PayPal Credit - BEWARE!
Comments
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Martin differentiates between "good debt" and "bad debt" here I believe - a mortgage, to purchase a home, is "good debt". A loan to purchase a moderate level car which is adequate for the purpose and required for travel to work = also "good debt". (I believe he also includes debt taken on to pay for further education in this category)
A purchase on a credit card for section 75 protection purposes is presumably being paid off immediately it becomes due, so I'd suggest that barely even comes under the heading of credit at all.
Similarly if you already had the money for purchasing the car through PCP to enable you to pay it off right away, to all intents and purposes that was a paperwork exercise rather than a need to use credit for that purchase. I've done something similar with my purchase earlier this year of a second hand car for a little over £8k - paying a chunk of the spend on a cashback CC (section 75 again, plus the cashback) then transferring fee-free to a 0% BT card. The money for the balance on the card is sitting there waiting to be paid off when the 0% ends therefore not having those cards would not have prevented me in any way from buying the car.
My point was not that people who budget don't use credit - it was that they shouldn't NEED to, if their budget is working effectively, aside from in the case of the "good debt" mentioned above.
It's interesting you say about your Paypal credit not being set as the default - is that because you chose to set your default payment to where it had been previously though, or did PayPal simply never make it the default option for you to pay on credit? if the latter, that suggests that they are picking and choosing who to set which way, and that really WOULD be cynical IMO!🎉 MORTGAGE FREE (First time!) 30/09/2016 🎉 And now we go again…New mortgage taken 01/09/23 🏡
Balance as at 01/09/23 = £115,000.00
Balance as at 31/12/23 = £112,000.00SOA CALCULATOR (for DFW newbies): SOA Calculatorshe/her0 -
EssexHebridean wrote: »Martin differentiates between "good debt" and "bad debt" here I believe - a mortgage, to purchase a home, is "good debt". A loan to purchase a moderate level car which is adequate for the purpose and required for travel to work = also "good debt". (I believe he also includes debt taken on to pay for further education in this category)
A purchase on a credit card for section 75 protection purposes is presumably being paid off immediately it becomes due, so I'd suggest that barely even comes under the heading of credit at all.
Similarly if you already had the money for purchasing the car through PCP to enable you to pay it off right away, to all intents and purposes that was a paperwork exercise rather than a need to use credit for that purchase. I've done something similar with my purchase earlier this year of a second hand car for a little over £8k - paying a chunk of the spend on a cashback CC (section 75 again, plus the cashback) then transferring fee-free to a 0% BT card. The money for the balance on the card is sitting there waiting to be paid off when the 0% ends therefore not having those cards would not have prevented me in any way from buying the car.
My point was not that people who budget don't use credit - it was that they shouldn't NEED to, if their budget is working effectively, aside from in the case of the "good debt" mentioned above.
The point I was trying to make is that those who are good at budgeting still can want access to credit rather than paying for everything directly from savings.EssexHebridean wrote: »It's interesting you say about your Paypal credit not being set as the default - is that because you chose to set your default payment to where it had been previously though, or did PayPal simply never make it the default option for you to pay on credit? if the latter, that suggests that they are picking and choosing who to set which way, and that really WOULD be cynical IMO!
If I remember correctly you can opt not to set PayPal Credit as the default when you open up the facility and you can change your default payment option at any time on PayPal.0 -
EssexHebridean wrote: »If people are managing their money properly they won't be using credit for things that they should have budgeted for, will they, so requiring lenders to behave responsibly won't punish them in the least.
You've given the perfect example of that happening in your subsequent post:EssexHebridean wrote: »I've done something similar with my purchase earlier this year of a second hand car for a little over £8k - paying a chunk of the spend on a cashback CC (section 75 again, plus the cashback) then transferring fee-free to a 0% BT card. The money for the balance on the card is sitting there waiting to be paid off when the 0% ends therefore not having those cards would not have prevented me in any way from buying the car.
So if lenders are forced to offer smaller credit limits then that could mean people like you who manage their money properly would have lost out on getting cashback and stoozing the money on a balance transfer card.
So you would be losing out on money which is certainly punishing people who manage their credit responsibly.0 -
I was offered the credit limit I got after a proper vetting process though - one which involved me making a full application and requesting the limit I wanted (Ideally a little higher than I got, in fact, something which I had no issue with as I understood the "on paper" reasons why this would be the case.
I'm utterly bemused how ANYONE can think that offering a £5,000 credit limit for a purchase of £300 can be remotely considered reasonable and responsible?! Particularly when it has already been stated on this thread that PayPal credit do not take into consideration how affordable it would be for someone to pay back purchases to that value of limit?
