PayPal Credit minimum payments

[DaveInAZ]

I made my first deferred interest purchase since Synchrony took over and now requires minimum payment. I made a $119.80 purchase 12/26, and when the statement posted 1/13 I had a minimum payment due of  . . . $27??? By my calculations that means I'll pay it off in just over 4 months, which seems to make their "6 months no interest" pretty misleading. Maybe they lower the minimum payments as the balance decreases? But even if that's how it works you'll still end up paying most of it upfront with just a very small balance the last few months. Small amounts, but just annoying - and insulting since they raised my APR from Comenity's annoying 19.99% to an ridiculous 25.99%, with Fico scores in the 720s and a combined $30k CL among other Sync accounts.

If this is how it's going to work I'll probably close the account. For "medium" purchases of $100-200 I figured the 6 months no interest was worth no rewards, but if you have to pay it off or pay most of it well before the 6 months I might as well put it on my PP Cashback  MC and get 2% cash back.

Anyone have experience on the new PP Credit minimum payments after the first two payments or so?

[Anonymous]

My guess is $27 is the lowest min payment they allow. It likely won't change. If it was a $27.50 charge it would still be $27 min payment.
Why would someone need 6 months to pay off $120 anyway?

[Anonymous]

"Standard Purchases, Cash Advances and No Interest if Paid In Full Purchases
The payment due for Standard Purchases, Cash Advances and No Interest if Paid In Full Purchases balances will be the greatest of:

• $27.00, or $38.00 if you failed to pay at least the Minimum Payment Due by the Payment Due Date in any one or more of the prior six Billing Cycles; or
• 3% of these balances on the Account on the last day of the Billing Cycle, rounded down to the nearest whole dollar; or
• 1% of these balances on the Account on the last day of the Billing Cycle, rounded down to the nearest whole dollar plus:
• Any interest assessed in that Billing Cycle; and
• Any Late Fees or Return Check Fees assessed in that Billing Cycle."

https://www.paypal.com/us/smarthelp/article/how-is-my-paypal-credit-minimum-payment-due-calculated-f...

Looks like there's a minimum now

[Pikaboo-icu]

It believe it's no interest but not no payments now. 

I've never used the deferred interest plan for anything under $500 and even then paid it off fairly quickly.

I know they offer the 6 months deferred for $99/$100 purchases but I've never used it.

You're still getting the credit at no interest. 

[FinStar]

I guess I don't see it as insulting because we've often seen through the exchange of different servicers for different products that APRs tend to fluctuate and favors the issuer, not the consumer. Even at 19.99% from its predecessor, it's somewhat high (which I hope you realize that's literally 20% if you adjusted the margin by .01%) to even consider carrying any type of balance.

IIRC, the minimum payment amount sounds about right given the balance, but I'd have to dig through the revised T&Cs to see how these minimum payment amounts are assigned which would likely fluctuate in the presence of another deferred promo.

I tend to use it as a 'float' with larger transactions, but PIF when the balance cycles so I rarely use (if at all) the deferred option.

[DaveInAZ]

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@Anonymous wrote:
My guess is $27 is the lowest min payment they allow. It likely won't change. If it was a $27.50 charge it would still be $27 min payment.
Why would someone need 6 months to pay off $120 anyway?

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I don't, that's why I said if that's how it works I'll just put those kind of charges on a 2% card that I PIF monthly and close PP Credit, it's just covenient sometimes. And FYI, the purchase needs to be $99+ for the 6 months, a $27.50 charge would need to be PIF by the next due date or get hit with interest.

But if they're going to advertise "6 months no interest" and then make you pay it off well before the 6 months that's known as False Advertising.

[Anonymous]

Now I see what you are saying. It would have to be paid in under 6mo by default. Maybe it's somehow witen in the terms. Poor choice of words.

[Anonymous]

They state "No interest will be charged on the purchase if you pay it off in full within 6 months." I guess the word "within" makes all the difference. It's not by 6mo but within. I agree it seems somewhat misleading.

[DaveInAZ]

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@Anonymous wrote:
Now I see what you are saying. It would have to be paid in under 6mo by default. Maybe it's somehow witen in the terms. Poor choice of words.

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It's not poor choice of words, it's false advertising in my opinion, or at that very least misleading:

And when you click "See Terms" you get this:

Purchases of $99+: No Interest if paid in full in 6 months on purchases of $99 or more.

• Interest will be charged to your account from the purchase date if the balance is not paid in full within 6 months.
• A minimum monthly payment is required and may or may not pay off the promotional purchase by the end of the 6 month period.

I think it's very misleading: They don't tell you the amount of the "monthly minimum payment" and the "may or may not pay off the promo purchase in 6 months" actually work out to if you take advantage of this for not much more than the $99 we advertise we'll make you pay it off in half that amount of time with minimum payments.

But you were right, it's a piddling amount, if someone needs 6 months to pay off $120 they probably shouldn't have lines of credit. It was just convenient sometimes, and under the old no payments no interest I'd divide the amount by 6 and make those payments monthly to make sure I didn't get hit with the accured interest.

I'll just pay this in full and close the account, with these new terms it's better to put these kind of purchases on a 2% card I PIF monthly.

[Pikaboo-icu]

I understand your frustration but if you read the last line, it's pretty clear.

"A minimum monthly payment is required and may or may not pay off the promotional purchase by the end of the 6 month period."

sorry, I have to disagree that it's misleading; it's pretty explicit. 

But I understand the frustration..