How To Cancel PayPal Credit? The Complete Guide

How To Cancel PayPal Credit

Have you been using PayPal Credit but are now looking to close your account? If you no longer need or want the virtual line of credit, canceling it can be a wise money move.

But how exactly do you go about closing a PayPal Credit account?

In short – pay any balance, contact customer service, get written confirmation, and check your credit report.

This comprehensive guide will walk through the step-by-step process to successfully cancel your PayPal Credit account. We’ll cover:

  • How PayPal Credit works
  • Reasons to close your account
  • Paying off your balance
  • Contacting PayPal to cancel
  • Getting account closure confirmation
  • Watching for impacts on your credit score
  • Alternatives if you still need access to credit
  • Step-by-step instructions for account closure

Let’s start by understanding what exactly PayPal Credit is and how it functions.

What is PayPal Credit?

PayPal Credit, formerly known as Bill Me Later, is a line of credit offered by PayPal that lets you make purchases online and pay for them over time. It’s basically like a credit card, but uniquely tied to your PayPal account and balance.

Here’s an overview of how it works:

  • You’re approved for a revolving credit line up to $20,000 based on creditworthiness. This is your spending limit.
  • There’s no physical card issued. You use the credit online when logged into your PayPal account.
  • Special financing offers are available, like 0% APR on purchases over certain amounts for 6-12 months.
  • The regular variable annual percentage rate is close to 29.24%. This standard rate applies after promotional financing expires.
  • You must make at least the minimum monthly payment, or pay off your full balance by the due date printed on your statement.
  • Interest accrues each month on balances that aren’t paid in full. There’s no grace period for purchases like with most credit cards.
  • All your PayPal Credit account activity gets reported to the major credit bureaus, affecting your credit score.

Now that you understand how PayPal Credit works, let’s look at some of the top reasons you may want to close an account.

Why You May Want to Cancel Your PayPal Credit Account?

Here are some of the most common reasons people decide to close their PayPal Credit accounts:

High Interest Rates

The regular purchase APR of nearly 29.24% is much higher than most traditional credit cards. If you can qualify for a lower interest rate elsewhere, closing PayPal Credit may be wise.

Limited Acceptance

While you can use PayPal almost everywhere online, PayPal Credit is only accepted at certain participating merchants and websites. Closing it removes this limitation.

Don’t Use It Frequently

If your PayPal Credit doesn’t get much use, the small benefits it provides likely aren’t worth the risk of keeping it open. Closing unused credit accounts is usually recommended.

Credit Limit Too Low

The maximum credit line for new PayPal Credit users is $20,000. If you need a higher limit to make large purchases, you may want to close your account for a different card with a higher ceiling.

Easier Account Monitoring

Eliminating your PayPal Credit removes one more revolving account you need to watch closely for fraudulent charges or overspending. Fewer open credit accounts can simplify monitoring.

Take time to consider if closing your PayPal Credit aligns with your financial goals and credit needs. For some, keeping it open for the promotional financing offers can make sense if used wisely.

Pay Off Your PayPal Credit Balance First

Before you can officially close your PayPal Credit account, you must first pay off any outstanding balance. PayPal will not allow you to close an account that still has an unpaid balance remaining.

Here are a few ways to pay off and zero out your PayPal Credit:

  • Pay from your bank – Log into your PayPal account and make a payment directly from a linked bank account. This instantly updates your balance.
  • Use PayPal balance – If you have funds available in your PayPal balance, you can use them to cover some or all of your remaining credit balance.
  • Pay by phone – Call 1-844-373-4961 to pay off your PayPal Credit by phone using a bank account or debit card.
  • Mail a payment – You can send a physical check or money order to PayPal Credit to pay off your balance as well.

Be sure to pay off any pending balances too before closing. PayPal needs to fully process returns or pending transactions before allowing account closure. Monitor your balance for a few days to ensure it reaches $0.

Contact PayPal Customer Service to Officially Close Your Account

Once your PayPal Credit balance shows $0 owed, you can call PayPal to close your account permanently:

  • Phone Number: 1-866-528-3733
  • Hours: 7am – 1am ET Mon-Fri, 9am – 11pm ET Sat-Sun

When you call, let the representative know you already paid your balance and want to voluntarily close your PayPal Credit account. Be ready to verify details like:

  • Full name
  • Address
  • Last 4 of SSN
  • Date of birth
  • Account number

This allows them to access your account and proceed with closure. They will then cancel your credit account while you are still on the phone.

Request Written Confirmation for Your Records

Before ending the call, be sure to request written confirmation that your PayPal Credit account has been closed. Ask for this documentation to be emailed or physically mailed to you.

