PayPal is a safe, convenient, and secure online payment system. It is used by online merchants worldwide. You may already use it for your business to manage inbound and outbound payments. What’s more, PayPal offers small business owners like yourself even more with PayPal Credit.
Is this the financial lifesaver that it seems to be? Should you use it for your business purchases and payments? Read on to learn how to use Paypal Credit for your business, plus the pros and cons of doing so.
What Is PayPal Credit?
The credit line from PayPal is reusable and can be used for online payments anywhere PayPal payments are accepted. Note that it is not the same as the platform’s debit or credit card or a Working Capital loan; This is a virtual line of credit.
If approved, you can use it right away. No interest will be charged on purchases of $149+ if paid in full within 6 months. There is a minimum interest charge of $2.00.
How Does It Work?
You will need a PayPal account to access this line of credit. Though terms and conditions may apply, signing up for an account is free. If you already have an account and your credit line application is successful, it will automatically be linked to your account.
When you make an online purchase, simply select PayPal Credit as your payment method at checkout.
Managing Your Account
You will receive an email from PayPal when your monthly statement is ready to view online. And for added convenience, you can also manage your account using the PayPal mobile app.
Once logged in on the app or website, you can view your recent transaction activity, set payment reminders, and pay the credit line installments. This allows you to manage your credit easily.
Making Payments
There are multiple ways to make payments.
- Pay in full with a once-off payment.
- Schedule automatic monthly payments towards the balance owed.
- Make payments from your PayPal account balance on PayPal.com.
- Pay from a linked bank account of your choice.
- Mailed payments are allowed.
Interest
If the balance is not settled in full within 6 months, you will be charged accrued interest at the New Account variable Purchase and Cash Annual Percentage Rate (APR). At the time of writing, the APR is set at 31.39%.
Late Payments
Don’t miss any scheduled payments, if you can help it. You will be charged a late payment fee. This applies every month that the minimum payment is not paid by the due date. The late payment fee will never exceed the minimum monthly payments required.
When It’s Paid in Full
If you have paid in full, you may continue to use your credit line without reapplying. You may also request a credit line increase, if necessary, by calling the customer service number on your monthly statements.
How to Apply for PayPal Credit
Applying for a line of credit with PayPal is quick and easy. Visit Paypal.com and create a PayPal account, if you don’t already have one. The account creation process is fast and free.
Once you have an account, or if you already have one, you can navigate to the PayPal Credit page on the PayPal site and apply. Fill in the requested details, and wait to hear if you have been approved. Then select how you wish to make your future payments.
Your new credit line will automatically be linked to your existing PayPal account. You can also link it manually.
How to Use PayPal Credit for Your Business
As mentioned earlier, you need to have a PayPal account. There are two options – a personal one, and a business one.
On a PayPal Business account, you also have access to PayPal Invoicing. So you can send professional invoices through Paypal (fees may apply). You can add applicable taxes and other details. Plus, you can also customize your invoices with your business logo and more.
Once you have a PayPal Business account, you can make and receive payments for your online business through PayPal as well as your PayPal credit account.
PayPal Credit Pros and Cons for Businesses
This PayPal finance product has both pros and cons. Consider these before deciding to use it for your business.
Pros
The Convenience of Buying Now and Paying Later
It gives you the freedom to make the purchases you need now and pay for them later. This is helpful when you have to make unplanned purchases.
Easy to Use
It’s very easy to use. Once linked to your primary PayPal account, you can use it to pay at any online store or business that accepts PayPal payments. Unlike EFT or credit card payments, there are no account numbers, card numbers, expiration dates, or PINs to enter.
Many Ways to Pay
There are multiple ways to pay your account, from your primary PayPal account, online bank account, in-app, or even through the mail.
Interest-Free For 6 Months
If you pay your balance in full within 6 months, no interest is charged to your account. Therefore, if you know you will be able to pay it off in that time, you could potentially save lots of money in interest charges.
Cons
Only Available With a PayPal Account
It is available to Paypal customers only. This will be a problem if you are based in a country that does not support the platform, or if you cannot open an account for any other reason.
Geographical Issues
PayPal is accepted in over 200 countries/regions and supports 25 currencies. However, it is not supported in a few countries. And it is also not possible to link PayPal to a bank account in several countries. This is not an issue in the United States.
Can Only Be Used Where PayPal Payments are Accepted
It can be used wherever PayPal payments are accepted, and there are countless such stores and businesses. However, PayPal is not accepted everywhere. And where PayPal is not a payment option, neither is PayPal Credit.
High-Interest Charges May Apply
There’s no interest if paid in full in 6 months. However, should you be unable to do so, high interest charges will be charged to your account from the purchase date. Unless you are certain you can pay it at that time and avoid the late fees and hefty interest charges, PayPal Credit may be unaffordable for you.
An Alternative to PayPal’s Line of Credit
PayPal offers a trustworthy and convenient line of credit that you can use for your small business’s unexpected expenses. However, it is only useful when there’s an option to pay with PayPal. And that will not always be the case.
Don’t worry, there are alternatives to choose from. And at E-Boost Partners, we make finding these alternative solutions simple. With a quick and easy online application that takes just a few minutes, you can access working capital, lines of credit, and merchant services.
Conclusion
Paypal Credit offers a convenient way to make payments for online purchases. When linked to a PayPal Business account, it will give your business the tools it needs to make and receive online payments with ease.
However, other finance options are available for businesses. And you don’t have to take the risk of applying for loans with disreputable lenders. E-Boost Partners can help you find the best options and apply for them, online, in mere minutes.
Contact us for more details.
FAQs
Paypal is a payment option that facilitates online payments globally. It can draw funds from a bank account or credit card. PayPal Credit is a revolving line of credit that Paypal clients can apply for and link to their PayPal accounts.
Link your PayPal Credit account to your PayPal Business account. If you do not have a PayPal business account, you can open one on PayPal.com and then apply for the credit line. Simply look for the option to pay with PayPal at checkout, and then select PayPal Credit as your payment method.
If you cannot apply for Paypal Credit yet are keen on a business line of credit, there are other options available. E-Boost Partners can help you access legitimate offers for lines of credit, and streamline the application process.
