PayPal’s New Credit Card Offers Interest-Free Financing for Travel. But Watch Out for This Pitfall
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The financing offer may be tempting, but you won’t earn rewards.
If you’ve got your eye on travel this summer, PayPal’s new credit card — a physical version of its digital credit line, called the PayPal Credit Card — can help you spread the cost out over several months.
The PayPal Credit Card, which lets you finance purchases over $149, will be rolled out in the US over the next few weeks. The company also announced a special, limited-time financing offer for travel purchases posted to your account by Jan. 31, 2026. So, you can finance a travel purchase — think hotels, airfare, trainfare, rental cars, etc. — and pay it down over six months without any interest accruing.
“PayPal Credit is one of our most popular products, and customers have long been requesting the ability to use it on the go,” Scott Young, senior vice president and global head of consumer financial services at PayPal, said in a statement.
The PayPal Credit Card could help finance a summer trip by allowing you to spread the expense across six months, but it lacks the usual rewards and benefits — like a welcome bonus, travel protections and annual travel credits — that make travel credit cards truly valuable.
Existing PayPal Credit members will be alerted if their account has been upgraded. You can also apply for PayPal Credit, and depending on your credit history, you may be eligible for the PayPal Credit digital line or the physical PayPal Credit Card. The new card is accepted anywhere Mastercard is. Here’s how it works — and the pitfall to watch out for.
Read more: Klarna Launches New BNPL Debit Card That Lets You Finance on the Fly — but There’s a Catch
How does the PayPal Credit Card’s financing offer work?
With the PayPal Credit Card, you can access six months of no-interest financing for purchases of $149 or more, plus travel purchases during the promotional period. However, if you don’t pay off the balance in time, you’ll be charged retroactive interest from the purchase date at your card’s APR, which could be 20% or more, depending on your terms.
Retroactive interest is usually a risk not worth taking, especially when there are other financing methods available. Buy Now, Pay Later or other credit card offerings don’t hold you hostage with the threat of a higher interest payment should you not pay off the balance in time.
The new card doesn’t charge an annual fee, and your purchases will also get purchase protection, which could be helpful if you need to dispute an order.
What’s the difference between the PayPal Credit Card and the PayPal Cashback Mastercard?
The new, physical PayPal Credit Card is more of a special financing card than a rewards credit card. As long as you pay off your purchases in time, you won’t have to worry about interest charges. Otherwise, you’ll be on the hook for all the interest you would have accrued. But PayPal Credit doesn’t offer any rewards.
The PayPal Cashback Mastercard® is a typical rewards credit card. It offers 3% cash back when you check out with PayPal or 1.5% cash back otherwise. However, it doesn’t offer financing opportunities.
