Can You Use PayPal Credit to Send Cash?

PayPal has introduced many convenient additions to their basic account, one of them being PayPal Credit. But can you use PayPal credit to send cash?

Can you use PayPal credit to send cash? Yes, you can, and it’s simple. When you want to send money, just choose PayPal Credit as the means of payment. The same cost that applies when using a credit or debit card to send money through PayPal will apply when you use PayPal Credit to transfer cash in US dollars (USD).

A woman sending money through a phone app

In this blog, I’m going to analyze this type of credit line, how it works, and whether it’s a good thing to have. I’ll also talk about the fees involved.

Can You Use PayPal Credit to Send Cash?

PayPal Credit can be used to send money if you need to pay a friend or a family member but don’t have any cash on hand. Using it is simple – all you need to do is enter your account and go to the “Pay or send money” option. Then, you should enter the required information regarding the recipient, such as the phone number or email address. If everything goes smoothly, there will be no money pending.

The next step is important. In order to use the credit for this transaction, you should change the payment option to PayPal Credit, and you can then send the funds. However, you should also keep in mind that there is no promotional funding for these types of transactions, so you should expect to pay the full amount by the due date. If you don’t do so, you will be burdened by interest.

A phone screen with a dollar sign

What Is PayPal Credit and How Does It Work?

If you already have a PayPal account and their Cash Card, you may have heard about their Credit. But what is it? It’s a credit card given to users of this platform as a means to extend the payment period. This is certainly handy with some bigger purchases. PayPal Credit is a credit line based on the creditworthiness of the user.

The manager of this particular credit card program is Synchrony Bank, formerly known as GE Capital. This bank is known for partnering with different retailers in order to provide credit to their customers. The minimum credit line you can get is $250. If you get approved, you can freely pick “PayPal Credit” as a payment method on various websites which support purchases with PayPal.

If I Want to Purchase Something, How Will It Work?

Once you decide to go online shopping using this credit line, ensure you have the PayPal Credit set as the payment option. If you complete a purchase worth $99 or more, there is a period of six months for you to repay the payments without interest rates. However, if the purchase was less than $99, you should repay in full in order to avoid paying the interest rates.

It is as though you are using any other credit card. Come each month after the purchase, you will have a minimum for due payment, which you can either set up to be taken care of automatically or pay it manually through your account.

 A man holding a phone

Are There Any Promotional Offers I Can Count On?

If you are interested in getting this line of credit, you should know about the two types of promotions PayPal offers to its users. This is what they offer:

  • On purchases of $99 or more, you will get 0% APR for a period of six months,
  • Certain purchases can get reduced interest rates.

However, you should be mindful of these offers. If you owe even as much as $1 after the promotion ends, you will be required to pay deferred interest. It means that you will be charged the complete interest you would have paid from the date of the purchase without the promotion.

Which Costs and Fees Are Involved?

If you are interested in PayPal Credit, you should know that there is a 23.99% variable purchase APR involved, which is somewhat higher than the average interest rate on credit cards. However, the good news is that there is no fee to be paid annually. If you skip a payment, you are required to compensate up to a $40 fee. This is a charge for users that were already late with a payment in the last six billing cycles. If you weren’t already late in that period, you would be charged a $29 fee. For returned payments, you will be charged a $29 fee.

Two people with a smartphone

How to Apply for PayPal Credit

As a PayPal user, you can either apply for this credit card at any time or get offered this option when regularly purchasing via an online retailer. The process itself is very quick. You should enter your birth date and the last four numbers of your Social Security number, add annual income and ensure you’ve checked the box for the terms and conditions. The process includes a hard inquiry from PayPal while it checks your credit history during the approval process. The decision will be available in just a couple of seconds. Once you are approved, you can choose it as a payment method with each checkout.

What Are the Pros and Cons?

The best thing about this line of credit is that it makes sizable purchases much more bearable. By spreading payments over the course of several months, you won’t take a severe blow to your budget. Additionally, you can even avoid paying interest if you manage to pay off the balance during the promotional period.

You have more time during promotional periods to pay off sizable purchases in whole and interest-free.It can be expensive if you don’t manage payments on time.
You are protected during purchases.There is no option to use it in brick-and-mortar businesses.
The application process is simple.You don’t get an opportunity to earn any awards.
It is not an ideal solution when you want to send money to other users.

To Apply or Not to Apply?

If you’re considering applying for PayPal Credit, there are a few things to keep in mind. First, make sure you understand the terms and conditions of the credit agreement. You’ll be responsible for all fees and charges associated with your account, so it’s important to know what you’re getting into before you apply.

Second, keep in mind that PayPal Credit is a line of credit, not a loan. That means that you’ll be responsible for paying back any amount you spend, plus interest and fees. If you’re not sure you can afford to make those payments, you may want to consider another option.