Having proof of account closure in writing can prevent headaches if any issues arise down the road. Keep this confirmation for your records in case it’s ever needed.

Check Your Credit Report After Closing

Although PayPal will confirm closure over the phone and in writing, it’s wise to double check through other means too.

About a month after closing your account, pull a copy of your credit report from Equifax, Experian or TransUnion. Verify that the PayPal Credit account is listed as closed without any errors.

This provides further confirmation of closure and lets you monitor for any fraudulent activity after the fact. Address any problems right away.

Understand Potential Impacts to Your Credit Scores

When closing any credit card or loan account, your credit scores can be temporarily impacted in certain ways. Here are some potential results of closing your PayPal Credit to be aware of:

  • Average age of credit history – Eliminating your account may slightly shorten the average age if you don’t have other old accounts.
  • Credit utilization ratio – Removing a credit line can increase your overall utilization, which makes up 30% of your FICO score.
  • Credit mix – Having an installment loan like PayPal Credit adds diversity. Losing this account decreases your mix of credit types.

In general, the effect on your scores tends to be minor when closing PayPal Credit specifically. But monitor your credit reports over the following months for any noticeable changes.

Alternatives If You Still Need Access to Credit

If you regularly relied on your PayPal Credit for financing purchases, make sure you have another credit card or loan available after closing it.

You don’t want to suddenly find yourself without access to revolving credit right when you need it. Being approved again right away can be difficult.

Ideally, apply and get approved for another card before closing your PayPal Credit. This prevents any gap between when one account closes and the new one opens.

If you plan to stop using credit altogether, closing your PayPal Credit may be the perfect way to simplify your financial accounts.

Step-By-Step Instructions to Close Your PayPal Credit Account

Ready to close your PayPal Credit for good? Follow these steps to cancel it smoothly:

Step 1: Pay Off Your Outstanding Account Balance

First, pay off your PayPal Credit balance entirely and bring it down to $0 owed. Log into your PayPal account and pay from a linked bank account or use your PayPal funds.

You can also call the automated phone system or mail in a payment if you prefer. Just zero out your balance so the account shows paid in full.

Step 2: Contact PayPal Customer Service to Close Your Account

Next, call PayPal customer service at 1-866-528-3733 and clearly state you want to close your PayPal Credit account permanently. Verify your identity and account details when prompted.

Let the representative know you already paid your balance and want the account closed. They will then cancel it while you are on the call.

Step 3: Request Written Confirmation for Your Records

Before hanging up, be sure to request official written confirmation of account closure. Having this in writing prevents any potential issues down the road.

Step 4: Check Your Credit Report Afterwards

Finally, check your credit report about a month after closure to verify that the PayPal Credit account is closed without any errors. Address any issues immediately.

Following these steps allows you to smoothly close your PayPal Credit account for good.

What Happens After You Close Your PayPal Credit Account?

Once your account is officially closed, here are some things to expect:

  • You will no longer have access to the line of credit. Your spending limit will be removed.
  • Any automated recurring payments you had set up through PayPal Credit will be stopped.
  • Your credit utilization ratio may temporarily increase since your total available credit decreases.
  • Closed accounts remain on your credit reports for 10 years but are designated as “closed.”
  • If you paid any annual fee, you should receive a prorated refund based on the percentage of the year left.
  • You can no longer receive special promotional financing offers from PayPal Credit.
  • If you change your mind, you’ll have to reapply for a new PayPal Credit account. The old one can’t be reopened.

After closure, continue monitoring your credit report and PayPal account for any unusual activity just to be safe. Other than that, enjoy the simplicity of one less credit account to manage!

Closing Considerations for PayPal Credit

Before submitting the request to close your PayPal Credit account, here are some final considerations:

  • Do you still need access to a revolving credit line? If so, apply for another card first to ensure no gap in financing availability.
  • Will losing this credit line drastically alter your credit utilization ratio? Keeping it open may be better temporarily.
  • How old is the credit account? Closing your oldest line can negatively impact your credit history length.
  • Are there reasons other than high rates or low usage to close it? You may be able to negotiate improved terms first.

If after reviewing the pros and cons you determine closing your account makes sense, follow the steps outlined above for a smooth transition.

Conclusion

Closing your PayPal Credit account is a relatively straightforward process but does require a few important steps. First, pay off any outstanding account balance in full and ensure it reflects $0. Then call PayPal customer service at 1-866-528-3733 to officially close your account.

Request written confirmation for your records and verify account closure on your credit report about a month afterwards. Understand this may cause temporary score drops. But eliminating your PayPal Credit line can be prudent financial management if it aligns with your current needs and goals.

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