What Is PayPal Credit?

Spread your payments out over time, but look out for deferred interest

PayPal Credit allows PayPal consumers more time to pay off a transaction via a revolving line of credit.

Learn more about how PayPal Credit works, how to apply for PayPal Credit, whether there are expenses associated, and how to make the most of the service.

What Is PayPal Credit?

PayPal Credit provides PayPal customers a means to extend the payment time for some transactions via a line of credit depending on their creditworthiness. Synchrony Bank (previously GE Capital), recognized for collaborating with shops to create credit cards, handles the program. 


The minimum PayPal Credit credit limit is $250.

If PayPal accepts your application for the program, you may pick “PayPal Credit” as a payment option for websites that enable PayPal payments.

How PayPal Credit Works

Once you have a PayPal Credit account, you will be offered the opportunity to pick it as a payment method throughout the checkout process if the merchant provides it. As long as you have adequate credit available, your transaction should go through. If you don’t have enough credit, PayPal may enable the transaction to go through by quickly boosting your credit limit.

How It Works for Purchases

If you buy at an online merchant that takes PayPal, you should see PayPal Credit as an option. On purchases of $99 or more, you’ll have six months to make the payments without interest. For purchases that are less than $99, you’ll have to pay the amount in full to avoid incurring interest.

As with a credit card, each month you’ll have a minimum payment due, you may set up automated payments or pay manually using your PayPal account.

How It Works for Sending Money

If you need to pay someone you know and don’t have the cash on hand, you may use PayPal Credit to transfer money. Choose the “Pay or send money” option in your PayPal.com account and input the recipient’s details (their email address or phone number), then change your payment method to PayPal Credit. There is no promotional financing for these purchases, so you’ll have to pay the amount owing in full by the due date, or you’ll be slapped with interest.


When you use PayPal Credit to transfer money, PayPal will add on a charge of 2.9% + 30 cents.

PayPal Credit Costs & Fees

PayPal Credit offers a variable purchase APR of 23.99%, which is somewhat higher than the typical credit card interest rate. There is no yearly charge. If you miss a payment, you will incur up to a $40 late payment charge if you’ve had a late payment in the prior six billing cycles or $29 if you haven’t. There’s also a $29 charge for returned payments.

Promotional Offers

PayPal Credit includes two kinds of promotional offers:

  • 0% APR for six months on purchases of $99 or more
  • Reduced interest rates for some purchases

Though these deals might seem like a wonderful bargain, just be cautious that if you owe even $1 the day after the promotional period finishes, you’ll face delayed interest. In other words, you’ll be charged all of the interest you would’ve paid from the date of the transaction if you hadn’t obtained the promo rate.

How to Apply for PayPal Credit

If you have a PayPal account, you may log in and apply for PayPal Credit at any time or you may be provided the opportunity to apply while checking out with standard PayPal via an online store. The method is quick: Enter your birth date, yearly income, the last four digits of your Social Security number, and check the box to agree to the terms and conditions. PayPal will undertake a hard inquiry when it analyzes your credit during the approval procedure. In a few seconds, you should have your choice.

If authorized, PayPal Credit will be a payment option for all future online checkouts where PayPal is accepted.

Pros and Cons of PayPal Credit


  • Promotional periods provide you more time to pay off significant purchases with no interest.
  • Purchase protection
  • Easy application process


  • Costly if you don’t pay off your buy in time
  • You can’t use it at brick-and-mortar shops.
  • No possibility to earn awards
  • Not great for giving money to others

Pros Explained

Promotional periods provide you more time to pay off significant purchases without interest: Spreading out payments over time might be a tremendous assistance as long as you pay off the debt before the conclusion of the promotional period.

Purchase protection and free returns: Purchases purchased with PayPal Credit get PayPal advantages. This includes a complete refund if a purchase doesn’t match your expectations and free shipping for products you send back (exclusions may apply).

Easy application process: You’ll receive a decision in just a few seconds. If accepted, you may utilize PayPal Credit instantly.

Cons Explained

Costly if you don’t pay off your promotional buy in time: Deferred interest and PayPal Credit’s high standard APR may considerably raise the cost of your transaction.

You can’t use it at brick-and-mortar stores: PayPal Credit is restricted to online transactions only. 

No possibility to receive rewards: If you use a rewards credit card instead, like the PayPal CashBack Mastercard, you may receive cash back or points on your transactions.

Not appropriate for giving money to others: Because of the variable price of 2.9% plus the fixed fee of $0.30 that's applied to the amount you transfer to friends using PayPal Credit, you should utilize this option rarely. 

Who Is PayPal Credit Best For?

PayPal Credit is perfect for online shoppers who appreciate using PayPal and who, on occasion, would benefit from some more time to pay off purchases over $99. For minor transactions or to transfer money to others, it’s not a fantastic bargain, given there are extra expenses involved. If you just need a few of months to pay for a purchase, consider utilizing PayPal Pay in 4, a buy-now-pay-later program that doesn't charge interest.

Those with good-to-excellent credit may be best served by getting a credit card that provides 0% APR for at least 12 months. In addition to having a longer term to pay off a significant purchase, you’ll avoid deferred interest and maybe receive points on your purchase.

PayPal Credit might be helpful to have in a hurry, but depending on it too much could cost you extra if you are charged with APR charges, delayed interest, or costs for peer-to-peer payments. 

Key Takeaways

  • PayPal Credit is a reusable line of credit that enables you pay for online purchases over time.
  • You may also use PayPal Credit to give somebody money, but it comes with a cost.
  • If you don’t complete paying off your item before the promotional time expires, you will be charged interest from the purchase date.
  • PayPal Credit is not automatic—your acceptance is dependent on your creditworthiness.

What Credit Score Is Needed for PayPal Credit?

PayPal doesn’t define the credit score that is required to get qualified for PayPal Credit. Even individuals with mediocre credit ratings may qualify.

What’s the Difference Between PayPal and PayPal Credit?

PayPal is a payment tool that takes money from either your bank account or a credit card. You may also retain a balance in your PayPal account and utilize it for purchases. PayPal Credit is a revolving credit line that provides you additional time to pay off purchases but costs an APR if you carry a debt.

What’s the Minimum Purchase Required to Use PayPal Credit?

There is no minimum purchase amount mentioned in the PayPal Credit terms and conditions.