Is PayPal Credit a Credit Card?

Terms such as PayPal Credit, PayPal card, and a credit card often mix with each other, causing complete confusion. Therefore, it’s not surprising that many people wonder – is PayPal Credit a credit card?    

No, PayPal Credit is not a credit card but the account where a user’s line of credit is deposited. It can be used for many online purchases. PayPal Credit’s annual percentage rate usually comes slightly higher than average credit card rates. However, a no-interest program for purchases higher than $99 is the main reason people apply for it.    

If you need an extra clarification of these terms, as well as a simple explanation of how PayPal Credit works, make sure you set aside a little bit of your time to read the following article 

No, PayPal Credit Is Not a Credit Card 

PayPal Credit is an account that provides PayPal users with a credit line offered by Synchrony Bank. It can be renewed as soon as the debts are paid. On the other hand, credit cards are payment cards issued by credit unions or banks. 

Here is more information on how to use Paypal as a credit card.

If a store accepts standard PayPal transactions, you’ll likely be able to make purchases with funds from your PayPal Credit. Home Depot, Walmart, and many other popular retailers accept these payments, as well as several online marketplaces, such as eBay. 

Still, keep in mind that PayPal Credit can’t be used in a brick-and-mortar store – it can be used only for online purchases in online stores that offer it as a payment method on their websites. 

As for credit cards, they can be used for both online and in-store shopping. Moreover, they can be linked to your PayPal account – when you need to make a purchase through PayPal, the money can be drawn from a linked card. 

Although you can add an Apple Card to your Paypal account, you can’t use it.

With PayPal Credit, the minimum amount you’ll be entitled to is $250, while the minimum credit line on credit cards varies depending on the financial institutions that provide it. 

Differentiating PayPal Credit from PayPal Card

PayPal Credit is not the same as a PayPal debit card. A PayPal card provides you with easy access to your funds deposited on the PayPal account. It can be used for both purchases in stores and online – at any shop that accepts Mastercard. You can withdraw and add cash to it at regular ATMs nationwide and worldwide. 

There are no annual, monthly, or in-store purchase fees with a PayPal debit card. However, fees are present with:

  • Foreign transactions (2.5%), 
  • Cash withdrawals at ATMs with no MoneyPass (2.50$),
  • Check cashing on the same day (1%-5%), 
  • Adding cash at the register ($4.95).

How to Apply for a PayPal Credit?

Applying for a PayPal Credit is easy and fast, but you must previously have a PayPal account. You’ll know if you’re approved shortly after you submit the application – usually within seconds. You’ll be asked to provide information such as your Social Security number (last four digits), date of birth, and annual income after taxes. You’ll also have to agree to the presented Terms and Conditions. 

Once your application is submitted, Synchrony Bank will review it. The approval and the amount of credit will depend on your creditworthiness. Once approved, you can use PayPal Credit for purchases at stores that support it by choosing it as a payment method. 

Can You Send Money With PayPal Credit?

It is possible to send someone money through this line of credit – all you have to do is choose that option on your PayPal account and select PayPal Credit as the payment method. However, these transactions don’t carry the same benefits you get when making purchases, such as promotional financing. If you want to send money to another person, know that you must pay the whole debt amount by the due date. 

PayPal Credit and Credit Card Fees – Comparison 

PayPal credit’s purchase annual percentage rate (APR) is currently 23.99% but is variable – it is not fixed but can change over time. It means you’ll be charged with interest that equals around 23.99% of your balance over the course of one year. If your balance for a year is $250, you’ll be paying approximately $60 in interest. 

On the other hand, credit card interest depends not only on the bank providing them but also on the credit card type. Here are some examples of average interest rates in 2022, depending on a card type:

Card TypeAverage APRAnnual interstate for $250 credit
Business 17.68%$44
All Credit Cards20.66%$52

As you can see, the average APR is lower with credit cards than with PayPal Credit. However, keep in mind that PayPal Credit offers a no-interest program for purchases higher than $99 if they are paid off in the next six months. Additionally, keep in mind that with Paypal Credit, there is no annual fee. On the other hand, banks usually charge annual fees for credit card use. 

Make Sure You Get a Good Use of Both PayPal Credit, and PayPal Card

PayPal is already known as one of the best and most popular online money transfer apps. With PayPal debit card and PayPal Credit, it offers a wide set of possibilities, with plenty of additional benefits. All you have to do is meet your obligations on time, and you’ll be able to enjoy both in-store and online shopping under much better conditions than by using debit and credit cards provided by regular banks.