About PayPal Credit

PayPal Credit is like a credit card, without the plastic. It’s a credit limit that’s attached to your PayPal account which you can use for your online purchases.

If your application is successful, PayPal Credit will be available as a funding source within your PayPal wallet and can be used for purchases in most places where PayPal is accepted. You can make purchases in the same way as you would with a normal credit card, by choosing PayPal Credit as your funding source at checkout.

PayPal Credit will provide you with a monthly statement showing your transactions and detailing the minimum repayment amount. Repayments can be made by monthly direct debit, directly from your PayPal account or by speaking to our customer service agents. For further information on how you can pay your PayPal Credit balance, see the ‘Make a Payment’ section below.

For purchases less than £99.00, interest is charged at your standard variable rate if the full amount is not paid off by the date shown on your statement.

In addition, PayPal Credit lets you access two types of promotional offers:

• 0.00% for 4 months on all purchases of £99.00 and over; and
• instalment offers with selected merchants.

If you use any of these promotional offers, they will also be detailed on your monthly statement, as well as in the PayPal Credit section of your PayPal account.

Your monthly minimum repayment will be shown in each statement and in the PayPal Credit section of your PayPal account. Any offers you have are also detailed in these locations.
Your minimum repayment amount is calculated based on your purchases, and will include:

• any instalment offer payments due for that month;
• the full balance if less than £5.00, or the higher of £5.00 or 2.00% of the outstanding balance (which excludes any instalment offer balances, but includes any 0.00% for 4-month offer balances); and
• any interest, charges, and arrears.

If you fail to make minimum repayments on time or in certain other circumstances, PayPal may remove your offer. Please see your Credit Agreement for more details.

Here’s an example of how your minimum repayment is calculated:

Assuming you had the following transactions on your account:

The minimum repayment for each component would be calculated as follows:

Your minimum repayment would be £100.00 + £6.00 + £2.00 = £108.00

0.00% interest for 4 months is available on single transactions of £99.00 or more. This means when you spend more than £99.00 in one shopping basket, you’ll benefit from the offer and won’t be charged any interest on that transaction for 4 months after purchase. This applies automatically to any purchase made using PayPal Credit in excess of this value, except those to which another promotional offer (such as an instalment offer) applies. You can use this offer as many times as you like as long as you have an available credit limit.

During the 4 months’ offer period, the 0.00% balance is included in calculating your monthly repayments. You must make your minimum monthly payment or your 0.00% offer may be removed. Any remaining balance due after the offer period or any transactions under £99.00 will be charged interest at your standard variable rate. Please see the Credit Agreement for more details.

With selected merchants, when you check out with PayPal Credit, you’ll be shown a selection of instalment offers which enable you to spread the cost of your purchase across a number of repayments. These instalment offers vary by merchant and allow you to choose a set monthly repayment over a period from 6 to 48 months to help spread the cost of larger purchases in a more manageable way.

Instalment offers will always have an interest rate lower than the standard variable rate, and many merchants offer 0.00% instalments with PayPal Credit. If you already have PayPal Credit, you can take advantage of these offers without having to reapply as long as you have enough available credit limit.

It is important that you think about whether you can afford the monthly repayment agreed for any instalment offer. This will be added to your monthly minimum repayment amount and will need to be paid each month.

If you fail to make repayments or in certain other circumstances, PayPal may remove your offer and any outstanding amount will be charged at your standard variable rate. Please see the Credit Agreement for more details.

You can have multiple promotional offers on your account, up to your agreed credit limit and without needing to reapply. This means you can combine standard purchases with the two types of promotional offer available to help spread the cost and manage your budget.

Assuming you are up to date with your repayments from previous billing periods, we apply your payment first toward the minimum amount due in your statement and then any additional amount left is allocated as follows:

• Toward any monthly payment due on an instalment plan. If you have more than one instalment offer plan, our system will repay the plan with the highest interest rate first followed by the plan(s) at a lower interest rate(s); then
• Toward balances that are subject to the standard variable interest rate (interest and fees on your statement are paid off before any principal); then
• Toward any promotional offer balance: this could be your 0% p.a. interest for 4 months on purchases over £99, that is yet to expire or the balance of an instalment plan; then
• Toward any other balances shown on your statement.

If you have two or more instalment plans with the same interest rate or two or more promotional offers (for example two 0% p.a. interest for 4 months purchases, one expiring in June and one in September) repayments are allocated based on the expiry date, with the soonest to expire being repaid first.

