Last Updated on September 23, 2023
You’re browsing your favorite online store, and you spot the perfect pair of sneakers. They’re stylish, comfortable, and on sale. But here’s the catch – you don’t have enough money in your bank account to buy them right away. It can be frustrating, right? Well, that’s where you have to use PayPal Credit to save the day.
PayPal Credit is a virtual wallet that gives you the freedom to make purchases without worrying about immediate payment. It’s not a physical credit card. PayPal Credit is a line of credit provided by PayPal. This means you can buy those sneakers now and choose to pay for them later, either all at once or in smaller installments.
Think of PayPal Credit as your personal shopping ally that grants you the freedom to get the things you want without straining your budget. It’s that extra boost of financial flexibility that can turn your online shopping experience from frustrating to fantastic.
In this article, we’ll teach you how to use PayPal Credit by providing you with simple steps and useful tips to help you along the way.
So, come right in to discover how PayPal Credit can make your shopping experience smoother and more enjoyable.
How to use PayPal Credit
Using PayPal Credit is easy, whether you’re making a purchase or applying for it. If you already use PayPal, you can simply select PayPal Credit as your payment option during checkout.¹ Below are the ways to use PayPal Credit.
1. Apply for PayPal Credit
Before you can use PayPal Credit, you need to apply first. So here’s how to do that:
- Grab your computer or phone and log into Paypal.com using your account credentials.
- Look for the option that screams, “Apply now and pay over time with PayPal Credit.” Click on it like you’re clicking the “buy now” button for that dream vacation you’ve been eyeing.
- Verify or update your billing address on the next screen. If the address is correct, just hit “Continue” and get on with the show. But if your address needs a little sprucing up, click “Update” and enter the new billing address. Then, click “Continue.”
- Enter your personal information, including your Social Security number and date of birth. Once you’ve done that, review the terms and agreements.
- Click Agree and Review Terms.
Your application will be submitted, and you should receive an instant decision.
2. Use PayPal Credit to buy online
Buying stuff online with PayPal Credit is as easy as ordering pizza delivery on a lazy Sunday. Just visit your favorite retailer that accepts PayPal, load up your cart with goodies, and proceed to checkout. That way you don’t have to overdraft PayPal and pay high fees. Then, follow these steps:
- Regardless of which retailer you choose, you’ll need to select your PayPal account as the payment option for your purchase.
- When the PayPal window pops up, select PayPal Credit and then continue.²
Review your order, and if everything looks good, submit your order.
Note: If you don’t have a PayPal account, you’ll be prompted to create one.
After creating an account, select the option to use PayPal Credit and then follow the instructions given. The approval process is quicker than a cheetah on roller skates, and you’ll receive a decision in seconds.
Where can I use PayPal Credit? It’s primarily designed for online use and may not be widely accepted at physical brick-and-mortar stores.
This means you can use PayPal Credit for purchases made on most online stores, but not for transactions at local stores near you.
3. Send money with PayPal Credit
Sending money with PayPal Credit is pretty straightforward and as easy as sending a virtual hug to a loved one (but with a little financial twist): Here’s how to send money with PayPal Credit:
- Log into your PayPal account.
- Choose PayPal Credit as your payment option when setting up the payment.
- Follow the instructions provided.
Now, this has to be said, the charges for sending money with PayPal Credit are similar to using a credit or debit card when sending money in US dollars. But remember, when you use PayPal Credit to send money, it’s like getting a cash advance, so you start accruing interest faster than a sloth on a sugar rush. In other words, right away.
Another thing is that there may also be extra fees for converting currencies for international transfers, but we’ll explain all the details later on.
4. Make a PayPal Credit payment through the mail
PayPal offers you the option to make payments via mail.³ Here’s how to do this:
Send your payment to the following address:
- PayPal Credit
- P.O. Box 71202
- Charlotte, NC 28272-1202
Make sure you write your check payable to “PayPal Credit” and include your payment coupon or write your account number on the check. If you prefer the modern approach, you can also make your payment over the phone. Just reach out to PayPal’s customer service at 1-866-528-3733, and they’ll fill you in on the details
Can I send money to myself with PayPal Credit?
There’s a clever workaround that makes it possible to send money to yourself on PayPal Credit, even though PayPal Credit isn’t primarily designed for that.
According to PayPal’s user agreement, transfers between personal accounts are allowed. This makes PayPal Credit a viable option for sending money to yourself. One advantage of using PayPal Credit for these transfers is that there are no fees for personal payments.
Follow these steps to send money to yourself using PayPal Credit:
- Log in to the PayPal account you want to use for sending money.
