PayPal Credit Advice, Instructions and Examples
As we all know, credit purchases can be dicey sometimes. It is well known that credit cards (or any sort of credit service) can be notorious for hidden fees and high interest rates. As the owner of Wren and Cuff, I don’t feel comfortable offering PayPal credit without making the “fine print” nice and clear for you should you decide to use it to purchase a Wren and Cuff pedal.
The way it works…
PayPal credit is actually a great deal, WITH TWO BIG CAVEATS.
What are the caveats? You are highly, highly, encouraged to pay off your balance within 6 months. Why? Because with PayPal credit, if you pay the balance in full WITHIN 6 MONTHS, you are charged 0% interest and no annual fee. Same goes for late payments. If you make ALL YOUR PAYMENTS on time, there are no fees.
Pretty simple and straight forward, right?
BUT, If you go beyond 6 months and/or start making late payments, this “great deal” quickly becomes not so great. After 6 months you are charged 19.99% interest on your purchase, and, pay attention here, that interest is “deferred” for 6 months assuming you pay off the debt. But after 6 months, the interest that would have accrued if you were paying interest right off the bat, kicks in for the 6 months previous. So, your interest isn’t 0% for 6 months. It is 0% IF PAID OFF within 6 months.
- Buy a pedal for $200
- Monthly payments spread out over 6 months are a bit under $35.
- Pay it off within 6 months, you pay $200, done.
- Buy a pedal for $200 (I’ll be rounding off some #’s here, but they are all close to the real #’s)
- Wait till month 7 to pay (which you are allowed to do).
- At month 7, 19.99% interest that has been on hold for 6 months will immediately be tacked on to the balance. For a $200 purchase, another $20 has been tacked on, so your balance in month 7 is now around $220. If $20 isn’t a big deal to you, then fine, but just know what you are getting into.
From that point on, its basically like any other credit card with a not-so-great interest rate. 19.99% annually, they will offer you tiny “minimum balance” payments that can quickly turn a couple hundred bucks into a lot more than that.
Also, Wren and Cuff has nothing to do with PayPal credit. Once you deal with them, your credit purchase $$ will all be handled through them, which can make “undoing” a purchase a little bit of a pain.
- You buy your $200 pedal with PayPal credit.
- After applying they extend you a credit line.
- Under our 15 day return policy, you get your pedal, decide its not for you, and choose to return it.
- We get the return and refund your purchase via PayPal.
After that, you would be responsible for taking the $200, paying back your credit line, then shutting down the credit line if you decided to do so. That does not happen automatically. On our end, your purchase looks like any other PayPal purchase, we make no more or less from your purchase, and we would do the refund the same as any other PayPal return.
So my advice?
If you want or need the pedal now, you are good at staying organized, and confident that the monthly payment is doable for you, then go for it, and make sure to pay it off within 6 months.
If you know yourself, and know you are the type of person that can fall behind on this sort of stuff, and/or have gotten yourself into trouble with credit in the past, then probably don’t do it.
However, we are all adults, and as long as ya know how it works, and are ok with that, then the choice is yours.
I hope this helps you to make your decision if PayPal credit will work for you.
To see PayPal’s terms and conditions, go HERE.
-Matt/Wren and Cuff
Example payments over 6 months (rounded up).
$200 = $34 mo.
$220 = $37 mo.
$250 = $42 mo.
$300 = $50 mo.