Paypal needs to verify your credit card, it's why Paypal is showing the message in the yellow box above.
"You have reached a limit on your ability to send money. Please link and confirm a debit or credit card to lift this limit."
Paypal needs to verify your card to make sure the credit card is being used by the real person.
It only needs to be done once. Once verified, you'll be able to use your Paypal account with other future online purchases.
STEP 1: Request Paypal Code
Login to Paypal.
Click on "Wallet".
Click on the card you just added.
Click confirm card.
Follow the instructions there.
Basically, Paypal will (temporarily) charge a fee to you ($1 or $1.95) in order to produce a unique code that only you can see in your bill.
STEP 2: Get 4-Digit Paypal Code
Your code will look like this in the item description section of your statement:
"PayPal*1234 CODE or PP*1234 CODE"
If your credit card company sends you SMS, then you should see the Paypal code immediately.
If they don't, you can access it from their online statement or you can call them via phone.
STEP 3: Verify your account with the 4 digit Paypal code
Go back to Wallet.
Click the card you need to verify.
Enter the 4 digit code.
You're now verified. Paypal will then refund what they charged you.