paypal versus credit card payments

I have to pay an amount in sterling for a purchase I made. Is there a difference in the exchange if I pay by paypal or by using my credit card?

Unless the payment is very large, the difference will be small and very difficult to predict. You can ask your CC provider what the rate will be, but they'll only provide an "advisory" rate for today. The actual rate will be the one in force when the vendor's charge is actually posted to your account. It turns out paypal will give you their current rate online (My account/profile/my money/currencies/calculate), but I guess they'll have the same variability the CC provider will have regarding spot rate vs rate on the day the charge is posted.

All this to the side, there is one important feature that CC's provide that paypal is not as good at - fraud protection. paypal give very tight time lines for reporting fraudulent charges, are more restrictive in what they consider fraud, and are in my experience a good bit less customer friendly to deal with. My CC provider has always been very upfront and informative about potential dodgy charges, and dealt with the small number I've noticed before they did efficiently.

I've bought items priced in sterling using paypal and have used both paypal's currency converter (i.e. they charge me in euro) and the credit card's currency converter (i.e. paypal charge me in sterling and the CC does the conversion).

Generally I found the CC conversion to be cheaper.

It's a similar story with Amazon - I always buy in Sterling and let the CC do the conversion to euro when I'm billed.

In addition to the reasons outlined by brianb, I'd say that in my own experience the FX rates operated by PayPal are generally less favourable than those applied by my credit card provider. That's why, even though the difference is minimal, I usually tick the option to charge the payment to my credit card. [Edit: post crossed with gipimann's]

Also, the recipient of the payment is going to be charged PayPal fees which they may expect you to cover (i.e. to send someone £35 costs £36.51, if you accept the fees. If you just send £35, they'll only receive £33-something).