PayPal Credit 0% allocation

scot_sparky

I have 2 credit agreements on PayPal credit, the first I have had for 6 months and is 2 years interest free on the full amount, the other is an apple purchase and is 4 months interest free if paid within 4 months ending in Nov 2019. I was making an over-payment to pay of the 4 month one in full before the interest started but have since noticed that the 2 years 0% agreement is using the over-payment and is showing that it is paid off, I cannot see anyway to allocate a payment to a specific agreement and contacted PayPal who say I cannot do this either, Is this acceptable as I thought that with credit the higher interest transactions got paid off first or at least asked what transaction to allocate payment.

Any help would be appreciated,
At the moment it looks like I'll have to pay in full in Dec 2019 but should have had 0% for another year.

[Deleted User]

scot_sparky wrote: »

Is this acceptable as I thought that with credit the higher interest transactions got paid off first

That's correct. But you don't appear to have a higher rate transaction - they are both at 0%.

When one goes to a higher rate, payments will be directed to that balance.

scot_sparky

Yes I can see that and agree but paypal could set up so a use can choose if there are 2 with different t&c's, Only if like for like then first agreement should be paid first. Although no rules for this I don't think.

[Deleted User]

Yes, they could, but they're not required to do so.

Pesman66

I would like to reopen this thread as this speaks right to an issue I have in respect of how PP credit allocates payments. PP are unusual as the 0% credit amounts in a single account are not ‘lumped together’ like a typical 0% credit card but are, instead, offered across different time periods via a range of retail channels. This is then worked in their favour as any overpayment is directed to the longer term products (where you should rightly expected to have had the full term to pay off the amount). Instead the shorter 3 and 4 month products are left with higher balances until they flick to becoming interest bearing. Surely this is not in the spirit of credit regulations? Even if it may be legal. The regulations do not really cater for this kind of credit. As an example, I recently bought two watches using PayPal. On one the retailer offered 12 months interest free via PP and on the other I used a standard 4 month offering to purchase on eBay. Whilst I loved the 12 month purchase, I quickly realised that the other was not for me, I sold it on (as I couldn’t return it) and recouped what I had spent. I then paid this onto my PP credit assuming the more recent 4 month purchase would have the funds allocated so I could avoid any risk to the eBay purchase attracting interest. Instead it got allocated to the 12 month product leaving me with an untouched 4 month product that was still going to attract interest despite me no longer owning it. I contacted PP and they said that there were unable to apply my payment to the 4 month product until it had become interest bearing. As such I had to get the payment refunded and leave the balance on the account until the 4 months expired and became interest bearing - I then was able to pay it off. Surely you should be able to choose where your payments are allocated and, if not, surely PP should allocate any over payments to the product that will attract interest in the shortest time. It really feels like current regulations need reviewing or PP need to change the policy in our favour not theirs.

[Deleted User]

They could, but then they would run far fewer 0% offers.

They'll have found that this business model works better for them.

Dandytf

this is an excellent thread OP.
I'm about to start repaying xps13" over 12 mths 0% via paypal credit.
Sounds as though if I were to take another agreement, then repayments are allocated by PayPal , rather than your choice of agreement.
I only have access to another 259 credit approx, no plans to use any time soon.
Did PayPal notify you of when 1st payments were due.
thanks

molerat

Paypal credit works the same as the majority of credit cards using the "normal" allocation of payments as opposed to the LBG / MBNA method .  According to their published order of payments monthly instalment plans are paid off first irrespective of interest rate and normal offers are paid off with the standard first ending method. 
https://www.paypal.com/uk/webapps/mpp/paypal-virtual-credit/faq

Dandytf

@molerat
thanks

just opened up a PayPal Credit account, when is my payment due?

We will automatically send you monthly reminders to notify you of when your payment is due. We’ll ask you to make your first payment around 35 days from when your PayPal Credit account was opened.

redux

molerat said:

Paypal credit works the same as the majority of credit cards using the "normal" allocation of payments as opposed to the LBG / MBNA method .  According to their published order of payments monthly instalment plans are paid off first irrespective of interest rate and normal offers are paid off with the standard first ending method. 
https://www.paypal.com/uk/webapps/mpp/paypal-virtual-credit/faq

Actually, reading that, it might not be quite as bad as some assumptions above. What might be causing slight confusion is the long 0% offer is instalments whereas the 4 month offer isn't obliged to be spread in equal instalments.

The efficient way to pay things back is the instalment on the 12 month offer, plus all of the new purchases appearing that month. Personally I'd round up a bit the first time to see if that went towards minimum on the 4 months, or to the long offer. Any surplus over that might go to the long offer; if so don't overpay, hold on to it to be ready to pay the 4 month part shortly after interest becomes chargeable. If not it would be going towards the 4 month offer anyway.