What is PayPal Credit?

Last updated: March 21, 2016 - 3:08pm EDT

PayPal Credit is a way to use your PayPal account to pay for things on ecommerce websites, either immediately or over time, when you don't have the money immediately available on your credit card, or in your PayPal account or bank account. In other words, PayPal Credit is basically like using PayPal as a credit card!

As a side note, PayPal Credit was formerly known as "Bill Me Later".

How does PayPal Credit work?

First, you have to sign up for PayPal Credit, which gets you a line of credit worth a minimum of $250.  Then, when you buy something using PayPal, select PayPal Credit as your payment option.  Then, when you have the money, you can log into PayPal and pay off the balance on your PayPal Credit account.

You can use PayPal Credit in most stores that accept PayPal as a payment method, but not all.  Also note that, for purchases of $99 or more made through PayPal Credit, you can have a maximum of 6 months to pay them off.

Do I have to pay PayPal Credit fees?

You will have to pay fees on some aspects of PayPal Credit.  For example, if you use it as a payment option for sending money through PayPal, the standard PayPal fees will apply.  Also, if you miss a minimum monthly payment on your PayPal Credit account, you will be charged a penalty of up to $35.

Also note that you will accrue interest charges if you do not completely pay for a particular purchase made through PayPal within a specific amount of time.  The annual interest rate on purchases made through PayPal Credit is 19.99%, and the minimum interest charge is $2.

See our Is PayPal Free article for a list of transaction fees associated with using PayPal, including sending money.

How do I apply for PayPal Credit?

Go to www.paypalcredit.com and click the Apply Now button.  Click Apply Now again on the page that it takes you to, and log into your PayPal account.  You will need to provide your birth date and the last 4 digits of your Social Security number.  After that, your application will be subject to a credit check.

If your application for a PayPal Credit account passes the credit check (which usually won't take very long), then your new account will automatically be linked to your existing PayPal account.  Now, at participating retailers that accept PayPal, you can select "PayPal Credit" as a payment option!


That's about everything that we can tell you about PayPal Credit!


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