PayPal Credit is a line of credit issued by Synchrony Bank. This virtual line of credit functions similarly to a credit card, letting you pay for online purchases in installments, rather than upfront in-full. Approved PayPal users can use PayPal Credit as a payment option whenever they check out using PayPal
Note that PayPal Credit is not the same thing as a PayPal debit or credit card.
How PayPal Credit Works
PayPal Credit is easy to apply for and start using. But it’s important that you understand a little bit about how PayPal Credit works before you start using this service.
Applying For PayPal Credit
Any PayPal user can apply for PayPal Credit. If you don’t have a PayPal account already, you will be prompted to create one when applying for PayPal Credit. The application is quick and simple: you only have to supply your date of birth, your income after taxes, and the last 4 digits of your Social Security number. Be warned that PayPal will do a hard credit pull, which might ding your credit score a few points. Typically within seconds, you’ll have your approval answer.
PayPal doesn’t have any clearly stated applicant criteria, but applicants with poor credit or limited credit history may be declined.
Note that PayPal Credit is the new name for Bill Me Later, which has been around for more than 10 years. If you already had a Bill Me Later account, you now have a PayPal Credit account.
Using PayPal Credit
Once you have your PayPal Credit account set up, you can use PayPal Credit in conjunction with your PayPal account anywhere PayPal is accepted. You simply need to set up PayPal Credit as your default “preferred” payment option for PayPal, or select PayPal Credit as your payment option when checking out. Some merchants may also prompt you to pay using PayPal Credit instead of your regular PayPal preferred payment option (which is usually linked to a credit or debit card, or your bank account).
You can manage your PayPal Credit settings using a web browser or with the PayPal app. You can also make payments on your balance and see your current credit limit — just like you would for any credit card app you might already use.
As part of its “Cash Advance” feature, it’s possible to use PayPal Credit to send money to someone online using the Send Money tab, the same way you can with any other PayPal Wallet option. You cannot use this feature to send a cash advance to yourself.