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If you live in the United States and you have to an Xbox Live account, boy! do I have some news for you. In an information update posted by Major Nelson, he revealed that Xbox Live members can now access PayPal as a method of payment for Xbox Live Marketplace – that’s if they live in the United States.
Anyway, with this system, you can use PayPal to buy Microsoft Points without having to associate your credit card information to your account.
A couple of things to point out:
PayPal is currently supported for Xbox LIVE users in the U.S. only.
PayPal can only be used to purchase Microsoft Points on Xbox.com.
PayPal accounts are not available for purchasing Microsoft Points on the Xbox 360 console.
You can associate multiple Pay Pal accounts with your Xbox LIVE account.

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