Is PayPal Credit Safe?
You’ve probably heard of PayPal, but what about PayPal credit? The service allows users to make purchases and pay for them over time. Sounds simple enough, right? And we’d all like to buy essential items without worrying about having money in our bank accounts.
However, you’re probably wondering whether PayPal credit is safe. Find out right here, as we explore how it works, available security features, and available alternatives.
What is a PayPal credit account?
PayPal Credit is a revolving credit line integrated with your account. It allows users to make purchases and pay them off later, often with promotional interest-free periods.
Previously known as Bill Me Later, PayPal Credit lets you make online and in-store purchases without a traditional credit card. Better still, it’s available at millions of stores worldwide.
If you want to access PayPal credit, you’ll go through an application process. Once you’re accepted, you can use it as a payment method when you checkout.
How does PayPal credit work?
In many ways, PayPal credit accounts are similar to traditional credit cards—without a physical presence. Here’s how it works:
- Application: You’ll need an existing PayPal account to access the credit option. PayPal will run a credit check to assess your eligibility and decide whether to accept the application. A previous history of loan defaults or late payments will result in a lower score from credit bureaus.
- Approval: Once PayPal accepts your application, you’ll be offered a credit limit. These limits are based on your income, borrowing history and how much you can afford.
- Purchases: You can make payments through merchants that accept PayPal and repay the amount based on two options (we’ll cover these next).
- Minimum Payments: As with most credit card companies, PayPal has minimum monthly payments. However, contributing more each month reduces your interest.
Repayment options
- Standard Purchases: For transactions of €99 or more, you might qualify for a 0% interest-free period for a set timeframe (often 4-6 months). After this period, interest starts accruing on the remaining balance if not paid in full.
- Smaller Purchases: For transactions under €99, there’s usually no interest-free period. Failing to pay the full amount by the due date can incur interest charges.
Is PayPal credit safe?
Safety is a significant concern for people who make online purchases, and there will always be some risks. However, PayPal employs advanced security features to protect your account and ensure people can’t access your payment information.
It’s also important to remember that traditional credit and debit cards also have security risks. Credit card fraud continues to decrease in Europe, mainly attributable to technological advances (European Central Bank).
Let’s explore PayPal Credit’s security features.
Encryption and data protection
PayPal employs industry-standard encryption to safeguard your personal and financial information.
Encryption measures securely transmit the information to PayPal’s servers when you enter your details, ensuring people can’t intercept it. This protects your personal information and prevents the risks of fraud.
Fraud protection
PayPal takes fraud measures seriously. If you identify fraudulent purchases or unauthorised transactions, report them immediately. PayPal will investigate the issue and assess whether your claim is valid.
If it is, they’ll reverse the charge and restore your account balance, ensuring you don’t pay for someone else’s criminal activities.
Purchase protection
One feature that makes PayPal stand out is itsPurchase Protection program. Customers have the right to file a dispute if their items don’t arrive, are damaged, or experience any other problems.
These measures ensure you can get a free refund and won’t need to worry about scams. They also enable online shoppers to buy items with confidence. However, you must lodge the complaint within 180 days of your purchase.
Regular account monitoring
PayPal credit account holders can monitor transactions through the app or website. The PayPal App lets you check each transaction in real-time, keeping your credit account safe.
Alerts and notifications can be set up to inform you of any account activity, making it easier to spot suspicious transactions quickly and take immediate action.
Two-Factor Authentication
One of the biggest risks of online payments is unauthorised access to your account. Two-factor authentication mitigates this by adding an extra layer of protection.
When you try to access it, PayPal will ask you to input a code sent to your email address or phone, ensuring only you can log in. Unauthorised users won’t be able to access your account, reducing fraud risks.
The benefits of PayPal credit accounts
When deciding whether to apply for PayPal credit, considering your needs and the types of purchases you’ll make can help you make the right choice. The good news is that PayPal offers numerous benefits for consumers looking for convenience, security, and the opportunity to buy things in advance.
Convenience
Convenience is a key selling point of PayPal credit, as applying for an account is easy. The credit links to your existing PayPal account, and you won’t need to carry a physical card.
Due to PayPal’s popularity, millions of retailers accept the payment method, streamlining your checkout process and making it quicker and easier to complete purchases.
Promotional financing offers
PayPal Credit frequently offers promotional financing options. For example, purchases over a certain amount might qualify for interest-free financing if paid off within six months.
These promotions can be a cost-effective way to finance large purchases without incurring interest charges, provided you pay off the balance within the promotional period.
Promotional offers can be tempting, but you’ll still need to pay the money off.
Integration with PayPal
The seamless integration with your PayPal account is another significant benefit. Manage your PayPal Credit account with your other PayPal transactions, and enjoy tracking your spending easily.
A consolidated view of all transactions can facilitate better budgeting and financial planning.
Flexible payments
PayPal Credit offers flexible payment options, making it easier to manage your money. For example, you can pay the balance monthly or make minimum payments to avoid high interest rates.
The main benefit of flexible payments is that they help you manage your cash and avoid financial strain. When you have spare money, use it to clear the balance and enjoy maximum flexibility.
