PayPal Credit Review: Cons, Pros, and How it Works

by contentwriter

Author: Kelly Carter

People can now shop from the comfort of their homes in today’s digital world. However, for most shoppers, entering their credit card information on a random website can be unsettling, and for a good reason.

With PayPal Credit, your online shopping trips can be far more convenient and secure than they are now. 

How? For starters, PayPal Credit does not require you to enter your credit card information when shopping online and keeps your financial data private.

It’s not the same as using PayPal with a linked bank account, debit card, or credit card. It is, however, just as simple to check out. Learn how it works and decide if it is appropriate for your online shopping.

What is PayPal Credit?

You should first know that PayPal Credit is not a credit card. The company provides credit lines from Synchrony Bank that customers can use to make online purchases directly from their PayPal accounts.

PayPal Credit was previously known as the Bill Me Later service. The payment service claims that when shoppers use their line of credit to make online purchases, they receive several benefits. The benefit includes improved security, convenience, and a streamlined quicker shopping experience.

So how does PayPal Credit work, and should you use it?

How to use PayPal Credit

You can use PayPal Credit on hundreds of retail websites, including marketplaces such as eBay. Here’s how:

  • You can pay with PayPal after filling out your cart on a website’s checkout page.
  • Then, sign in to your account.
  • Following that, if PayPal Credit is an option, select it. Before accepting the terms and conditions, you must enter your birth date and social security number.

In a matter of seconds, customers will know whether they have been approved for financing their purchase or not. 

Additionally, the system immediately checks to see if they can authorize you for a credit limit increase. With that, you may complete the transaction in case your request to pay with PayPal Credit would push your balance over your allotted credit limit due to the transaction amount.

Make sure you have the best credit score possible before applying, just like any other new credit application. PayPal will send a line of credit statement to you every month. You can link your PayPal and PayPal Credit accounts to track activity, transactions, and payments directly from your primary PayPal account.

PayPal Credit fees

PayPal Credit has no annual fee, but you will accrue late fees if you miss payments. They can cost up to $35, just like credit cards. 

You can send money using PayPal Credit, but be cautious because this option may increase your balance and cost you interest and fees. For each transaction, you may be charged a flat fee of 2.9% + $0.30. If you do not repay the balance, you will be charged interest on the money you sent.

PayPal Credit qualification requirements

To apply for PayPal Credit, you must provide the following information:

  • Your birth date
  • Your social security number’s (SSN) last four digits
  • A credit score of at least 650 is required.

How long does it take to get PayPal Credit approved?

You must meet the minimum requirements and apply online to be approved for PayPal Credit. A high credit score (over 650) improves your chances of approval.

Does PayPal Credit run a hard credit check on you?

Applying for PayPal Credit will make a hard inquiry on your credit report. It will appear as “Synchrony Bank” on your report.

Pros and cons of PayPal Credit


  • Promotional periods allow you to pay off big-ticket items with no interest for an extended period.
  • Purchase security
  • Simple application procedure


  • It will be costly if you do not pay off your purchase on time.
  • It is not valid in physical stores.
  • It doesn’t offer a reward 
  • It incurs charges when used in sending money 

Who is PayPal Credit best for?

PayPal Credit is ideal for online shoppers who appreciate using PayPal and would like some extra time to finish paying off purchases over $99. It is not a great deal for smaller purchases or sending money to others because additional costs are involved.

If you only need a few months to pay for items purchased, consider using PayPal Pay in 4, a no-interest buy-now-pay-later (BNPL) service. Those with good to outstanding credit may benefit more from opening a credit card with a 0% APR for at least a year.

Key Takeaways

Online purchases can be made using PayPal Credit. PayPal Credit can be used to send money to someone; however, there is a charge. Additionally, you will be charged interest starting from the purchase date if you don’t complete paying off your purchase before the promotional period expires. Your eligibility for PayPal Credit depends on your creditworthiness and it’s not automatic. Even though it is helpful in an emergency, depending too heavily on PayPal Credit could result in higher costs down the road if faced with APR fees, delayed interest charges, or peer-to-peer (P2P) transaction fees.

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