PayPal Launches Credit Card with Interest-Free Travel Financing

PayPal has launched a new physical credit card tied to its digital PayPal Credit line, designed to help consumers manage larger purchases by spreading payments over several months. This card targets purchases of $149 or more and includes a special, limited-time offer for travel expenses booked by January 31, 2026.

The standout feature is the ability to finance travel-related purchases such as hotels, airfare, train tickets, and rental cars over six months without accruing interest. This can be a game-changer for travelers looking to budget their summer trips without immediate financial strain.

However, the card does come with a significant caveat: if the balance is not fully paid off within the promotional period, retroactive interest will be charged from the original purchase date. This interest can be steep, often around 20% APR or higher, making it crucial for users to manage payments carefully.

Unlike traditional travel rewards credit cards, the PayPal Credit Card does not offer perks such as welcome bonuses, travel protections, or annual credits. Instead, it focuses on financing flexibility without an annual fee, and it includes purchase protection to help resolve disputes.

Existing PayPal Credit users may have their accounts upgraded automatically, while new applicants can qualify for either the digital PayPal Credit line or the physical card, depending on creditworthiness. The card is accepted anywhere Mastercard is, providing broad usability.

Comparing PayPal Credit Card and PayPal Cashback Mastercard

The PayPal Credit Card serves primarily as a financing tool rather than a rewards card. It offers no cash back or travel benefits but allows interest-free payments if balances are cleared timely. In contrast, the PayPal Cashback Mastercard provides cash back rewards—3% when paying via PayPal and 1.5% otherwise—but lacks financing options.

This distinction means consumers must choose based on their priorities: flexible financing without rewards or earning cash back without special financing terms.

What to Watch Out For

The biggest risk with the PayPal Credit Card is the retroactive interest if the balance is not paid off within the promotional period. This can lead to unexpectedly high charges, negating the benefits of interest-free financing. Users should treat the card like a short-term loan and ensure timely payments to avoid costly interest.

In comparison, many Buy Now, Pay Later services or traditional rewards cards do not impose retroactive interest, making them potentially safer for consumers who might miss payments.

Overall, the PayPal Credit Card offers a practical financing option for travelers and shoppers who can commit to paying off their balances quickly, but it lacks the perks of typical travel credit cards and carries risks if payments are delayed.