Potential safety risks with a PayPal account
So, now you know the many benefits of a PayPal credit account, it’s time to look at the negative aspects. In general, PayPal is a safe option, but there are always some risks. Understanding them can keep you safe and reduce the risks of fraud.
Phishing attacks
Phishing is a common cyber threat that can put PayPal Credit users at risk. Cybercriminals might send deceptive messages, emails and links to websites that look and seem like PayPal… but they’re not.
The main goal of phishing is for people to access your payment information, and they often use scare tactics to reel victims in. For example, you might receive a notification about suspicious activity on your account, asking you to verify personal information.
Once people have this information, they can access your credit account and make purchases.
Malware
Malware, or malicious software, can access your device and compromise your security. The software can identify your login information, capture keystrokes, and—in severe cases—take complete control of your smartphone, laptop, or tablet.
Emails, downloads and links to untrustworthy sites are the primary sources of malware. Clicking on them could impact your online safety and make your personal information accessible to criminals.
Unsecured WiFi
Public WiFi networks can be beneficial when looking up information, but you should never use them to make transactions or access financial services. Most public networks aren’t encrypted, which makes it easy for criminals to intercept your data and steal your PayPal Credit account information.
Once they access your account, you’ll need to secure it immediately.
Account hijacking
Account hijacking occurs when someone gains unauthorised access to your PayPal Credit account. It’s often caused by data breaches, social engineering attacks or weak passwords.
Using the same password for PayPal and your bank account puts your information at risk, so make sure you opt for the highest security measures.
PayPal Credit safety compared to other payment options
Safety will be at the top of your priority list whether you’re shopping online or in physical stores. Is PayPal Credit the safest option? Well, it depends on how you use the account, and you need to make credit purchases.
Traditional credit cards
Credit card companies use similar features to PayPal, including fraud protection and no liability for fraudulent purchases. They also have advanced fraud detection, authentication and encryption features. However, carrying a physical credit card around means it’s more vulnerable to theft.
Debit cards
Debit cards offer some safety measures, but their main benefit is avoiding interest rates. With a debit card, you’ll make transactions and shop online with the money in your bank account, so you can’t overspend. However, debit cards typically have less safety than credit cards.
Digital wallets
Digital wallets have similar security features to PayPal accounts, including encryption and tokenization. They also issue a virtual account number to protect your personal information. Again, you can only use money that’s in your bank account.
Virtual cards
If security is your top priority, aprepaid virtual card is one of the safest ways to spend money. These cards operate similarly to topping up your mobile, as you can only spend what you load on the card. They also use virtual account numbers and encryption technology to protect your identity.
PayPal Pay
PayPal Pay works similarly to Klarna and other flexible payment services. When making online purchases, you can pay up to four installments, splitting the cost of your items. If you pay on time, you won’t have to worry about a minimum interest charge.
How to use PayPal credit safely
Whether you’re making purchases or want to send money, PayPal remains one of the top platforms. Using a credit account gives you the flexibility to make larger purchases and manage your money—as long as you know how to leverage PayPal safely.
Following these tips gives you peace of mind:
- Be Vigilant: Avoid phishing attacks by carefully checking your emails and URLs. PayPal won’t ask you for sensitive information via your email account. Make sure the URL is from PayPal, as some scammers will change a letter to masquerade as the website.
- Maintain Security: Install reputable antivirus and anti-malware software on all your devices. Keep this software updated to protect against the latest threats. When downloading apps, use official sources like Google Play and the App Store.
- Common Sense: Never use a public WiFi network to make purchases through online retailers or check your PayPal account information.
- Strengthen Your Accounts: Always use unique passwords that aren’t easy to hack. It’s also important to enable all PayPal security features.
- Monitor Your Transaction History: Regularly check your PayPal transaction history and identify unauthorised purchases. You can then flag them up to the dispute services.
Is PayPal safe? The bottom line
PayPal Credit can be a convenient and flexible financing option for those who shop online frequently. Its integration with PayPal, promotional financing offers, and wide acceptance makes it a valuable tool for managing purchases.
Understanding the potential drawbacks, including the impact on your credit score and high interest rates, can help you make the right decision for your needs.
If you’d like to control your spending and enjoy seamless security, a Virtual Green Card allows you to make online purchases and avoid debt.
FAQs
Can PayPal Credit affect my score?
Yes, it can. If you fail to stick to your monthly repayments, you might struggle to open new accounts and borrow money in the future. Make sure you check your interest rates and control your spending.
A poor credit score means PayPal might issue a high interest rate, which can impact your ability to manage money.
Is PayPal credit good for online purchases?
PayPal is an excellent option for online purchases. It enables speedy transactions and easy account management. There’s also no annual fee, which means you won’t pay any maintenance costs for having an account.
What if I'm not accepted for a PayPal Credit account?
If PayPal doesn’t accept your application, it might be due to your credit score. Try to pay outstanding debts and increase your score before applying again.
Order your Virtual Cards online
Apply for a digital prepaid card online and receive the activation code via email within 2 minutes.
