topic Re: PayPal Credit Interest Confusion in Credit Cards

PayPal Credit Interest Confusion

Queen_Etherea — Wed, 03 Apr 2019 15:59:38 GMT

I’m having a hard time understanding my PayPal Credit account. It says “No interest if paid in full by *this date*” I’ve made a few purchases over $100, and it hasn’t been a full 6 months for any of the purchases. In fact, it’s only been about 3 months. I was looking at my statement and noticed I was charged $6.32 interest last month. How is this possible if it clearly states that NO INTEREST will be applied if paid in full by 6 months? Am I missing something here?

Also, I tried to pay off one of the purchases by making a payment for that exact amount. For example: I bought something from Lego.com that was $108.81, so I made a payment of $108.81. It still shows on there as if I haven’t paid it. How do apply a payment to that specific purchase so that I won’t accrue interest? I've made plenty of large payments on this account, yet all of my purchases still say "No Interest if paid in full by Aug/Sept 2019"

Thanks for the help!

Re: PayPal Credit Interest Confusion

AverageJoesCredit — Wed, 03 Apr 2019 17:07:22 GMT

Uh oh, i think one of our CLs had an issue like this recently. I belive it was @DaveInAZ if im not mistaken. I think his issue was the minimum payments for 6 months did not equal out . Hopefully he can stop by to shed some light

Re: PayPal Credit Interest Confusion

FinStar — Wed, 03 Apr 2019 17:36:06 GMT

Just a quick question for clarification OP, did your purchase(s) meet the criteria for the 6-month promotion? The reason I ask is because a variety of the merchants do not offer it even if PayPal Credit is selected for any transactions >$100. In other words, it is treated as a non-promotional transaction.

You would be able to confirm via the electronic statements which breaks out the promotions (as applicable) including the expiration date for each one (if multiple 6-month promotions are active).

A variety of transactions qualify and usually before final payment will confirm the 6-month deal.

Re: PayPal Credit Interest Confusion

Queen_Etherea — Wed, 03 Apr 2019 18:18:00 GMT

@FinStar wrote:
Just a quick question for clarification OP, did your purchase(s) meet the criteria for the 6-month promotion? The reason I ask is because a variety of the merchants do not offer it even if PayPal Credit is selected for any transactions >$100. In other words, it is treated as a non-promotional transaction.

You would be able to confirm via the electronic statements which breaks out the promotions (as applicable) including the expiration date for each one (if multiple 6-month promotions are active).

A variety of transactions qualify and usually before final payment will confirm the 6-month deal.

It specifically says on my statement on each purchase that if paid in full within 6 months, it will not be charged interest. It even has the interest accrued that will be applied if not paid in full. Every single purchase looks like this:

Re: PayPal Credit Interest Confusion

McNugget — Wed, 03 Apr 2019 18:25:42 GMT

Do you have trailing interest from an outstanding balance prior to the 0% purchases?

Re: PayPal Credit Interest Confusion

Namaste7 — Wed, 03 Apr 2019 18:27:37 GMT

OP, you may have to provide more info for anyone to get you to the right answer. PPC offers deferred interest plans for purchases of $99+. If the balance is paid within 6 months (which could be slightly longer or shorter based on the timing of the purchase in relation to the bill cycle date), no interest will post to your account.

Under Synchrony, a minimum payment is required, irrespective to the purchase being on a deferred interest plan or not. Let's assume you made a purchase with a deferred interest date of May 5 and you had two additional purchases on deferred interest plans

Purchase 1 - Remaining balance of $100 - deferred interest end date of 5/5/2019
Purchase 2 - Remaining balance of $100 - deferred interest end date of 9/5/2019
Purchase 3 - Remaining balance of $100 - deferred interest end date of 10/5/2019

When your May statement generates, you minimum payment due may b/t $27-$30. However, the amount you need to pay to avoid interest on Purchase 1 is $100. In the month a deferred interest plan expires, Synchrony applies the payment to the purchases with the deferred interest end date set to expire earliest.

If you paid $150, $100 would payment off Purchase 1 and $50 would reduce the Purchase 2 balance. AFAIK, you cannot adjust your payment so that it goes to Purchase 3 in lieu of Purchase 1.

I use autopay to debit the minimum payment due and I set up additional payments to ensure the plans are PIF within the 6 month period.

Re: PayPal Credit Interest Confusion

FinStar — Wed, 03 Apr 2019 18:28:24 GMT

The screenshot definitely helps so thanks for providing that.

Just curious, since a minimum payment is required and applies to each promotional balance, did you meet that for both from the moment these two transactions were billed? What payments did you make and when?

Re: PayPal Credit Interest Confusion

Namaste7 — Wed, 03 Apr 2019 18:30:31 GMT

@Queen_Etherea wrote:
It specifically says on my statement on each purchase that if paid in full within 6 months, it will not be charged interest. It even has the interest accrued that will be applied if not paid in full. Every single purchase looks like this:

Accrued interest is not charged interest. Each month the balance is not paid in full, they are informing you of the interest accrual that would be applied if the balance isn't paid by the plan end date.

