Personal Finance Tips

PayPal vs. credit cards for shopping online in the UK

Gert Svaiko

15.01.24 (updated more than 1 year ago)

Read time 3 minutes

Love a little online shopping? If you’re a fan of buying online, you’ll need to know the best way to pay.

Here in the UK, there are a few different payment options available at checkout (although it depends on the retailer). Two of the most popular are PayPal and credit cards, along with debit cards of course.

In this guide, we’ll be looking at PayPal vs. credit cards, to see which is the best choice to pay for your online purchase. We’ll run through pros and cons, and compare the two on security, fees, buyer protection and much more.

We’ll also show you a great alternative for making online and real-world purchases in multiple countries and currencies - the Wise card from the money services provider Wise.

Pros and cons for using PayPal

First up, we have PayPal, the popular online payment service. Let’s dive straight into PayPal pros and cons.

Pros:

Widely accepted, especially when shopping online
Very secure
No device restrictions - use PayPal on any phone, tablet or laptop
Can be used to send and receive online payments too - including international payments
Easy to use accounts with multiple features
Pay in-store with the PayPal app and QR codes
Free to open an account and free for many UK transactions (including online shopping in GBP)¹
Buyer and Fraud Protection policies²
PayPal Credit options available (subject to eligibility)

Cons:

Fees of 3% for currency conversions, required when buying from an overseas website in a different currency¹
Complicated fees structure for other types of payments
Must open a PayPal account to use it as a payment method
Not as easy and convenient for in-store payments as contactless mobile wallets

Pros and cons for using credit cards

Now, let’s give credit cards the same treatment. Here are the main pros and cons to consider before using a credit card to shop online.

Pros:

Spread the cost of large purchases
Widely accepted
Secure payments
Buyer protection for purchases between £100 and £30,000, under Section 75 of the Consumer Credit Act³
Some cards offer cashback or other rewards
Can be used for in-store purchases too

Cons:

Interest is payable on credit card balances (unless your card has a 0% interest promotional period)
Credit cards charge high fees for late or missed payments
Some retailers charge their own extra processing fee for credit card payments

Another thing to bear in mind - if you want to shop in a different country or currency, you’ll need to choose the right credit card for spending abroad. Some are great for overseas spending, others not so much.

📚 Read more: Virtual debit cards you can open in the UK

PayPal vs. credit cards – the comparison

To help you make up your mind, here’s a full comparison of Paypal vs. credit cards on things like fees, security, limits and buyer protection:

	PayPal	Credit cards
Availability	All users (age 18+) Widely accepted online	All users (age 18+) Widely accepted online
Fees	- None for UK transactions¹ - 5% fee for international payments¹ - 3% currency conversion charge may also apply¹	Fees may apply for: - Exceeding your credit limit - Late payments - Retailer processing fees (if applicable) - Monthly or annual card maintenance fee (if applicable)
Limits	None	Your personal credit limit (i.e. £1,200 or £2,400)
Security	Uses data encryption and has Buyer Protection policies²	Visa and Mastercard use sophisticated security technology and anti-fraud measures
Privacy	Protects data with encryption and secure servers⁴	Uses secure payment gateways to process transactions
Buyer protection	Buyer and Fraud Protection policies²	Section 75 and chargeback protection³ Visa/Mastercard Zero Liability policies
Customer support	PayPal Resolution Centre, message and phone support⁵	Support available through card issuer

Tips for safe online shopping

Here are some tips to keep you safe while shopping online:

Use a secure private Wi-Fi or mobile data connection - avoid public Wi-Fi
Check that the website is genuine. Look for the padlock symbol and ‘HTTPS’ in the website address bar, which tells you that the website uses an encrypted connection.
Do some research. If the website is unfamiliar, use sites like TrustPilot to check customer reviews and see if there’s anything to be concerned about. You can also look the business up on Companies House.
Use a strong password, if you’re creating an account (and especially if you also choose to save your card details for next time).

Wise – An alternative to PayPal and credit cards

Want to shop online in your choice of 40+ currencies? And how about spending like a local in 160+ countries? The Wise card could be just what you’re looking for.

Open a Wise account online and you can order your own contactless Wise card or get it as a virtual card.

It’s an international debit card that can be used worldwide, including online. Whenever you spend in a different currency, the card automatically converts the currency at the mid-market exchange rate – with no margin added on top.

You’ll only pay a small fee* for a currency conversion, or it’s free if you already have the currency in your Wise account. There are no commission charges, foreign transaction fees or other hidden costs.

So which is the best choice for shopping online - PayPal or a credit card? It may all depend on what options are available with each particular retailer, and which credit card you have.

But both offer secure payments and buyer protection, which should give you some peace of mind when shopping online.

Just remember to follow our tips for safe online shopping. If unsure of a particular website, it could be safer to steer clear until you can do some further research.

Sources used for this article:

PayPal - PayPal fees
PayPal - PayPal Safety and Security
Money Helper - How section 75 and chargeback protection work for your credit and debit cards
Journalism - PayPal vs Apple Pay: the battle for your digital wallet
PayPal - Contact Us

Sources checked on 14-Nov-2023.

*Please see terms of use and product availability for your region or visit Wise fees and pricing for the most up to date pricing and fee information.

This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.

We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.