Getting finance at a store’s checkout isn’t new, of course, and Argos among many other retailers offer interest-free payment periods, many up to 12 months.īut each of these involves filling in a form and a full credit check: with PayPal Credit you need only do this once, and don't have to keep several payment plans in mind.įurthermore, having the freedom to shop anywhere that accepts PayPal makes it more likely you’ll find the cheapest version of what you’re looking for. You must meet minimum repayments: 2% of the outstanding balance, or £5, whichever is higher (on top of your monthly instalments), or risk £12 late payment fees.Īnd you’ll want to pay off your entire balance before the four months end. This can save you a huge amount, because PayPal’s interest rate, although lower than some credit cards and overdrafts, is a considerable 21.9% APR. If you spend more than £99 in a single transaction, PayPal Credit gives you four months interest-free to pay it off. You might want to wait and build your credit history instead ( here’s how). If you have a poor credit history or plan to apply for a mortgage soon, seriously consider whether you really need PayPal Credit before risking your credit rating. Being employed and having an annual income of over £7,500. ![]() Unfortunately, PayPal Credit doesn’t give an indication of whether you’ll be approved beforehand. That could make it more difficult to get credit cards, a mortgage or certain bank accounts. Unlike the soft credit check used by comparison sites, a full check impacts your credit rating, even if you get approved for the product. The PayPal Credit application form is slick – you can receive your credit limit on the same day, unlike a credit card – but it does involve a full credit check. Most people think of PayPal as a payments provider it takes a few minutes to set up an account and start shopping. We’ll now run through PayPal Credit’s pros and cons, and the alternatives. ![]() So, what’s the catch? Well, PayPal Credit has many of the pitfalls that apply to credit cards, plus a few unique concerns. ![]() Like a credit card, if you pay your balance within a set period, you don’t get charged interest.įor purchases above £99, however, this interest-free period shoots up to four months you just need to make minimum repayments. Since 2016, the payments provider has allowed shoppers to borrow from it to make purchases, allowing PayPal to function as an online-only credit card. If you want a cheap or interest-free loan then your options are limited – and PayPal Credit is on that shortlist.
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