Re: PayPal Credit Interest Confusion

Queen_Etherea — Wed, 03 Apr 2019 18:31:34 GMT

@Namaste7 wrote:
OP, you may have to provide more info for anyone to get you to the right answer. PPC offers deferred interest plans for purchases of $99+. If the balance is paid within 6 months (which could be slightly longer or shorter based on the timing of the purchase in relation to the bill cycle date), no interest will post to your account.

Under Synchrony, a minimum payment is required, irrespective to the purchase being on a deferred interest plan or not. Let's assume you made a purchase with a deferred interest date of May 5 and you had two additional purchases on deferred interest plans

Purchase 1 - Remaining balance of $100 - deferred interest end date of 5/5/2019
Purchase 2 - Remaining balance of $100 - deferred interest end date of 9/5/2019
Purchase 3 - Remaining balance of $100 - deferred interest end date of 10/5/2019
When your May statement generates, you minimum payment due may b/t $27-$30. However, the amount you need to pay to avoid interest on Purchase 1 is $100. In the month a deferred interest plan expires, Synchrony applies the payment to the purchases with the deferred interest end date set to expire earliest.

If you paid $150, $100 would payment off Purchase 1 and $50 would reduce the Purchase 2 balance. AFAIK, you cannot adjust your payment so that it goes to Purchase 3 in lieu of Purchase 1.

I use autopay to debit the minimum payment due and I set up additional payments to ensure the plans are PIF within the 6 month period.

Ok so if I already paid over that purchase amount, why is that purchase still accruing interest? Like I paid $400 last month, yet all those purcahses are still showing how much interest will be applied if not paid in full. So do I have to wait until the 6 months are up for that purchase to "go away" so to speak? Have my payments already been applied to that first Lego purchase?

Re: PayPal Credit Interest Confusion

Queen_Etherea — Wed, 03 Apr 2019 18:33:43 GMT

@McNugget wrote:
Do you have trailing interest from an outstanding balance prior to the 0% purchases?

Oh crap, possibly? I bought something that was $50 after I made about 4 purchases. I found this on their website, which explains how payments are applied, and kind of helps to clear things up:

Minimum Payments:

Monthly plan payments on Easy Payments purchases.
Deferred Interest Purchases where the promotional period will end in the next two billing cycles. If you have multiple promotions expiring in the same billing cycle, we'll apply your payment to the oldest promotion first, based on the purchase date.
Interest then fees.
Balances with a lower than standard Annual Percentage Rate (APR) (e.g. "90 Day Grace" and "Balance Prior To") in order of low to high APR, or in case of multiples with the same APR, in order of low to high balance.
Existing standard purchases and cash advance balances in order from lowest to highest APR.

Excess Payments:

Deferred Interest Purchases where the promotional period will end in the next two billing cycles
Standard purchases in order from highest to lowest APR
Monthly plan payments on Easy Payments purchases in order from highest to lowest APR
Deferred Interest Purchases expiring more than two billing cycles from the date we receive your payment, in order of their expiration date
Standard purchases that have occurred on your account since your last statement date
Promotions with a 0% APR until the balance is paid in full in expiring order
Amounts in dispute

Re: PayPal Credit Interest Confusion

Queen_Etherea — Wed, 03 Apr 2019 18:35:36 GMT

@Namaste7 wrote:
@Queen_Etherea wrote:
It specifically says on my statement on each purchase that if paid in full within 6 months, it will not be charged interest. It even has the interest accrued that will be applied if not paid in full. Every single purchase looks like this:

Accrued interest is not charged interest. Each month the balance is not paid in full, they are informing you of the interest accrual that would be applied if the balance isn't paid by the plan end date.

Yes, I understand that, but I was actually charged $6 interest and was wondering where that came from. Another poster helped clear that up for me. I had some purchases under $100 that were made after several of these deferred ones and had a balance left on my account.

Re: PayPal Credit Interest Confusion

Namaste7 — Wed, 03 Apr 2019 18:36:24 GMT

IME, the remaining balance amount will also update to $0 once the payment processes and the purchase details disappears after the statement closes. You should check the payment status to make sure it's Complete and not pending or processing.

Re: PayPal Credit Interest Confusion

DaveInAZ — Wed, 03 Apr 2019 18:38:54 GMT

@Queen_Etherea wrote:
@FinStar wrote:
Just a quick question for clarification OP, did your purchase(s) meet the criteria for the 6-month promotion? The reason I ask is because a variety of the merchants do not offer it even if PayPal Credit is selected for any transactions >$100. In other words, it is treated as a non-promotional transaction.

You would be able to confirm via the electronic statements which breaks out the promotions (as applicable) including the expiration date for each one (if multiple 6-month promotions are active).

