mastercard. This change means that banks can now charge cash advance fees for things like person-to-person money transfers through services like PayPal and Venmo.

Since this change has been implemented, some credit card users have reported being charged a cash advance fee when sending money using PayPal. In addition, Chase has been reported to be sending notices to existing cardmembers updating their terms and conditions to include person-to-person money transfers in the list of transaction types where they charge a cash advance fee.

Bottom Line

Generally, it is not advantageous to send money to another person using PayPal and a credit card.

Unless you are using a credit card that earns 5% back on transactions at PayPal or completing a welcome bonus spending requirement, you will usually pay more in fees than you earn in rewards. In addition, with banks starting to charge cash advance fees for person-to-person payments, there is a chance that your person-to-person payment may end up costing a lot more than the 2.9% fee.

If you are looking to send money to someone using PayPal, send money using your PayPal balance or linked checking account. For PayPal alternatives, consider the five best ways to send money.

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