Money Wellness
Image shows a women on a mobile paying for purchases
category iconcost of living
category iconmanaging your money
calendar icon05 Sep 2023

Customers pay more as PayPal Credit increases interest rates

PayPal customers using its credit service will have to pay back more after it got rid of its lowest APR last week.

Previously, PayPal Credit charged 21.9%, 25.9% and 29.9% depending on your individual financial circumstances. But it has announced that as of 1st September it will no longer be offering customers 21.9% APR - hiking its lowest charges by 2% to 23.9%.

The changes mean that customers will pay back an additional 69p per month for every £500 borrowed.

And there could be more changes to come with PayPal saying they’re also reviewing the rates customers currently pay, which could mean lots of people repaying more if they’re moved onto higher APRs.

PayPal says it has contacted affected customers and advised them about the changes.

 

What’s Paypal Credit and how does it work?

PayPal Credit is essentially cardless credit that offers shoppers extra time to pay off their purchases. It’s a credit limit that’s attached to your PayPal account that can be used to pay for online purchases.

You can apply for PayPal Credit online. Once you’re approved, you choose PayPal Credit as a payment option at checkout.

You can use Paypal Credit anywhere Paypal is accepted online.

If you spend over £99 with Paypal Credit, you’ll get 0% interest for four months. Interest will be charged on outstanding balances after four months at either 23.9%, 25.9% and 29.9%. The amount of interest you’ll be charged depends on your individual circumstances.  

 

What’s the difference between Paypal and Paypal Credit?

Paypal is a payment option that draws money from either your bank account or credit card. You can also keep a balance in your Paypal account and use it for purchases.

PayPal Credit is a credit line that allows you more time to pay off purchases but charges interest if you carry your balance forward.

 

Avatar of Caroline Chell

Caroline Chell

Caroline has worked in financial communications for more than 10 years, writing content on subjects such as pensions, mortgages, loans and credit cards, as well as stockbroking and investment advice.

Related posts

cost of living

12 Apr 2024

Rent increases overtake wage growth- many will struggle research finds

Think tank Resolution Foundation has found that average rent prices could rise by 13% in the next three years, which means they’ll outpace the projected average wage growth of 7.5%

cost of living

10 Apr 2024

FCA finds nearly half of UK adults are in a better financial position after seeking financial help

In positive news, the number of people struggling with personal finances has decreased over the last year. People are still struggling though- and if you need debt help, find out what we can help you with.

cost of living

09 Apr 2024

Poor car insurance payouts leaves Which? calling for the FCA to hold firms accountable

Which? is calling for the Financial Conduct Authority (FCA) to take tougher action to hold firms to account when they offer poor payouts to car insurance customers, as their new research finds a third of insurers were rated poorly by claimants when it came to the value of payouts.

cost of living

09 Apr 2024

900,000 children living in poverty in England aren’t eligible for free school meals

900,000 children living in poverty aren't eligible for free school meals as parents call for eligibility to be expanded. If you're struggling with food costs, here's what you can do.