PayPal Credit - BEWARE!

EssexHebridean

I've not done any in-depth research on this, but just from day-to-day reading of the threads on DFW I'd suggest that we are starting to see a significant rise in people including PayPal credit among their debts. I have personally taken Paypal to task a few times on social media about their relentless pushing of their credit service - I certainly see a suggestion to apply for it on EVERY transaction on eBay now, regardless how small that transaction may be, and have also had emails urging me to apply for it. At 19.9% the APR is far from the worst out there, fair enough, but I'd argue that their pushy, constantly in your face" sales technique probably encourages a lot of people who wouldn't normally take credit for the sorts of purchase they are making, to apply.

I'd be interested to hear other people's experiences with this - I assume that once the account is opened you are encouraged to put all future Paypal purchase on to it as well? So it could be that you open it to pay for something needed - like a new fridge or washing machine - and then subsequently add other, smaller purchases to it which will make it mount up far above the original level. How good are they at reminding you about end dates for interest free periods? Does your Paypal account automatically default to using the credit account as your first-line method of payment?

For anyone considering taking that credit - it's the same as anything else - do yo actually need the thing you're purchasing? if so would you usually use credit for it? If not - then use your usual payment method. Above all really stop and think please - and remember that even if a purchase is interest free for 4 months, once that 4 months is up the payments you are making will start making a far lower impact on the outstanding balance due to interest mounting up.

Iwantanewlife

Haha i wrote about this in my diary this morning.

I have Paypal credit, I have a balance of £225 and whilst snow balling it is set to take the min amount each month until i get to it to clear. When i started my debt busting, i changed all my DD to my pay day. Paypal credit included. This was done successfully with an email to confirm. The app showed 'payment scheduled'. The date came and went and the date on the payment changed to the next payment date, in green saying again 'payment scheduled'. I presumed that i had missed the cut off date and so would simply take it on the date it was showing. I have had no emails or correspondence from them at all to say there was any issue. No money was taken from the bank, and i can see the DD is correctly set up within my bank account. This morning, i received a credit monitoring email saying that i now have a missed payment on my file from them and i am in arrears! I have emailed a complaint to them today - no acknowledgement of said email yet.

EssexHebridean

Hmmm - that's really not good! This is the beauty of DD though - as long as it is all set up correctly and the money is there a failure to take the money is down to them, not you!

The more new posters I've seen on here, the more concerned I have been getting about this issue, partly down to the "ease" with which it is presented.

redux

I saw it a few times, including an offer of 3 months interest free credit on spending over £100.

I applied when I was about to buy two items on eBay that added up to £285.

Got a higher credit limit than necessary.

Paid off that £285 just before it became interest chargeable.

I've also put a few eBay purchases on it, and a couple of gig tickets (that vendor has since stopped accepting PayPal), and paid statements in full by debit card manually.

Yes, it does seem to be well-promoted on eBay, by occasional email invites, and could become a problem who rely on it too much and let things run away, same as any other open-ended credit.

EssexHebridean

redux wrote: »

Yes, it does seem to be well-promoted on eBay, by occasional email invites, and could become a problem who rely on it too much and let things run away, same as any other open-ended credit.

Like any credit - managed well it can be fine, useful even. As we all know judicious use of a 0% card for a saved-for purchase where the monthly payments are made carefully and the full balance paid off ahead of the 0% period ending can be brilliant - means that saved up sum stays in an account earning interest and thus earns us a few extra £'s along the way. (I'm currently using a 0% card in just this way myself!) It's the seemingly indiscriminate plugging of PayPal credit that worries me though - and the fact that we are starting to see a lot of people on here where it is probably questionable whether they should in fact have been offered ANY further credit.

I'm curious to know how they work around credit limits too - are they quick to offer increases when people get towards the limit they get given? Is the limit directly based around the size of the initial purchase? Can I ask, Redux - how *much* higher than needed was that limit you got given?

redux

I was going to post it before, but then edited it out. £5000 limit. I haven't been over £350, mostly around £30 to 50

DawnW

I get tired of the frequent emails telling me that I have been 'selected' for this (at oeast once a week), and the pushing when I buy anything on ebay, even tiny purchases Why have I been 'selected'?

I am sure it is useful for some people and situations, but like EH, I worry that it is being pushed at people pretty indiscriminately.

sportsarb

I don't have any great problems with Paypal Credit, they do what most credit providers do, but I did find it amusing and puzzling that they gave me a credit limit of £4500 when I needed nowhere near that amount and had I been using it all would have found it impossible to pay.

Littlewoods did a similar thing, I started off with a credit limit of £900, then I got an e-mail some time after the account was opened telling me that I had a new credit limit of £4000. I requested it be downgraded again and then eventually closed their account because they truly are a scummy company with awful customer service.

sportsarb

DawnW wrote: »

I get tired of the frequent emails telling me that I have been 'selected' for this (at oeast once a week), and the pushing when I buy anything on ebay, even tiny purchases Why have I been 'selected'?

I am sure it is useful for some people and situations, but like EH, I worry that it is being pushed at people pretty indiscriminately.

You possibly already know this but you can unsubscribe from those e-mails. There will be a link at the bottom of the e-mail.

jwil

I hate that it's there every time you pay for something by Paypal. I wish they'd let you have the option to opt out altogether.

EssexHebridean

redux wrote: »

I was going to post it before, but then edited it out. £5000 limit. I haven't been over £350, mostly around £30 to 50

sportsarb wrote: »

I don't have any great problems with Paypal Credit, they do what most credit providers do, but I did find it amusing and puzzling that they gave me a credit limit of £4500 when I needed nowhere near that amount and had I been using it all would have found it impossible to pay.

That sort of limit being set so far in excess of what someone needs worries me even more. I suspect a lot of the people being seemingly indiscriminately given these sorts of limits would not be in a position to repay, down the line, as alluded to above.