The rules of PayPal's Bill Me Later service, renamed "PayPal Credit" in 2015, do not involve the use of credit cards, as the service is an extension of credit for online purchases only. The terms and conditions clarify that the phrase "credit card purchases" refers to use of online credit.
PayPal Credit rules stipulate that once holders of PayPal accounts receive credit approval, they can use PayPal Credit to open an online credit line with Comenity Capital Bank for at least $250 as of 2015. Although Comenity Capital Bank does not issue physical credit cards to account holders, they can use their PayPal credit line at checkout when they purchase online goods and services. Additionally, PayPal Credit holders can use the service to send money through their PayPal accounts. They get monthly statements and can pay their PayPal Credit bills partially or in full through their PayPal accounts or their bank accounts.
PayPal Credit charges no annual fee and no interest as long as customers pay their balances by the due date. Late fees and interest apply for late payments. If customers link their PayPal and PayPal credit accounts, they can manage their credit via their PayPal accounts as well as receive bonuses, discounts, free shipping and promotional offers for online shopping.