- Click on the “Send & Request” tab at the top of the page.
- Choose the option that says “Send to Friends and Family.”
- Enter the email address or mobile number associated with your other PayPal account.
- Specify the amount you want to send and select the currency.
- Double-check the details and click the “Send” button.
Is PayPal Credit free?
No, using PayPal Credit is not free. Depending on how you use it, there might be fees and interest involved. So, before you start using PayPal Credit, we suggest you cozy up with those terms and conditions. Trust us, it’s well worth the read.
Now, let’s talk about the fees and interest rates, the not-so-fun part of the PayPal Credit experience. Here’s the lowdown on what you need to know:
- Interest (APR): PayPal Credit has an Annual Percentage Rate (APR) of 23.99%. This is the interest rate charged on any money you owe.
- Minimum Interest Charge: This is the smallest amount of interest you might have to pay. If you owe interest, there is a minimum charge of $2, even for small amounts.
- Late Payment Fee: Not making your payment on time might cause you to be charged a late payment fee of up to $40. So, make sure you mark those due dates on your calendar, set a reminder, or ask your trusty pet parrot to remind you.
- Returned Payment Fee: Just like when you accidentally return a package to the wrong address and have to pay the return shipping fee, PayPal Credit has a similar concept. If for one reason or the other, your payment bounces back, PayPal Credit may charge you a fee of up to $29.
- Domestic Payments: When using PayPal Credit to send money within the United States, you may have to pay a PayPal fee of 2.9% of the transaction amount, plus an additional fixed fee.
- International Payments: Sending money abroad using PayPal Credit may incur a PayPal fee of 4% of the transaction amount. Note that actual fees may vary based on your location and account status.
When does interest start to accrue?
This varies depending on what you’re doing. Nonetheless, here are a few situations to consider:
- If you’re buying something that costs less than $99, the interest starts adding up from the day you make the purchase. So be aware of that.
- When you send money to someone using PayPal Credit, the interest starts adding up from the day of the transaction. Keep this in mind when you’re sending money.
- Now, if you spend $99 or more but can’t pay it off completely within six months, the interest will be added from the day you made the purchase. So make sure you’re able to pay it off on time.
You don’t have to fret, so long as you manage your PayPal Credit account responsibly and pay off your entire credit balance every billing cycle, then you won’t have to pay any interest.
But seriously, you have to carefully read the terms and conditions provided by PayPal so that you have a complete understanding of the fees and interest associated with PayPal Credit beforehand.
Pros and cons of PayPal Credit
Before signing up for PayPal Credit, it’s important to consider the pros and cons to determine if it’s the right choice for you. Here are some factors to keep in mind:
- You’ll receive an approval decision soon after applying for credit.
- PayPal Credit is user-friendly for online purchases.
- PayPal Credit can be used to send money to friends, family, and even yourself (with a workaround).
- Purchases over $99 are interest-free for six months.
- PayPal Credit is primarily for online purchases and cannot be used as a physical card in brick-and-mortar stores.
- Interest starts accruing immediately for purchases under $99 and when sending money to friends and family.
- Sending money using PayPal Credit may involve transfer fees and currency conversion charges, particularly for international payments.
Does PayPal Credit affect credit score?
Yes, using PayPal Credit can have an impact on your credit score. When PayPal conducts a hard credit check during the application process, it is reported to credit bureaus, potentially affecting your credit history and score. Since PayPal Credit is provided through a banking partner, they may share your information with credit bureaus.
Frequently Asked Questions
Why won’t PayPal let me use PayPal Credit?
Sometimes, even if the seller accepts PayPal Credit, there might be situations where you can’t use your credit line for a purchase. If that happens, try using a different payment method that you have available.
Can I use PayPal Credit to pay bills?
Yes, you can use PayPal Credit to pay your bills. When you have a bill to pay, you can choose from different payment methods available in your Wallet. These methods include using your bank account, debit or credit card, your PayPal balance, or PayPal Credit.
PayPal Credit can be a helpful option when you’re making larger purchases of $99 or more and can pay them off within six months. It’s also a good choice if you can consistently pay off your full bill each billing cycle to avoid paying a lot of interest.
However, it’s important to remember the fees that come with using PayPal Credit. Just like any other credit service, things can get tricky if you’re not careful with your payments. Falling behind can result in penalties, and those interests can add up fast.
So, if you do decide to use PayPal Credit, make sure you stay on top of your payments and read the fine print to understand all the fees involved.
Read also: is PayPal to credit card possible?