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PayPal Credit: What Is It?

Triston Martin

Feb 14, 2024

To the extent that a payment method can be considered "its own thing," PayPal certainly fits that bill ("I'll PayPal you the money"). You might be overwhelmed by the sheer volume of new PayPal features.

Recently, PayPal Credit has become the subject of interest due to its novelty (formerly Bill Me Later). Find out more about the PayPal payment method here.

Why Does PayPal Have A Credit System?

Synchrony Bank is the lender that makes the PayPal Credit line of credit available. Online purchases can be paid for in installments rather than all at once with this virtual line of credit available to approved PayPal members.

Customers who have been pre-approved for PayPal Credit will see the PayPal Credit payment option when they use PayPal to purchase any merchant's website or physical location that also takes PayPal.

A Guide To Getting And Using PayPal Credit

There is the little hassle involved in applying for and beginning to use PayPal Credit. But before you start using PayPal Credit, you must learn a bit about its operation.

Submitting A PayPal Credit Application

To apply for PayPal Credit, all you need is a PayPal account. When you apply for PayPal Credit, you will be required to open a PayPal account if you do not already have one. The application requires very little information from you other than your date of birth, your net income, and the last security code of your Social Safety number. PayPal will perform a rigorous credit pull, which could lower your score. The approval decision is often made within a few seconds.

Payment By PayPal Credit

Once you've signed up for PayPal Credit, you can use it in tandem with your regular PayPal account at any merchant that accepts PayPal. You can easily use PayPal Credit by making it your "preferred" payment method in PayPal or by choosing it at checkout. You may be asked to use PayPal Credit instead of your usual PayPal payment method by some retailers.

Billing & Credit Terms And Conditions Of PayPal

Make minimum payments on your monthly balance to keep your account in good standing with PayPal Credit. Just like with a credit card, you'll be able to pay the minimum due each month, make additional payments, or pay off your entire balance whenever it suits you.

The APR is variable. Thus it changes whenever the Prime Interest Rate changes. There will be a $2 interest fee minimum.

Interest won't be assessed if you meet these conditions:

  • Have zero outstanding charges at the beginning of your billing month.
  • You either had no outstanding balance at the beginning of the billing cycle, or you paid off your whole outstanding balance by the due date for that billing cycle.

Thoughts On PayPal Credit: Pros And Cons

If you're already familiar with PayPal's user interface and want to use credit wherever PayPal is accepted, PayPal Credit is a terrific first credit card. Consider these as some of the possible justifications for its usefulness to you. However, not everyone can afford the high-interest rate and minimal credit limitations. The following are the advantages and disadvantages that we have identified:

The Benefits of Pay Pal Credit

  • You can start using PayPal Credit to make purchases (usually within seconds) as soon as you're accepted. When applying for a credit card, you could wait a week or more before receiving your card in the mail.
  • Numerous online outlets and a rising number of physical retailers fall under this category.
  • Because it did not report your activity to the credit bureaus, PayPal Credit was labeled a "secret tradeline" until October 2019. The company later changed its mind and began sharing customer payment histories with the three major credit reporting agencies associated with PayPal Credit accounts.

PayPal Credit’s Downsides

  • In contrast to a standard line of credit, most PayPal Credit users have limitations far smaller than those of a credit card, typically between $250 and a few thousand dollars.
  • Your credit score may be hit due to the application's rigorous credit pull.
  • Not bad. However, a standard credit card may provide a lower interest rate if your score is excellent.


If you frequently use PayPal for purchases (as eBay firms do) but don't always have the cash on hand, PayPal Credit is a practical choice to have in your digital wallet. PayPal Credit can also be used to pay for large, one-time purchases.

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