How to Use PayPal as a Credit Card

Since its introduction, PayPal has continued to find ways to make it easier for individuals to send money and make purchases globally. But one of the unique features many people do not know about is that you can use PayPal as a credit card. In this text, we show you how to do it and the pros and cons involved. 

How do you use PayPal as a Credit Card? By applying for “PayPal Credit.” PayPal Credit is a credit card account that offers a reusable line of credit linked to your PayPal account. It gives you the flexibility to pay for purchases immediately or over time. PayPal Credit is acceptable everywhere PayPal payments are accepted. 

Credit cards are a significant part of current culture and a permanent fixture on the financial platform of most developed countries. A credit card can be a reliable tool in getting something you can’t currently afford or an enemy when you surpass your limit and your bank hikes up your interest.

It all comes down to your financial responsibility which is also recommended when using PayPal Credit.

How PayPal can be used as a Credit Card 

PayPal has made it easier for frequent users to purchase products online through their line of credit called PayPal Credit.  It used to be called Bill Me later but was later changed to what it is now.

PayPal credit is not the same as using PayPal with your linked bank account’s debit card or credit card but offers the same ease during checkout. 

How Does it Work?

PayPal Credit is a service that offers reusable lines of credit offered by Synchrony bank. Once you are approved for PayPal credit after applying, you are lent a virtual line of credit that allows you to pay for online purchases in installments instead of upfront. It works like a credit card but should not be confused for one. 

Once you are approved, you can use PayPal credit to finance purchases anywhere where PayPal checkout is accepted but only works for online purchases.  

PayPal credit should also not be confused with PayPal debit or PayPal’s Pay in 4 feature. PayPal Credit requires you to go through a vetting process for eligibility so that you can utilize their line of credit at will.

PayPal is also more flexible than “Pay in 4” because, with the latter, you are approved or denied at checkout, so it is not automatic. Furthermore, Pay in 4 has a strict repayment plan. 

One of the biggest benefits of using PayPal Credit is that it allows you to report your spending directly to the IRS. Since PayPal Credit is treated like a credit card, all purchases are automatically reported and tracked by the IRS so that you can easily keep tabs on your spending and pay any associated taxes on time.

PayPal credit for Sending Money

Aside from making purchases, you can also use PayPal Credit to send money when you need to pay someone, but you don’t have the cash on hand. Here’s how it works 

  • Log in to PayPal
  • Select the option “Pay or send money.”
  • Enter the recipient information, either their phone number or email. 
  • Change the preferred Payment method to PayPal Credit 

The primary difference with using PayPal credit for purchases is that there’s no promotional financing for that transaction, and you will have to repay that amount by the due date or get charged with interest. Sending money using PayPal credit also incurs a 2.9% fee. 

How to Apply for PayPal Credit 

To apply for PayPal credit, you first need to have a PayPal account, or you will have to create one when applying. Furthermore, before applying, you need to meet the following requirements 

  • Be a Uk/US resident and at least 18 years. 
  • Have a good credit history
  • You should not have been declared bankrupt recently
  • Are employed or have an annual income of at least $7,500 

The application process is straightforward, and all you need to do is log in to PayPal and apply, or you might be offered the option to apply when checking out with PayPal at a retailer. 

To apply, you only need to enter your name, date, yearly income, and the final four digits of your social security and agree to their terms and conditions. If you’re approved, you will have it as an option any time during checkout anywhere PayPal is accepted. 

It’s important to note that Synchrony Bank will perform a hard credit pull when you apply for the service, which means your credit score will drop a few points. Then, users also need to have a good credit score; otherwise, their application may be declined. 

Even though PayPal hasn’t specified the criteria for acceptance, you have to assume Synchrony bank is likely to use credit score, among other factors, to determine who is eligible. 

Pros and Cons of Using PayPal Credit

PayPal credit has some reliable benefits as well as some shortcomings that users need to consider before applying. 


  • Promotional period. Users get a promotional period where they receive extra time to pay for large purchases without incurring any interest. You can spread out payments during that time, and as long as you complete payment within the promotional period, they will not charge you interest 
  • Purchase protection applies for PayPal credit just like it does with PayPal. You can even get a full refund in case a purchase does not fulfill your expectation. 
  • Application is easy. You can get approved in seconds and then proceed to use PayPal credit almost immediately. 


  • It can be costly if you don’t pay off your purchase within the promotion period. A combination of Interest and PayPal credit’s high APR is likely to increase the total cost of the purchase significantly. 
  • It only works for online transactions and cannot be used in brick-and-mortar stores. 
  • Users don’t earn rewards. Unlike credit cards, PayPal credit offers no opportunities to earn rewards such as cash backs or points 
  • Not practical for sending money to others frequently. The flat fee added when sending funds means you have to use this option sparingly. 

Final Thoughts 

PayPal Credit can be a reliable tool for frequent shoppers who can benefit from some more time to pay off purchases above $99. So, it’s not such a good deal for small purchases or sending funds to other people, but it can be helpful for emergency purchases. 

For people who only require a few months to pay off a purchase, PayPal offers other products you can try like “PayPal Pay in 4” or “buy now pay later service,” both of which don’t charge interest.