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This article was last updated Nov 11, 2019. Terms and conditions may have changed. For the most accurate information, please consult the issuer website.
If you’re a PayPal user, you may already be aware that the online payments company offers two credit card options: the PayPal Cashback Mastercard® and PayPal Extras Mastercard®.
PayPal also offers a digital line of credit — PayPal Credit – that can be used to shop online anywhere PayPal is accepted. However, unlike the credit cards (which do not offer 0% introductory APRs on purchases), PayPal Credit allows you to finance certain purchases without paying interest.
In this review, we’ll break down the pros and cons of PayPal Credit, as well as show how it compares with the PayPal Cashback Mastercard® and the PayPal Extras Mastercard®.
In this post:
- How does PayPal Credit work?
- Where PayPal Credit stands out
- Where PayPal Credit falls short
- Compare PayPal Credit to the PayPal credit cards
- The bottom line
How does PayPal Credit work?
PayPal Credit is a reusable credit line that is linked to your existing PayPal account and can be used anywhere PayPal is accepted.
With PayPal Credit, you can enjoy no interest if paid in full in 6 months on purchases of $99 or more. Note, you will be required to make minimum monthly payments during the six-month introductory period. If you do not pay the balance in full within six months, you will incur interest charges starting at the date of purchase.
If you use PayPal Credit to make a purchase of $98.99 or less, you can avoid paying interest when you pay your balance in full each month and by the payment due date.
PayPal Credit offers a simple online application process. Once you provide your name, date of birth, income after taxes and last four digits of your Social Security number, as well as agree to the terms and conditions, you will receive an answer within seconds. Your line of credit will be based on your creditworthiness and will be at least $250.
You can begin using PayPal Credit immediately upon approval from your PayPal account.
Where PayPal Credit stands out
PayPal acceptance. PayPal Credit can be used at millions of online stores where PayPal is accepted, including Target, Hotels.com, eBay, Macy’s, Wayfair, Airbnb, Nike and much more.
Purchase protection. If you didn’t receive an item you purchased, or if the item you received is not what you ordered, you can receive reimbursement for the full purchase price as well as the original shipping costs.
Where PayPal Credit falls short
High APR. PayPal Credit offers a high APR of 23.99% variable. To avoid incurring these high interest charges, we recommend paying your balance in full and on time each month.
Or, if you are taking advantage of the interest-free offer, be sure to pay the total purchase price within the six-month timeframe.
For online use only. Although PayPal Credit is accepted by millions of merchants, it can only be used to make purchases online.
Compare PayPal Credit to PayPal credit cards
If you’d prefer earning rewards over receiving interest-free payments, you may want to consider the PayPal Cashback Mastercard® or the PayPal Extras Mastercard® instead.
The PayPal Cashback Mastercard® is a flat-rate rewards card that offers 2% cash back on every purchase. The PayPal Extras Mastercard®, on the other hand, offers 3 points per $1 spent on gas and restaurant purchases, 2 points per $1 spent on PayPal and eBay purchases, and 1 point per $1 spent on other purchases. Points can be redeemed for gift cards, merchandise, travel vouchers or cash back into your PayPal account.
Although both cards offer rewards on every purchase, neither one offers a sign-up bonus.
See how the products compare side by side.
|PayPal Credit||PayPal Cashback Mastercard®||PayPal Extras Mastercard®|
|Intro APR on purchases||No Interest if paid in full in 6 months on purchases of $99 or more.||N/A||N/A|
|Regular purchase APR||23.99% variable||22.24%, 26.24% or 29.24% variable||22.24%, 26.24% or 29.24% Variable|
|Rewards rate||N/A||2% cash back on every purchase||3 points per $1 spent on gas and restaurant purchases, 2 points per $1 spent on PayPal and eBay purchases, and 1 point per $1 spent on other purchases|
The right card for you comes down to how you like to earn rewards. For example, if you spend a large amount on dining out and gas purchases, or if you frequently shop via PayPal or on eBay, the PayPal Extras Mastercard® is a good option, thanks to its generous rewards rate in those categories.
But if you want a straightforward approach to earning rewards — without the hassle of dealing with rewards categories — you’ll be better off with the PayPal Cashback Mastercard®.
See our full round up of Best Rewards Credit Cards.
The bottom line
If you regularly pay for purchases using your PayPal account, you should consider signing up for PayPal Credit. In addition to offering the flexibility to pay for items right away or over time, the line of credit provides the same benefits as PayPal, including purchase protection and acceptance at millions of online merchants.
Or, if you want to earn cash back or points on your purchases, the PayPal Cashback Mastercard® or the PayPal Extras Mastercard® may be a better fit. Like PayPal Credit, each card comes with a $0 annual fee. However, unlike PayPal Credit, each card offers rewards on every purchase.