PayPal, one of the world’s largest internet payment services, recently announced that its PayPal Credit feature is now available in the UK. This simple addition to a standard account allows users to purchase items on interest-free credit for up to four months. We’ll show you how to set up and use PayPal Credit so that you can buy that shiny new smartphone, laptop, or tablet that you’ve had your eye on. See also: How to stay safe shopping online

How to use PayPal Credit: Applying for the service

As this is a credit service like any other, you’ll need to apply to PayPal and be approved before you can start spending. Of course you’ll need to be an existing PayPal customer, so if you haven’t already set up an account just visit and sign up for free.

To begin the PayPal Credit process head over to where you’ll find a large blue Apply Now button. Clicking this will take you through the various forms required to open a credit account, and PayPal says that this takes less than ten minutes and you’ll be given the decision immediately.

How to use PayPal credit

To qualify for PayPal Credit you’ll need to meet the following criteria;

  • Be a UK resident aged 18 years or older
  • Not currently declared bankrupt
  • Have a good credit history
  • Have an income greater than £7,500 per year

Once the forms are completed and you’ve been approved you can begin to use the service.

How to use PayPal Credit: Benefits and costs

On any purchase with a total value of £150 or more you’ll receive four months of interest free credit. If you pay the balance off during this time then you’ll have no additional costs. Any outstanding amounts at the end of the four months will be charged at a variable rate of interest, with PayPal indicating that this is usually around 18 percent APR.

PayPal Credit has an assumed limit of £1200, there are no yearly fees, and the only running cost is a £12 fine for late payments. To avoid this PayPal recommends the user sets up a monthly direct debit to service the outstanding bill. No plastic card or PIN number will be issued, instead PayPal Credit is a totally digital service that uses your phone, tablet, or PC to manage the account.

How to use PayPal Credit

How to use PayPal Credit: Making purchases

Now that PayPal Credit is up and running all you need to do is visit a site that accepts PayPal as a method of payment, which is quite a lot of them, then when you get to the Checkout select PayPal, log into your account, and then select PayPal Credit. That’s it. The items will be charged to your PayPal Credit account rather your standard PayPal one, and you’ll have four months to pay it off before the interest kicks in.

See also: How to use Apple Pay