PayPal Credit - BEWARE!

GeorgianaCavendish

Bumping this thread as "Buy Now Pay Later" data (such as Paypal Credit) will now be included in TransUnion and Experian credit reports : https://www.moneysavingexpert.com/news/2022/02/experian-to-follow-transunion-s-decision-to-include-buy-now--pay/ 

EssexHebridean

Nice one GC - thank you!

It almost feels like every second thread we see on here from a new poster in a panic includes PP credit now. 

dazzaofdagenham

Just been reading all these posts about PayPal credit and debt.

think I’m almost the opposite.

I’ve had PayPal credit for a few years now and started out with a 1K limit.
spent loads on it via the 3 months free interest and never paid a penny in interest to PayPal credit

yet I seem stuck at a credit limit of 1K

wmp92

PayPal credit has really screwed me over. My poor decision making, but now I’ve tried to take control of my debt, I haven’t been able to shift PayPal credit onto my 0% balance transfer card like my other debt and it’s sat accruing interest. I’m prioritising paying that off first but it’s not easy. I really regret every using it!

EssexHebridean

Just bumping this back to the top again! 

Graham1982

Hello everyone:

I just thought I would add my thoughts onto this, although not strictly related to PayPal Credit. I do think that similar tactics are employed by credit referencing agencies such as Clear Score and Totally Money, especially when acting as brokers. I think earlier in this thread people were talking about the spurious/unscrupulous marketing tactics that are used with PayPal - you have been selected for x, etc. However, credit reference agencies do the same and I think they are more at fault as it is likely that if you are on their sites checking your score, you might feel the need to fix said score, or have problems with spending. 

I have just recently joined Clear Score about a week ago, and I receive an email every two days saying "Graham, here are your top credit cards" and "Are you pre-approved for our credit cards and loans?" The deliberate use of direct address here and sense of intrigue created in these subject lines is deliberate. Again, I don't have to take out this credit, I should be responsible etc, but when getting credit is sold as exclusive or an achievement, another one, "Graham, here's what your credit score unlocks", it is very worrying.

Gamifying credit products with phrases such as "unlocks" is a concern. Getting such products shouldn't be seen as achievements or levelling up.

Just my thoughts.

Graham

EssexHebridean

The most worrying thing about this way of marketing IMO is that they pretty much never bother to tell the people they are marketing to that the credit score in itself is a work of fiction that means anything only to them - the number of people who are astonished when you tell them that their "credit score" is a made up number is astonishing! 

And I completely agree that we should be striving to encourage companies like this away from the sort of marketing that pushes people to see being accepted for credit as some sort of life achievement - I have pulled banks and building societies up on exactly that on social media before - and would urge anyone else concerned to do the same. (And similarly if you see marketing encouraging people to take credit to pay for the "holiday of a lifetime" or the  new must-have gadget).  

vacheron

EssexHebridean said:

The most worrying thing about this way of marketing IMO is that they pretty much never bother to tell the people they are marketing to that the credit score in itself is a work of fiction that means anything only to them - the number of people who are astonished when you tell them that their "credit score" is a made up number is astonishing! 

And I completely agree that we should be striving to encourage companies like this away from the sort of marketing that pushes people to see being accepted for credit as some sort of life achievement - I have pulled banks and building societies up on exactly that on social media before - and would urge anyone else concerned to do the same. (And similarly if you see marketing encouraging people to take credit to pay for the "holiday of a lifetime" or the  new must-have gadget).  

I remeber a long time ago that someone, (it may have even been Martin), suggesting that an easy solution would be to make it a legal requirement to change the word "credit" in this context to the word "debt".

"debt card", "interest free debt", "get debt now", "good debt rating", "pre approved debt". 

.... doesn't sound like so much of an achievement now does it!

PS. Before someone points out that the words do not mean the exact same thing, I appreciate that, but who honestly takes out "credit" to buy a sofa and then doesn't use it to get into debt?

EssexHebridean

Completely agree! There are situations, certainly - the purchase on a credit card purely for Section 75 which is cleared off the next month, the item purchased on a 0% card while the money sits in savings earning interest...but those cases are very much in the minority. 

Graham1982

Also, I am an English teacher, so perhaps this word analysis is a little too much/pedantic. However, to add to what @vacheron has said, credit is a word that has positive connotations - all credit to you, credit where credit's due, even your bank account is in credit, I have credited your account.

I work in a country (Middle East) where if you get into debt and don't service it, you get put in prison. From the outside this might sound draconian and perhaps some may say barbaric. However, the lending requirements are tighter - you borrow based on bank statements and a salary certificate from your employer - thus you can truly only borrow what you can afford to pay back. There is no credit scoring system with fictional numbers. Banks do offer credit cards but again, they don't give you ridiculous limits as the limits are linked to your salary.

At least the lines here are black and white.

Understanding the financial system in the UK genuinely (in my opinion) does require a qualification, if not training, in financial literacy. I know I am perhaps oversimplifying here but look at the following:

Overdraft - Banks sell these as products for people to use.   Not good things to have at all, signal that you are living beyond                                                                                                  your means

Credit cards                                                                             Aside from the semantics mentioned above regarding 
                                                                                                the wording, ever increasing limits, high interest rates,
                                                                                                people developing massive balances and not clearing them.

Consolidation loans                                                                 High interest, people get them because they have often been                                                                                                      sold the above, not understanding the situation they were                                                                                                          getting themselves into.

Again, I am not advocating that we should throw people into prison for getting into debt but surely there has to be a middle ground where people aren't sold products which are actually damaging in the long run?