Where can I use PayPal Credit? What Is PayPal Credit? PayPal offers users multiple payment options, with PayPal Credit being a popular choice. While credit cards and loans have long financed consumer spending in the United States, a range of “buy now, pay later” (BNPL) services now lend money to online shoppers. As one of the buy now, pay later services available today, PayPal Credit benefits businesses by making purchases more accessible to consumers.

This guide explores how PayPal Credit works for consumers and businesses, its costs, its application process, and everything else you need to know about the service. Let’s get started!

Where can I use PayPal Credit?

You can learn more about the offer details and apply for PayPal Credit from the PayPal website. We’ll process your application and let you know immediately if we approve it. If approved, we’ll open your PayPal Credit account and automatically link it to your PayPal account.

PayPal Credit is subject to credit approval and is offered by Synchrony Bank. It’s available for US residents who are of legal age in their state of residence.

If you have any question about PayPal Credit, please contact Synchrony Bank at 844-373-4961, Mon-Fri 8am-11pm ET, and Sat-Sun 9am-9pm ET.

What Is PayPal Credit?

PayPal Credit (formerly called “PayPal Bill Me Later”) is a virtual credit card. It was originally launched in 2008 but was rebranded into its current form in 2015. The service is paper-less, card-less, and built directly into your PayPal wallet.

The integration with your PayPal wallet means you can manage your payments, view your balance, and check your statements through your existing login.

Two other services—PayPal Extras MasterCard and PayPal Smart Connect Card—fall under the PayPal Credit umbrella. However, they offer a physical card so will not form part of this rundown. Learn more about the pros and cons of PayPal’s credit cards.

On the surface, the PayPal Credit works like a traditional credit card; you make a purchase on the card and either pay off any balances immediately or spread the costs over several months—but that’s where the major similarities end.

What’s the difference between PayPal and PayPal Credit?

PayPal is a payment service provider that acts as a digital wallet through which you can send and receive funds, pay for items, and hold cryptocurrency. Meanwhile, PayPal Credit is a service offered by PayPal.

Traditionally, a PayPal user pays for goods or services by adding funds to their wallet or linking a debit card, credit card, or bank account. If an eCommerce store accepts PayPal, the checkout page transports them to a PayPal terminal to complete their purchase. By using PayPal, shoppers don’t need to enter their card details on individual websites.

Meanwhile, consumers must apply for PayPal Credit. Upon approval, users have the choice between paying through PayPal’s traditional method or PayPal Credit.

How Does PayPal Credit Work for Merchants?

PayPal Credit works for any merchant accepting PayPal as a payment method. To accept PayPal payments, simply integrate its checkout page into your online shopping cart. When your customer selects the PayPal Credit option, PayPal upfronts the costs to you, and the shopper makes the required payments to PayPal.

Is there a minimum and maximum purchase amount?

There is no minimum purchase amount to use PayPal Credit. However, only purchases totaling $99 or more incur no interest for six months following the transaction.

In terms of a maximum purchase amount, PayPal Credit users have a credit limit. The minimum credit limit extended by PayPal is $250.

When does interest start to accrue?

When exactly interest begins to accrue depends on the type of purchase. Purchases amounting to $99 or more benefit from a 6-month interest-free period. Interest doesn’t accrue until six months after a purchase, at which point it accrues on the remaining balance.

For purchases less than $99, there is no interest-free period. Shoppers must pay the full balance of the purchase within 23 days of the billing cycle period to avoid interest. If a shopper does accrue interest on a purchase less than $99, the minimum interest charge is $2.

Finally, no interest-free period is available to users who send money to their peers with PayPal Credit.

Is PayPal Credit Good for Your Business?

If you accept PayPal payments, your eCommerce store is already capable of accepting PayPal Credit. If you don’t accept PayPal, assess whether it’s a good payment option for your online store. Compare PayPal’s fees against the fees of other online payment processors to determine if it’s a suitable option for your business. Fortunately, accepting PayPal does not prevent your business from accepting other BNPL services or payment options. And accepting online payments from multiple channels offers more payment flexibility to your customers, as well as more revenue to your bank account.

FAQs About PayPal Credit

Is PayPal Credit safe?

PayPal Credit is backed by PayPal, one of the world’s largest digital finance companies. PayPal has an excellent reputation for security and offers purchase protection services to its users.

Can your business accept PayPal Credit?

If your business accepts PayPal payments, your business can accept PayPal Credit. You do not need a separate account to allow customers to use PayPal Credit through the PayPal payment portal.

How do you get paid with PayPal Credit?

When a customer checks out using PayPal, they have the option to use PayPal Credit if they have been approved for the service. PayPal sends your funds upfront, even though the customer has yet to pay PayPal in full for the transaction.

How long does Paypal Credit take to get approved?

In most cases, PayPal Credit offers a decision within a few seconds.

Can I use PayPal Credit to send money to a friend?

Yes, PayPal Credit can be used to send money to friends. However, this feature is subject to extra fees. Expect to pay at least 2.9% + $0.30 to send money to a friend. (And that’s before you pay interest!)

Can you use PayPal Credit for business expenses?

PayPal Credit may be a viable option for business expenses. However, PayPal also offers small business loans between $5,000 to $500,000. The latter may be more beneficial depending on your specific circumstances.

Is PayPal Credit a credit card?

While there is no physical card, PayPal Credit does act as a digital line of credit. If a consumer buying an item or service from an online retailer opts to use PayPal Credit, they will make payments on it over time much like they would with a credit card.

What happens if you don’t pay PayPal Credit?

If you don’t pay PayPal Credit, you’re subject to late fees. If you default on the debt, PayPal may take action against you to recover it. Such actions include sending your debt to collections and reporting the default to credit bureaus.

How do I get approved for PayPal Credit?

Start by opening a PayPal account. Then, apply for PayPal Credit within the PayPal dashboard. It should only take a few seconds to receive a decision.

Does PayPal Credit affect your credit score?

PayPal Credit may impact your credit score because the company uses hard inquiries when evaluating applicants. Additionally, PayPal reports to credit bureaus. As such, there will be a record of your PayPal Credit utilization and payment history. However, your credit utilization and payment history can positively impact credit if used responsibly.

What is the difference between PayPal Credit and PayPal Pay in 4?

Expanding its buy now, pay later services, PayPal now offers PayPal Pay in 4. With PayPal Pay in 4, 25% of the purchase amount is due at checkout. After that, an additional payment of 25% of the purchase total is due every two weeks until the debt is paid in full. If payments are made on time, no interest accrues.

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