What Happens If You Don’t Pay Paypal Credit?

PayPal has a vast market cap in the respective industry because it offers loads of features. PayPal credit is one of them with which you get a credit line to spend at once and pay gradually. You will have certain rules here to agree with PayPal, of which setting a certain monthly payout is one.

If you fail to pay that amount monthly, or as a whole, that can be a concern. So, what happens if you don’t pay PayPal credit? And, if you pay it late, will there be a late fee charged externally? We’ll talk about everything associated with late or no payment for PayPal credit today.

What Is Paypal Credit And How Does It Work?

To put things in perspective, PayPal credit works like the regular banks and credit card issuers you may already be using. PayPal will provide you a reusable credit line to spend instantly, and pay the money over time. They use Synchrony bank as their credit card company like their other services.

Paypal Credit And How Does It Work

You have to agree with PayPal to pay them a certain amount each month to cap the credit you’ve used. It’s usable everywhere PayPal is accepted, as the credit is associated with your PayPal account. They’ll keep your credit scores updated as you spend and pay the due back with the pre-determined payout amount.

There will be a credit limit, and you have the ability to set a minimum payment option as you pay back months on purchases. You can set a minimum payment (monthly) and have instant credit availability whenever buying from online stores or others.

Now let’s see how PayPal charges you for providing PayPal credit:

Charges associated with PayPal credit

Just like regular credit cards, PayPal also charges you an interest based on your account type. If it’s a new account, PayPal charges you an APR (Annual Percentage Rate) of 23.99%. However, the percentage varies with their prime rate, and PayPal has it on their agreement. The minimum interest associated with the PayPal credit is $2.00.

No interest if paid in 6 months

First off, PayPal has no annual basic fees or charges for unused PayPal credits. Plus, PayPal will not charge you with an interest if you pay the full amount you’ve spent within 6 months of the purchase.

Larger purchases have to be $99 or more to avail this facility, and it’s available for every payment you make. They will have your credit history balanced on monthly payments and have a credit limit if not paid on time.

If you fail to meet these criteria, PayPal will charge you full credit interests with a penalty.

What Happens If You Don’t Pay Paypal Credit?

The basic rule is to use the PayPal credit just like any other regular purchase online. In return, PayPal wants you to pay the amount with (or without, if paid in 6 months) interest to cap the money you (technically) borrowed. Here is what happens if you don’t pay PayPal credit or fail to pay in time:

What Happens If You Don't Pay Paypal Credit



Penalty for a late payment

You have to pay the PayPal credit every month with the minimum payout amount. If you’re paying for a purchase of $99 or more, PayPal will take it back within 6 months of the payment. However, if you cannot pay a month’s payment, PayPal will charge you a penalty of up to 35 bucks.

However, if you fail to meet the minimum billing cycle of 6 months prior to the previous payout, PayPal will charge you over $40. When you pay PayPal negative balance afterwards, PayPal puts the penalty on you. But if you maintain the 6 billing monthly cycle, the penalty will come to a lower amount of $29.

Although you can use PayPal credit as your go-to payment method, keeping the credit scores right requires paying on time. If you don’t pay the credit card debt properly, late payment fees can be large, and a hectic experience. Getting into a lawsuit with debt collectors is no surprise either.

How to use and pay the PayPal credit?

To use the PayPal credit, you’ll need to have a PayPal account first, regardless of a business or personal account. If you don’t have a Verified PayPal account, get one with everything in place from social security number to avail credit. Already have a PayPal account? Then go to PayPal’s credit website and apply for PayPal credit.

How to use and pay the PayPal credit

Be 100% sure to review their terms and conditions before proceeding to the final step. That will help you keep things legit, and stay out of getting penalized for late payments. Since it’s 100% online, and doesn’t come with a plastic credit card, you cannot use it in brick and mortar stores. So, know what you’re signing for and what happens if you pay PayPal credit late. You can talk to a PayPal customer service rep from PayPal to get a grasp in prior.


PayPal’s vast association with online banking systems, financial institutions, and ecommerce platforms makes payments easier. PayPal credit makes online purchases even more convenient with the flexibility of paying later, buying instantly.

Now that you know what happens if you don’t pay PayPal credit, it’ll be much easier to get the most out of PayPal credit. You’ll be able to make purchases using PayPal credit and still be safe from paying for penalties.

Bear in mind that you don’t want to exceed the day of the month you’re supposed to pay the installment.