‘What is PayPal Credit?’: How to use PayPal’s line of credit to pay off online purchases over time

PayPal Credit is connected to your PayPal account and can only be used for online shopping.

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PayPal Credit is connected to your PayPal account and can only be used for online shopping.
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Shutterstock

  • PayPal Credit is a reusable credit line built into your PayPal account, which you can use at most online retailers that accept PayPal.
  • PayPal Credit isn’t a physical card, and you can’t use it at brick-and-mortar stores, but this makes it quick and easy to sign up and get approved – you just need to have a PayPal account and fill out an online application for approval.
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PayPal is strongly associated with e-commerce and online banking, as it is one of the best ways to make secure payments on the internet.

And while Visa, MasterCard, and American Express are the brands we think of when it comes to the credit cards in your wallet, as it turns out, PayPal is in the credit business as well.


What PayPal Credit is, and how to use it for online shopping

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PayPal Credit isn’t a physical credit card.
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PayPal

There’s a catch: PayPal Credit, unlike Visa and traditional credit cards, can’t be used in brick-and-mortar stores, and you won’t get a physical piece of plastic either.

PayPal Credit is 100% online-based. It is different from other credit cards with PayPal in the name – including the PayPal Cashback Mastercard – as it is only meant to be used online.

But there are many perks that come with PayPal Credit, especially if you are a frequent online shopper and already use PayPal. Here’s what you need to know.


It’s easy to apply and get approved for PayPal Credit

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Apply on the PayPal website.
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PayPal

PayPal Credit has a particularly fast process, since you don’t even need to wait for a physical card to arrive in the mail. You’ll just need to fill out an online application and be subject to an instant approval based on your credit history.

You will need a PayPal account to get the card, which will also automatically link to your PayPal Credit, appearing as a payment option each time you check out with PayPal.


You can only use PayPal Credit if PayPal is available as a payment option

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PayPal Credit is available to use at many stores online.
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PayPal

The flip side of the coin to the convenience of automatically linked PayPal and PayPal Credit is that PayPal has to be an option in order to use PayPal Credit.

Fortunately, this is increasingly common. You can use PayPal Credit at the many online sites where PayPal is accepted, including big name retailers like Walmart, Target, Macy’s, and more, though Amazon is a notable exception.


PayPal Credit can cover the difference for large purchases when you don’t have adequate funds in your PayPal Wallet

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If you don’t have money in your balance, you can use PayPal Credit to pay over time.
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Emma Witman/Business Insider

PayPal Credit is a reusable credit line built into your PayPal account.

So if you want to make a larger purchase right away but your PayPal account’s balance is too low, your PayPal Credit line can spot you the difference – and you can even choose to pay it over time.


You can carry a balance on those large ticket items without being hit with interest fees – but you’ll definitely want to avoid paying interest

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Like other credit cards, PayPal credit has a high interest rate.
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Shutterstock

As long as you pay off purchases of $99 or more within six months, you can get an item scotch-free of interest charges – as long as you make minimum payments.

One thing that’s unfortunately similar between PayPal Credit and its credit card competitors is its sky-high interest rate, at 25.99%.

So long as you’re responsible with paying the balance or large purchases within six months, there’s no financial disincentive to getting PayPal Credit, as there is also no annual fee.

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