Example:

On your May statement, you have a balance of £750 which comprises the following purchases:

• Sunglasses- £100 @ 0% p.a. for 4 months expiring on 30th June (Promotional Offer 1)
• Camera- £250 @ 9.9% p.a. for 12 months expiring 30th October (Instalment Plan 1)
• Watch- £400 @ 0% p.a. for 4 months expiring on 30th July (Promotional Offer 2)
• £0 balance at standard variable rate

The minimum payment due assuming no interest or charges have been applied is £32.90. This is the Instalment Plan 1 monthly amount due plus 2% of each Promotional Offer balance.

You decide to pay £100, which is more than the minimum payment due but less than the full balance.
From your £100 payment, £32.90 is allocated to the minimum due payment, which leaves £67.10 to be allocated to the above balances as explained here:

1. Entire £67.10 allocated to Instalment Plan 1 (the camera at 9.9% p.a.).

   This is because any amount in excess of the minimum monthly payment due is used to repay that remaining instalment balance. This will NOT reduce monthly instalments due going forward but will shorten the duration of your plan so that it will end sooner.

   If the balance owed on the camera was £250, we would allocate £22.90 plus £67.10 toward repaying this, resulting in the balance the following month being reduced to £160. You would still be required to make a repayment toward the camera purchase in the following month but the instalment plan would end earlier than 30th October.

   Find out how your minimum repayment is calculated here.

2. £0 toward your standard variable rate balance as you are not repaying a standard balance for this statement period. A standard balance is made up of standard purchases of goods and services you make using PayPal Credit that are not promotional balances.
   A balance of £80 for the purchase of clothes does not qualify for a promotional offer of 0% (less than £99) or an instalment plan so this is a standard variable rate balance.
3. £0 toward your Promotional Offer 1 (sunglasses)
4. £0 toward your Promotional Offer 2 (watch)

NOTE: Purchases on a 0% p.a. for 4 month promotion will only be paid down in the event there are no Instalment Plans or standard variable rate balances on your account.

How would your repayment be allocated the following month (on your June statement)?

Assume you have not made any new purchases in the last month, your minimum due payment this month is again £32.90. One of your Promotional Offers (sunglasses) is due to expire this month. This means if you do not repay the full amount outstanding on the sunglasses this month, we will start to charge interest on that outstanding amount from next month.

The balance on the sunglasses is £100.

We tell you when your promotional offer is due to expire, and you decide you want to repay the full £100 balance for the camera to avoid interest being charged.

You make a payment of £132.90 (£100 + £32.90) which is more than the minimum due but less than the full balance.

This means after repaying the minimum due amount of £32.90 we will allocate the remaining £100 in the following way:

1. Toward your Promotional Offer 1 (the sunglasses) because the interest free period is expiring this month on 30th June which repays this purchase of £100 in full; then
2. Any amount remaining after payments towards Promotional Offer 1 (your sunglasses) pays down the remaining Instalment Plan 1 (the camera). This will not reduce monthly instalments due going forward but will shorten the duration of your plan so that it will end sooner; then
3. £0 toward your Promotional Offer 2 (watch) unless your camera purchase has been repaid in full (this is because this offer not expire until 30 July).

No. You cannot select which purchases to pay off first, as our system is designed to automatically apply your repayments to purchases with the highest interest rate first whilst also ensuring that any instalment offer plans are repaid within the term of the plan.

This means if you have any promotional offer purchases (0% p.a. interest for 4 months on purchases over £99) and are also repaying an instalment plan(s), our system will always allocate repayments over the minimum monthly payment to the instalment plan(s) with a higher rate of interest first. The exception is where your 0% p.a. for 4 months offer is going to expire in that month, in which case we will apply your repayment over the minimum monthly payment to that 0% for 4 months offer before the instalment plan.

However, this is to your advantage as it means you pay less interest overall across all of your PayPal purchases.

To avoid being charged interest on any 0% p.a. for 4 months purchase, you must repay any remaining balance of that purchase in full during the month that the interest free period expires.

If your PayPal Credit account balance is comprised entirely of purchases at a 0% p.a. for 4 month Promotional Offer, your payments will be allocated to those balance based on the date order in which the promotional offers expire.

Information about any active Promotional Offers and Instalment Plans (such as remaining balances and the expiry dates) can be obtained at any time, by logging into your account on PayPal.com or in the PayPal mobile app.

We will also email you at least 14 days before your promotional offer interest free period is due to expire.