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What Is PayPal Credit & How Does It Work?

    Chris Motola
  • 14 comments
  • Updated on:
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Chris Motola

Chris Motola

Expert Analyst & Reviewer at Merchant Maverick
An expert in personal and business loans and financial health, Chris Motola has been writing about small business finance and payments for over 5 years. He has been cited in various industry publications, including Forbes Advisor, GoBankingRates, and Medium. Chris is a graduate of the University of Central Florida.
Chris Motola
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14 Comments

Responses are not provided or commissioned by the vendor or bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the vendor or bank advertiser. It is not the vendor or bank advertiser's responsibility to ensure all posts and/or questions are answered.

    Nick

    Say the purchase is $500 and you pay off $400 but the 6 month promotional is up and you missed the pay in full by the $100. Would you then pay the 23% apr or whichever you are given at the time of purchase on the full $500 or just the $100 you did not pay off? Thank you

      Jessica Dinsmore

      Hi Nick,

      Unfortunately, without seeing the exact promo offer you are referencing, we won’t be much help! So sorry–But if you want to repost your question with the promo details we’d be happy to take a look and see if we can get your question answered. Thank you!

        mark

        if you pay your purchases in full with the 6 months no interest, do you still have to pay the deferred interest on the account? I’ve paid one account that was due April of this year (2020) in full but noticed I have deferred interest. Am I still on the hook to pay off this deferred interest which has been tacked onto my account?

          This comment refers to an earlier version of this post and may be outdated.

          Shannon Vissers

          If you pay off your balance in full within 6 months, you should not be charged deferred interest, as long as your transactions are each $99+, and you made all your minimum monthly payments. If you did all of those things, I would definitely ask them why they’ve charged you the deferred interest.

            This comment refers to an earlier version of this post and may be outdated.

            Steamy

            Thanks for the review. If customer defaults on loan using PayPal credit, is the merchant on the hook to pay PayPal to outstanding balance?

              This comment refers to an earlier version of this post and may be outdated.

              Jessica Dinsmore

              Hi Steamy,
              In this scenario, the merchant is definitely not on the hook. When a customer pays with PayPal Credit, it’s just as if they paid with a credit card. So it would be like if a customer pays with a credit card and then doesn’t pay their credit card bill.

                This comment refers to an earlier version of this post and may be outdated.

                D'Angelo Cain

                PayPal credit actually does report to credit bureaus now

                  This comment refers to an earlier version of this post and may be outdated.

                  Jessica Dinsmore

                  Thanks for letting us know, D’Angelo! We’ll have our editorial team look into it and include any changes in the next update.

                    This comment refers to an earlier version of this post and may be outdated.

                    Max

                    Question: Is it 6 months interest free from the time that you open a PayPal Credit acct, or are they offering six months interest-free for each transaction as long as it’s paid off from the time of purchase?

                      This comment refers to an earlier version of this post and may be outdated.

                      Shannon Vissers

                      Hi Max, regarding promotional purchases, looks like you will not be charged interest on the purchase for 6 months, starting from the time of purchase, not when you open the account. Not all purchases qualify for this deferred-interest promotion though. See terms on PayPal’s website

                        This comment refers to an earlier version of this post and may be outdated.

                        Tyler Lawrence

                        Do you need to have credit in order to use this app?

                          This comment refers to an earlier version of this post and may be outdated.

                          Emily Hale

                          Hi Tyler,

                          Thanks for your question; I hope to clear things up for you. Yes, they’ll do a hard credit pull to check your credit and determine approval or denial (and how much your credit line will be). Hope this helps!

                            This comment refers to an earlier version of this post and may be outdated.

                            Birginia

                            Will I recieve a credit card throu the mail

                              This comment refers to an earlier version of this post and may be outdated.

                              Shannon Vissers

                              Nope! PayPal does offer credit cards, but that’s not what this is; PayPal Credit is a digital line of credit. On this page, you can see a breakdown of PayPal’s different credit products: https://www.paypal.com/us/webapps/mpp/credit-line-and-card-services

                                This comment refers to an earlier version of this post and may be outdated.

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