Last Updated on September 23, 2023
In times where you urgently need to lend a helping hand to a close friend, perhaps to cover unexpected expenses or support them during tough times. You find yourself wondering if PayPal Credit, that digital lifeline at your fingertips, can come to the rescue. The good news: yes, you can use PayPal Credit to send money to a friend.
At its core, PayPal Credit extends a financial lifeline to eligible customers. It grants a line of credit, akin to a digital credit card, that seamlessly integrates with your PayPal account.
This unique offering allows you to make online purchases, collaborate with participating merchants, and, as you just discovered, even initiate personal transactions (family and friend).
Now that you know all this, let’s talk about how you can use PayPal Credit to send money to a friend. Shall we?
Can I use PayPal Credit to send money to a friend?
When it comes to sending money to a friend, using PayPal Credit is not only possible but also straightforward. PayPal Credit is a digital credit line offered by PayPal that you can use conveniently and repeatedly. The best part? No need to worry or stress about it.
One thing about PayPal Credit is that when you send $99 or more to a friend, you can enjoy up to 6 months of interest-free credit, giving you more time to cover the costs.¹ And here’s the cherry on top: there are no annual fees. Just make sure you pay off your account balance within 6 months, or else interest charges may apply.
How to send money to a friend with PayPal Credit?
So, how can you send money to a friend using PayPal Credit? It’s as easy as logging into your PayPal account and selecting PayPal Credit as your preferred payment method when setting up the payment.
If you’re sending money in US dollars, the charges will be similar to those of a credit or debit card. Keep in mind that it’s considered a cash advance, which may incur interest from the moment you make the payment.
In addition to this, if you’re sending money to a friend in a different currency, there will be currency conversion costs. We’ll dive into the full fee structure shortly.
Where can I use PayPal Credit?
But wait, there’s more! PayPal Credit isn’t just for sending money to friends or to yourself. It’s also a handy option for making online purchases at any store that accepts PayPal. Imagine getting what you want instantly while spreading out the payments over time.²
Simply choose PayPal Credit as your preferred payment method when checking out with PayPal, and you’re good to go.
How to apply for PayPal Credit
Now that we’ve covered the basics, let’s explore how you can apply for PayPal Credit. The process is quick and easy.
- Just log into your PayPal account, click on “Apply for PayPal Credit,”
- Provide your personal details, double-check everything, and you’ll receive an instant decision.
- Once approved, you can start using PayPal Credit right away.
When does interest start to accrue?
Money sent to your friends and family with Paypal credit begins to accrue interest from the particular date you sent it. Let’s break it down in simple terms.
Firstly, for transactions of $99 or more, you have a grace period of 6 months without any interest charges. This means you won’t have to pay interest if you pay off the full amount within this timeframe. However, note that interest will be added from the date of the transaction if you don’t settle it in full within those 6 months.
On the other hand, for transactions under $99, interest begins to accrue right from the date they were initiated. So, be aware of this before you decide to send money to a friend.
Here’s a helpful tip to minimize your costs: if you pay off your PayPal Credit balance in full during each billing cycle, you can avoid paying any interest on your account. Managing your credit line responsibly can save you money in the long run.
Why should I avoid using PayPal credit?
If you have to use PayPal Credit to send money to a friend, note the costs involved. Here’s the lowdown:
When you send money to a friend within the United States, PayPal Credit charges a fee of 2.90% plus a fixed fee. However, if you’re sending money overseas, the fee is approximately 5% (a minimum international fee of 0.99 USD and a maximum international fee of 4.99 USD).³
PayPal Credit for sending payments to friends and family incurs additional costs, such as transfer fees and currency conversion charges for international transfers. So, before you sign up, you need to make sure you check the complete list of fees to understand the full financial implications.
Does PayPal Credit affect credit score?
PayPal Credit is offered through a banking partner, and when a hard credit check is performed, it is reported to credit bureaus. This means that using PayPal Credit can affect your credit history and score. Consider this aspect and evaluate how it aligns with your personal preferences and financial goals.
We’d add this: keep in mind that while PayPal Credit can be a helpful option to spread the cost of significant transactions over 6 months, it’s not the only “buy now, pay later” service available for you when it comes to sending money to a friend.
So, if you’re specifically looking for such services, try to compare different options to find the one that best suits your needs.
Frequently Asked Questions
What can PayPal Credit be used for?
PayPal Credit allows you to make transactions and pay for them at a later time. You can use it on most online stores that accept PayPal as a payment option.
Why can’t I use my PayPal Credit?
Every online transaction has different circumstances. So, there might be times when you could be restricted from using your PayPal credit line even if the seller accepts PayPal Credit.
Conclusion—use PayPal Credit to send money to a friend
PayPal Credit can be a lifesaver to send money to a friend when the chips are down. All you have to do is read and understand the fine print beforehand. We recommend you cozy up with them. Else you might find yourself hurtling down the interest and debt rabbit hole before you know it.
Resources
- PayPal Credit. PayPal
- What is PayPal Credit and where can I use it? PayPal
- PayPal Consumer Fees. PayPal
Read also: tips to overdraft PayPal
