We need money for a variety of reasons during the day, yet we do not always have cash on hand. Online money transfers are now feasible thanks to modern technologies. Electronic money transactions include PayPal and credit cards. They have grown so convenient to use that checks and money orders are no longer required.
PayPal Bank Account vs Credit Card
The main differences between a PayPal bank account and a credit card are that of their transaction limit and security. The PayPal bank account is more secure and has a minimum transaction of $0.01 and a maximum transaction of $4000. This is different for business accounts. A credit card is less secure and has a varying credit limit.
A PayPal bank account is run by the PayPal financial company, launched in 2000. It is not a bank and payments are made using the website or mobile application. Normal accounts have a maximum transaction limit of $4000 and business accounts have a limit of $10000. PayPal is less prone to fraud and theft.
A credit card is a physical, rectangular card used for both online and offline transactions. It is issued by an authorized bank and was first used in 1890. It is more prone to fraud and theft since it is easy to lose a physical card. The credit limit of every card varied based on the customer spending limit and the bank.
Comparison Table Between PayPal Bank Account And Credit Card
| Parameters of Comparison | PayPal Bank Account | Credit Card |
| Type of Money Transaction | Payments are made using the website or mobile application | Payments are made using the physical card |
| Transaction Limit | Normal accounts have a maximum transaction limit of $4000 | Different for every card and bank |
| Year of Origination | 2000 | 1890 |
| Proneness to Fraud | Less prone | More prone |
| Type of Company | PayPal is not a bank. It is a financial company | Credit cards are issued by authorized banks |
What is a PayPal Bank Account?
PayPal Enterprises is an American multinational digital payments company that operates an instant online payments system inside the majority of other countries that support online funds transfer, providing an automated replacement for traditional physical methods such as cheques and payment orders.
PayPal is a payment method that allows for online payments as an alternative to traditional paper money. To use this service, you must have a PayPal account, this may be topped up using a savings account or a line of credit Users have the option of sending a PayPal check or transferring funds instantly to the recipient’s savings account.
One may send and receive money from anyone else who has a PayPal account once you have one. If one uses PayPal to transmit money as part of a business transaction, they will be charged a modest processing fee. The maximum amount you may transfer in a single transaction is $10,000, however, this restriction can be increased by contacting PayPal and submitting specific verification details.
PayPal is available almost everywhere in the globe, but only a few nations do not have access to it. PayPal is available in 19 currencies worldwide, and users may send, receive, and save payments in roughly 190 countries.
What is a Credit Card?
A credit card is a little physical card that is now utilized as a means of payment. It enables customers to pay a merchant for taxable goods and services on the account number promise to pay the card provider for the balances plus any additional agreed-upon expenses.
The card issuer (usually a traditional bank union) creates a rotating account and extends a line of credit to the cardholder, from which the cardholder can request resources to pay a merchant or for a balance transfer.
One can go shopping if they assure the bank that one will return the money. One credit card has a limit, which creates a line for their debt and the amount they may borrow from the bank. One can get a credit card through their bank or open an account with a credit card business.
When a person uses a credit card to shop, their bank will issue them a bill every month, for which they must pay the minimum balance provided by commercial banks by the given deadline, or they might pay the full price to prevent interest.
Having a Credit Card makes things a lot easier because it eliminates any need to check one’s account prior to completing a transaction. They can purchase something and then repay it to their banks afterward.
Main Differences Between PayPal Bank Account And Credit Card
- PayPal bank accounts are run by the American PayPal company, whereas a credit card can be issued by an authorized bank in any country.
- PayPal was launched in the year 2000 and the credit card was first used in 1890.
- PayPal bank accounts are less prone to fraud and theft whereas credit cards are more prone.
- PayPal payments can be made from the online PayPal bank account and credit cards can be also used for offline transactions.
- The maximum transaction limit of a normal PayPal bank account is $4000 and credit cards have varying transaction limits.
Conclusion
In today’s fast-paced world, when time is money and no one has extra time, the trend of online buying is growing by the day, and we can credit payment methods like PayPal and Credit Card for this. PayPal accounts are simple to open, and if you have a bank account, you can always request a credit card. These payment methods assist us in protecting our money from fraud and theft.
PayPal and credit cards are technological alternatives to traditional money transfer methods like checks and money orders. PayPal is a payment provider that provides enhanced security for online transactions. In the case of PayPal, you can only make payments if you have money in your PayPal account. PayPal facilitates money transfers in many countries for relatively low fees.
A credit card is similar to electronic money in that it allows you to buy goods or services without cash and pay for them later. It is not just for online payments.
You can use a credit card to shop even if you do not have enough money in your bank account; instead, you will take out debt or a short-term loan from the bank, which you can pay back later. Credit cards may be used anywhere in the globe, on those businesses that accept them.
References
1. https://www.sciencedirect.com/science/article/pii/S0167718706000890
2. https://link.springer.com/chapter/10.1007/978-1-4302-0353-7_2