How do I increase my credit limit in PayPal? – Guide 2021
PayPal has one of the largest payment ecosystems in the industry and is one of the few that qualifies as its own type of payment (“I’ll pay PayPal the money”). In fact, you may have trouble keeping up with all the new features PayPal is rolling out.
One PayPal service that you may be curious about, as it has generated some interest lately, is PayPal Credit (formerly Bill Me Later). Read on to learn about this PayPal payment option.
What is PayPal Credit and how does it work?
PayPal Credit is an unsecured line of credit that you apply for and can use online anywhere PayPal is accepted. Your credit line is linked to your PayPal account. You can set it as your default payment method, just like you would with a debit or credit card.
Unlike PayPal credit cards, PayPal Credit does not offer rewards. But it does offer some special payment offers, like longer interest-free terms.
For purchases of $ 99 or more, PayPal Credit gives users up to six months to pay off the balance interest-free, says Susan Schmidt, PayPal Credit’s vice president of consumer credit. Some retailers also offer special offers that extend the period without interest.
If you do not cancel it within the required period, you will owe interest on the entire repayment period. So it may be smart to make a payment plan that leaves you at least a month off, says Bruce McClary, vice president of communications for the National Foundation for Credit Counseling.
For purchases of $ 30 or more, some merchants allow you to break it down into three monthly payments with no interest charges. With this feature, there is also no retroactive interest, says Schmidt.
It is possible to use PayPal credit to send money to friends and family, but it is not cheap. Just like you would with a debit or credit card, you will have a one-time transfer fee of 2.9% of the total amount sent, plus a flat fee of 30 cents. You will also begin to owe interest on this payment immediately because PayPal treats it as a cash advance.
How do I increase my credit limit?
PayPal regularly review your credit line and may invite you to increase your limit, once you’ve had PayPal Credit for at least 3 months. You always have the option to request a credit limit decrease or that we exclude you from credit limit increases.
What kind of security features does PayPal Credit offer?
PayPal sends users an email each time the credit line is used, which contains the total of the purchase and the merchant, just as it does with other payment methods.
You should pay attention to those emails, says Eva Velásquez, president and CEO of Identity Theft Resource Center. If you receive one for a purchase you didn’t make, notify the company immediately, no matter how small the transaction, she urges.
Criminals can make small fraudulent purchases to see if an account is active. But those small charges can also serve as an early warning system for consumers, as long as they’re looking at the notifications, Velasquez notes.
PayPal Credit Pros & Cons
It’s helpful to think of PayPal credit as a great starter credit card or something convenient for PayPal users who like the interface and would like to use credit wherever PayPal is accepted. Those are some of the reasons it might work for you. But its low limits and high APR are not for everyone. Here is our list of pros and cons:
- Fast & Convenient: You can use PayPal credit to make a purchase as soon as it is approved (usually within seconds). By comparison, you may have to wait a week or more for a credit card you applied for in the mail.
- Use Anywhere PayPal Is Accepted: This includes thousands of websites and also a growing number of brick and mortar stores.
- Will Help You Build Credit: Prior to October 2019, PayPal credit was considered a “hidden business line” because it did not report its activity to credit reporting agencies. PayPal later reversed this policy, and PayPal Credit now reports your payment activity to the big three credit bureaus (Equifax, Experian, and TransUnion).
- PayPal Purchase Protection: If your online purchase does not match the description or does not arrive, PayPal will refund the full purchase price plus the original shipping costs.
- Low Credit Limit: Unlike a traditional line of credit, PayPal Credit limits are comparable to or even lower than most credit card limits, with the majority of users’ limits ranging from just $250 to a few thousand dollars.
- Hard Credit Inquiry: The hard credit pull during the application process will likely ding your score several points.
- High APR: While not outside of the range of credit card APRs, you may be able to get a better APR from a traditional credit card, especially if you have excellent credit.
- Risk Of Overspending: You may be tempted to spend more with PayPal Credit than you would with regular PayPal.
What is the maximum PayPal credit line?
Is there a limit to how much money you can spend with PayPal Credit? Like other lines of credit, how much you can qualify for depends on your individual credit and circumstances. Lines of credit can be anywhere from $250 up to $20,000, says Schmidt.
What happens if I exceed my PayPal credit limit?
If you request to pay with PayPal Credit, but the transaction amount would cause your balance to go over your provided credit limit, the system immediately looks to see if they can approve you for a credit limit increase so you can make the purchase. You will receive monthly statements for your line of credit.
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