Ultimately - I did not NEED to use the credit I did for the car purchase - had I needed to then I would have taken the view that I needed to cut my cloth rather differently, and a different level of car would have been purchased OR we would have taken the decision to manage without the second car for a while until the required amount had been saved. As it was, thanks to effective budgeting previously (and having the privilege & level of financial education that allowed for this in the first place) we could have paid upfront for the car we chose in its entirety. So no, expecting lenders to behave responsibly and not lure those who may be more vulnerable into debt is not in any way a problem to me. Ultimately the more important people here aren't those that fall into my - and presumably your - camp, and thankfully most of those of us who do fall into that camp consider that we have a moral responsibility to care for the more vulnerable in society.
The relatively tiny amount I may have "made" by making the purchase in the way I did is not more important to me than trying to ensure that responsible lending - something which is already out there are a requirement, remember - is enforced, no.🎉 MORTGAGE FREE (First time!) 30/09/2016 🎉 And now we go again…New mortgage taken 01/09/23 🏡
Balance as at 01/09/23 = £115,000.00
Balance as at 31/12/23 = £112,000.00SOA CALCULATOR (for DFW newbies): SOA Calculatorshe/her2 -
EssexHebridean wrote: »I'm utterly bemused how ANYONE can think that offering a £5,000 credit limit for a purchase of £300 can be remotely considered reasonable and responsible?! Particularly when it has already been stated on this thread that PayPal credit do not take into consideration how affordable it would be for someone to pay back purchases to that value of limit?
PayPal Credit is like a credit card so them offering a higher limit than the initial purchase is perfectly reasonable because they expect it to be used for further purchases. Imagine how pointless credit cards would be if they set the limit at however much your first purchase was, so why would you expect PayPal credit to do the same?
They also do take into account of affordability, no credit company would offer credit without doing the necessary checks to make sure they can pay it back eventually. If they were actually offering out unaffordable credit they would soon go out of business because they wouldn't get their money paid back, so purely from a business perspective they wouldn't do this.0 -
Lover_of_Lycra wrote: »I have a PayPal Credit account and there is no need to have it set as the default payment method when using PayPal. I still have my current account as the default payment method when using PayPal so for me to use PayPal Credit I have to purposely select to do so.
I don't have a Paypal credit account. I don't want one. What I am complaining about is the fact that every time I buy something and pay by Paypal, the credit option is shown in the list of payment options.
I want the option not to have Paypal credit offered as an option every time I pay for something. I want to be able to say 'don't show this again' or something similar.
I am in debt management, quite frankly, offering me more credit is a completely irresponsible act on their part."If you can dream it, you can do it". Walt Disney1 -
jwil You can opt out of the emails in your marketing preferences as mentioned earlier in the thread - I did my opt out at the weekend. Absolutely agree about wanting to opt out of the "Apply for Paypal credit" thing being pushed at me when I so much as pay for a £2.99 purchase on eBay though. I'm not interested, I'm not GOING to be interested.🎉 MORTGAGE FREE (First time!) 30/09/2016 🎉 And now we go again…New mortgage taken 01/09/23 🏡
Balance as at 01/09/23 = £115,000.00
Balance as at 31/12/23 = £112,000.00SOA CALCULATOR (for DFW newbies): SOA Calculatorshe/her0 -
That's because Ebay own Paypal and the same reason you will not find Paypal on Amazon.0
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Deeeliteful wrote: »That's because Ebay own Paypal and the same reason you will not find Paypal on Amazon.
I'm not quite sure how that's relevant to PayPal credit being pushed for ludicrously low spends, regardless of where they are being made. My point is that it is entirely inappropriate to be suggesting someone takes credit out for such small spends - the £2.99 spend I mentioned was chosen deliberately as I was invited to apply for credit for a spend of exactly that size a couple of weeks back.
I think the ownership path is pretty well known.🎉 MORTGAGE FREE (First time!) 30/09/2016 🎉 And now we go again…New mortgage taken 01/09/23 🏡
Balance as at 01/09/23 = £115,000.00
Balance as at 31/12/23 = £112,000.00SOA CALCULATOR (for DFW newbies): SOA Calculatorshe/her0 -
I bought a new bike for my son for about £400 from an online bike shop (not via eBay) and PayPal credit was one of the payment options. However they were offering 12 months interest free, so it seemed rude not to take it.
I also ended up with a £5000 limit which seems to be the default as almost everyone on this thread seems to have been offered that much. And as I have £66K spread across 10 other cards I think it was stupid of them to even give me that!
Yes, it pops up on the checkout at eBay all the time now, and it is another payment option to make sure you do not select, but to me it is not obtrusive and could come in useful again if another 0% purchase opportunity pops up but I do appreciate that it could be a temptation to those who arent too disciplined.• The rich buy assets.
• The poor only have expenses.
• The middle class buy liabilities they think are assets.
Robert T. Kiyosaki0
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