PayPal Credit’s 6-Month Financing Comes With One Big Risk

PayPal offers customers six months to pay off qualifying purchases without interest. But miss that deadline, and the deal can get expensive fast.

Customers using the PayPal Credit Card or PayPal Credit digital line for a qualifying purchase of $149 or more will be charged interest from the purchase date if they do not pay the promotional balance in full within six months. That’s the catch.

Here’s how the PayPal Credit Card and PayPal Credit digital line work — and how to use them to your advantage. To avoid deferred interest, customers must pay the entire promotional balance within six months. Making only the required minimum payments may not be enough.

PayPal Credit Card customers get special financing on purchases of $149 or more everywhere PayPal or Mastercard is accepted, as long as they pay the promotional balance in full within six months.

A declined application will not affect the customer’s credit score, though an approval triggers a hard inquiry that could temporarily lower it. Once approved, customers must make minimum monthly payments. The PayPal Credit Card has no annual fee.

The PayPal Credit digital line can be used for purchases made through PayPal and offers the same special financing for purchases of $149 or more, as long as the promotional balance is paid in full within six months. Like the PayPal Credit Card, the PayPal Credit digital line has no annual fee.

The PayPal Credit Card and PayPal Credit digital line are both automatically added to a customer’s PayPal wallet for online shopping.

Customers should make their monthly payments on time because late fees can reach $41. Have a plan for making the minimum monthly payments before making a purchase to avoid late fees.

To get the most value from these PayPal credit products, only charge what you can afford to pay off in six months. Six months without interest can be a good deal, but only if you pay the full promotional balance within that time frame.

PayPal also allows customers to pay in four interest-free installments with Pay in 4. Payments are due every two weeks, and PayPal does not charge late fees. Pay in 4 is available for purchases from $30 to $1,500. The first payment is due at the time of purchase, followed by three interest-free payments.

For larger purchases ranging from $49 to $10,000, PayPal customers may choose three-, six-, 12-, or 24-month payment plans with zero money down. Unlike Pay in 4, these monthly payment plans charge interest, so consider that cost when comparing your payment options.

Buy Now, Pay Later services like PayPal’s Pay in 4 are growing in popularity. Delayed payments and interest-free offers can appeal to consumers who want an item but need more time to pay for it.

In 2025, 16% of American consumers used BNPL services when shopping. BNPL use increased 60% between 2021 and 2025, according to Capital One Shopping Research. The research also puts the average amount borrowed by BNPL users at $2,085 across all purchases.