Confused about Paypal credit APR/interest

[jamesfarr1]

Hello,

I'm thinking about applying for paypal credit but I'm slightly confused. I have never borrowed money or got anything on finance before so I don't really know the terms well. I'm looking at buying something for £740 using paypal credit - the interest p.a is 0.0% but I think there's 17.9% APR I. Does this mean I'll pay exactly 0.0% extra or 17.9% extra on the £740?

Thanks, James

[Quandary]

This may help:

“Annual percentage rate”  or "APR" is a little misleading.   You are not charged interest on your balance once a year but, your interest is charged on a daily basis.

Basically here's how it works out (or close enough).

Let's assume your current APR is 19.99%.

If you divide that by 365 days a year, your daily rate is .054%.

For this example let's assume your current balance is $1300.00.

If you take the daily % rate x the current balace or .054% x $1300.00 = .$70 a day.

Next for an average - take the daily amount x 30 days or $.70 x 30 = $21.00 a month.

The total amount you pay will change based on your balance however, your average daily % remains at .054%.

If you pay your balance in full every month you don’t get charged interest.

[DPCreations]

When PayPal Credit is offered at time of purchase you would have 1 or more options, each with separate terms, so you need to look at the terms of the options very carefully before you make the purchase.

Even if you appy for and get a PayPal Credit account there is no guarantee that you will be able to use it when you want, so don't try to figure out how you can borrow money to make a purchase; it may never even be offered.

The options presented (if available) will be promotional options and not like regular credit cards.  They are enticements to get you to use PayPal Credit, even with the chance that you will fail to meet the payment optiosn as that is when PayPal Credit makes a LOT of money.

Here's how the 6 or 12 month payment works.  All you need to do is pay off in full within the promotitional time period and you owe no interest.  During the promotional period interest WILL accrue but you will not have to pay it IF you pay off on time.  If you fail to pay within the promotional time period the interest will then be added to the account and you will now have to pay it.

If you have a 12 or 24 month equal monthly payments with no interest it is also conditional on paying off with NO late payments.  If you fail, even once, then the accrued interest will be added.