Author: Geoffrey Kane
Are you someone looking to get a line of credit and came across PayPal Credit, but wondering if it’s right for you? Then you’ve come to the right place.
In this guide, we’ll be reviewing PayPal Credit and leave you to make the right decision based on the undiluted information in this article.
What is PayPal Credit, and How Does it Work?
PayPal credit is similar to regular credit cards but without the physical plastic card. PayPal credit attaches a credit limit to your PayPal account, which you can use for online-only purchases at online shops or vendors that accept PayPal.Â
Like your credit card, you’ll receive a monthly statement, and you have to make the minimum repayment on your balance monthly.
Once again, PayPal Credit lets you split spending costs over several months. PayPal Credit offers a special four months of interest-free credit on any eligible purchases of £99 or more.
Unlike traditional credit cards, PayPal Credit’s four months of %0 interest isn’t an introductory period. Instead, you get 0% for four months every time you make an eligible purchase.
If your purchase is less than £99 or the 0% interest period has expired, the interest will revert to the standard rate of 21.9% p.a. (variable).
How to Apply for PayPal Credit?
To be eligible for PayPal Credit, you need to meet the following requirement:
- Must be an adult (18+) resident of the UKÂ
- Must have a good credit score of at least 600-850
- Must not be recently declared bankrupt
- Must be employed with an income higher than £7,500 annually
Follow the process below to apply for PayPal credit:
- Visit the company’s website
- Fill in the application form for PayPal Credit. The required information may include your name, address, Social Security Number, email address, checking account information, and your source of income and employment details.
- Preview your information and ensure the information you provided is accurate, then submit the proposal.
How Much Can You Borrow From PayPal Credit?
With PayPal Credit, you may be eligible to receive a credit limit of $250-$10,000. To determine the amount of credit you’ll receive, PayPal will analyze your information along with an external credit check and internal PayPal data.
Also, PayPal may increase the credit limit after reviewing your account activities. But you cannot request a credit limit increase on your own.
What is the Difference Between PayPal Credit and a Regular Credit Card?
PayPal works similarly to a credit card. However, Credit cards offer longer 0% interest periods that can reach 24 months, compared to PayPal credit with four months.
On the other hand, PayPal Credit offers a bit more convenience and simplicity as the application process is quick, and your credit can be issued the same day instead of waiting days for credit approval and card delivery.
Both PayPal Credit and credit cards comply with Section 75 of the Consumer Credit Act, meaning you may be protected if something goes wrong with a purchase costing £100 to £30,000.
Also, PayPal Credit users are covered by PayPal Buyer Protection.
Pros and Cons of PayPal Credit
ProsÂ
- You get four months of 0% interest when you make a purchase costing £99 or more
- PayPal Buyer protection applies to PayPal Credit
- You can get approved the same day.
ConsÂ
- Purchases under £99 must be fully paid each month, or else interest will be applied
- Physical stores don’t accept PayPal CreditÂ
- PayPal Credit is not widely accepted compared to regular credit cards
- Missed payment may affect your credit score, just like any form of credit
Conclusion
PayPal users looking for credit might want to try out PayPal Credit. You get 0% interest for the first four months after an eligible purchase. Also, you can get approved relatively quicker than with a credit card. But you can only spend your credit in stores that accept PayPal and PayPal Credit.