A variety of transactions qualify and usually before final payment will confirm the 6-month deal.
It specifically says on my statement on each purchase that if paid in full within 6 months, it will not be charged interest. It even has the interest accrued that will be applied if not paid in full. Every single purchase looks like this:

Somewhere on the statement it should detail on what balance the interest was charged. Did you perhaps make a small (under $100) purchase, that's easy to do if you have PP Credit as your preferred payment source? If you have multiple $100+ deferred interest purchase and make a small purchase I have no idea how PP Credit applies a payment, although under the CARD Act they have to apply payments first to the higher interest balance. But if you made a small purchase that your payment did not fully cover than the interest could be from that.

Re: PayPal Credit Interest Confusion

Anonymous — Wed, 03 Apr 2019 18:43:35 GMT

Does CARD Act even apply to a line of credit? I wouldn’t think it would.

This account seems like a nightmare to juggle different types of purchases on. Probably best to use it for promos and leave it alone otherwise.

Re: PayPal Credit Interest Confusion

Namaste7 — Wed, 03 Apr 2019 18:51:26 GMT

@Anonymous wrote:
[...]

This account seems like a nightmare to juggle different types of purchases on. Probably best to use it for promos and leave it alone otherwise.

Agreed. To avoid confusing myself, I only use the account for purchases greater than $100. For purchase below that amount or for purchases I plan to PIF within 30 days, I use a different payment source; thankfully, PayPal makes it easy to select a different payment type.

Re: PayPal Credit Interest Confusion

Queen_Etherea — Wed, 03 Apr 2019 18:52:59 GMT

@Anonymous wrote:
Does CARD Act even apply to a line of credit? I wouldn’t think it would.

This account seems like a nightmare to juggle different types of purchases on. Probably best to use it for promos and leave it alone otherwise.

You are absolutely right! It was a mistake as I had the PayPal Credit set as my preferred payment method and bought a few things online that were under $100. Didn't mean to use that account, but oh well. It's $6 and not a big deal, but I won't be making this mistake again. I've only been using it to pay for new clothes because I got a promotion at work and have to dress a lot nicer and I didn't have a lot of "nice" clothes. Well, besides that one Lego purchase that I bought for my son for Christmas...

Re: PayPal Credit Interest Confusion

Anonymous — Wed, 03 Apr 2019 18:54:55 GMT

@Namaste7 wrote:
@Anonymous wrote:
[...]

This account seems like a nightmare to juggle different types of purchases on. Probably best to use it for promos and leave it alone otherwise.
Agreed. To avoid confusing myself, I only use the account for purchases greater than $100. For purchase below that amount or for purchases I plan to PIF within 30 days, I use a different payment source; thankfully, PayPal makes it easy to select a different payment type.

I will probably pick up PayPal Credit this summer because I am going to be buying a lot of computer parts as early as August of this year and Amazon isn’t always the cheapest but I will definitely keep my PayPal Cashback as my primary.

Re: PayPal Credit Interest Confusion

Anonymous — Wed, 03 Apr 2019 18:56:01 GMT

@Queen_Etherea wrote:
@Anonymous wrote:
Does CARD Act even apply to a line of credit? I wouldn’t think it would.

This account seems like a nightmare to juggle different types of purchases on. Probably best to use it for promos and leave it alone otherwise.
You are absolutely right! It was a mistake as I had the PayPal Credit set as my preferred payment method and bought a few things online that were under $100. Didn't mean to use that account, but oh well. It's $6 and not a big deal, but I won't be making this mistake again. I've only been using it to pay for new clothes because I got a promotion at work and have to dress a lot nicer and I didn't have a lot of "nice" clothes. Well, besides that one Lego purchase that I bought for my son for Christmas...

At least you found out with just a couple bucks of interest, could definitely have been worse!

And I feel you on the “nice” clothes - if it’s not jeans and a T-shirt, good luck getting me to put it on haha.

Re: PayPal Credit Interest Confusion

Queen_Etherea — Wed, 03 Apr 2019 21:22:39 GMT

@Anonymous wrote:
@Queen_Etherea wrote:
@Anonymous wrote:
Does CARD Act even apply to a line of credit? I wouldn’t think it would.

This account seems like a nightmare to juggle different types of purchases on. Probably best to use it for promos and leave it alone otherwise.
You are absolutely right! It was a mistake as I had the PayPal Credit set as my preferred payment method and bought a few things online that were under $100. Didn't mean to use that account, but oh well. It's $6 and not a big deal, but I won't be making this mistake again. I've only been using it to pay for new clothes because I got a promotion at work and have to dress a lot nicer and I didn't have a lot of "nice" clothes. Well, besides that one Lego purchase that I bought for my son for Christmas...
At least you found out with just a couple bucks of interest, could definitely have been worse!

And I feel you on the “nice” clothes - if it’s not jeans and a T-shirt, good luck getting me to put it on haha.

Yup! Literally every purchase on my PayPal Credit account is from Lulu's lol. Been buying a lot of dresses from them because a.) they're super cute and b.) I always have a 20% off code. I hate shopping at the mall/stores, so I'll buy a couple of dresses, try them on, and if they don't fit/I don't like them, they have free returns! All I gotta do is drag my buns to the post office.