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PayPal Credit Explained – What it is and How to Apply

Written by Jimmy Rustling

What is PayPal Credit?

PayPal Credit is a type of credit that can be used to purchase goods and services from virtual retail outlets that accept PayPal payments. This option can be a welcome addition to traditional methods such as credit cards and cash. How does this credit line work? What are some interesting benefits and are there any possible drawbacks? Let’s take a closer look.

How Does PayPal Credit Work?

In many ways, this type of credit is similar to a traditional credit card. It can be used to perform numerous online transactions and these deductions will then be billed to the customer’s account. However, we should mention that this system is only suitable for online payments.

The PayPal customer is provided with an open-ended (revolving) credit line. These funds are directly attached to an existing PayPal account. Note that clients are provided with a minimum credit line of $250 dollars (or the relevant currency). In other words, this depends on variables such as one’s independent credit rating.

It should also be mentioned that all accounts are associated with a %21.9 APR (annual percentage rate). This is the interest rate that will be charged if monthly payments are not settled on time. Therefore, users will have to plan their budgets accordingly.

How to Get Started

What steps will be required to open up a PayPal credit account? The good news is that the application process is very simple. Customers will normally know if they have been approved immediately after their details have been submitted. Let’s examine how to apply for such an account.

It is first necessary to possess a current PayPal account. You will not be able to apply for credit without having first registered with PayPal.

Assuming that your account is active, PayPal will ask for some preliminary details. These include your post-tax income, your date of birth, and the last four digits of your Social Security number.

The approval process will thereafter be completed within a matter of seconds. This credit is then directly linked to your standard PayPal account. It will be shown as a payment option during the checkout process. Note that this is also applicable to those who have a merchant account.

Who is PayPal Credit Made For?

This type of credit is suitable for numerous individuals. Of course, one of the most common purposes involves making online payments. Simply stated, average consumers, can often take advantage of such flexibility.

There are also times when business owners will include this line of credit within a merchant account. This is helpful in the event that purchases are made on a frequent basis.

This payment method could also be useful for anyone who wishes to pay for an item over time. In other words, PayPal revolving credit is a great way to purchase a product that might otherwise be too expensive to settle in a single transfer.

The Pros and Cons of PayPal Credit

Similar to other payment options, PayPal credit is associated with advantages and certain possible drawbacks. Convenience is arguably the most important benefit in terms of how payments can be made. Some other notable features include:

  • A very simple application process
  • Approval in a matter of seconds
  • Support for merchant accounts
  • These online payments are recognized by a growing number of virtual retailers
  • Clients are provided with purchase protection in the event that a refund is required
  • There are no (0%) annual fees

However, there are still some potential cons to highlight:

  • Not currently accepted by brick-and-mortar retailers
  • No rewards programs
  • Interest rates (APR) can become costly if payments are not made on time

So, we can see that this type of credit offers some unique attributes as well as a handful of possible pitfalls. Consumers should therefore make it a point to research specific variables. From annual fees and interest rates to credit limits and customer support, a wealth of information is available.


PayPal credit is becoming an increasingly popular payment processing solution. Having said this, it should be noted that customers should adhere to all terms and conditions. They might otherwise harm their credit score in the event that payments are not made on time.

Might this option be the most appropriate for your needs? Assuming that you already have a PayPal account, the application process can be completed in a matter of minutes. Those with additional questions about annual fees or payment options are encouraged to contact the official PayPal website.


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About the author

Jimmy Rustling

Born at an early age, Jimmy Rustling has found solace and comfort knowing that his humble actions have made this multiverse a better place for every man, woman and child ever known to exist. Dr. Jimmy Rustling has won many awards for excellence in writing including fourteen Peabody awards and a handful of Pulitzer Prizes. When Jimmies are not being Rustled the kind Dr. enjoys being an amazing husband to his beautiful, soulmate; Anastasia, a Russian mail order bride of almost 2 months. Dr. Rustling also spends 12-15 hours each day teaching their adopted 8-year-old Syrian refugee daughter how to read and write.