Weâve all been there. You need cash but your bank account is running low, so you take a cash advance from your credit card. Handled carefully, it can be a useful way to get through a rough patch in your financial life.
PayPal offers a digital credit line that includes a cash advance option, PayPal Credit, formerly known as âBill Me Later.â This service allows users to send money to friends and family, buy things online, and stretch payments over time.
However, thereâs a very important caveat with PayPal Creditâs cash advance feature: You cannot take out cash for yourself or advance money to your own account; you can only send money to friends and family. This is very different than the credit card cash advance features you may already be familiar with.
Is PayPal Credit cash advance a smart way to send money to friends and family? It really depends on your circumstances: PayPal Credit cash advance carries a relatively high APR, but it also offer a grace period for repayment, unlike credit card cash advances.
Issued by Synchrony Bank, PayPal Credit is a virtual line of credit that lets users make online purchases or send money to others. Keep in mind that PayPal Credit is different from a PayPal debit card or a PayPal credit card.
Applying is easy: Go to the PayPal Credit website, enter your date of birth, income after taxes, and the last four digits of your Social Security number. Once approved, you are issued at least $250 worth of credit. Approved users then get PayPal Credit as an option when they check out from online retailers who accept PayPal for payment.
For some online purchases of $99 or more, you have six months to pay off your PayPal Credit debt in full without accruing interest. If the balance is not paid in full within six months, interest will be charged to your account from the date you made the purchase, and interest will continue to be charged until the balance is paid off in full.
For PayPal Credit cash advances that are sent to friends and family, you have to pay off your balance in full each month by the payment due date to avoid interest charges. This is one of the biggest advantages of a PayPal Credit cash advance: Interest is deferred to the end of the monthly payment period. With credit card cash advances, generally interest begins accruing immediately, without any grace period.
Paypal Credit offers a single 26.24% APR for cash advances and regular purchases.
There are advantages and disadvantages to PayPal Creditâs cash advance service, when compared to credit card cash advances.
PayPal Credit may seem a good option when you need to send cash in a pinch. But whether itâs the best choice for you really depends on how much time youâll take to pay it off. Here are some alternative options.
If you donât have cash available in your virtual wallets or debit cards, PayPal Credit can be a convenient way to get cash fast to your friends and family, but it comes with fees and doesnât allow you to advance cash to yourself. Youâll also need to be careful and make sure pay off your balance on time to avoid a hefty interest charge.