I applied for the Paypal Mastercard a few days ago, but was approved for the PayPal Smart Connect line of credit instead. As some of you know my credit is not that great, but I’ve been able to gradually bring my scores up. I’ve been approved for an Ally Auto Loan and now this line of credit since I started rebuilding with two secured cards (CapOne and BOA), about a year and a half ago.

Why I chose Paypal? I’ve been active as an occasional eBay buyer and seller for the past ten years and I use PayPal every month to pay for different services (from domain name renewals and online memberships to sometimes accepting payments associated with my occupation). I thought either the Paypal Mastercard or PayPal Smart Connect would be a great option for me to continue rebuilding. It would also help my credit mix as I currently do not have any retail cards and I didn’t want to get just any retail card for the sake of having one.

For those of you who haven’t heard about it before, PayPal Smart Connect is an online credit line offered through GE Capital Retail Bank (GECRB). It’s not an actual credit card, but a line of credit that’s linked to your PayPal account. It has no annual fee and can be used anywhere PayPal is accepted. If you have a Paypal debit card, you can link this line of credit as your backup fund and pretty much use your debit card as a credit card. Aditionally, your PayPal debit card will earn you a 1% cash back from every purchase (not a lot but at least something).

PayPal Smart Connect has a pretty high APR (26.99%), but as I said before, I will use it to keep rebuilding and will pay in full every month, so I don’t really care about its APR. Also, I’ve read comments from other people with PayPal Smart Connect saying you can request credit line increases every four statements. This is an automated request done through the phone with no hard pull, so I’m looking forward to that. I appreciate when banks let you grow and reward you for being responsible.

Now for the details:

Application Date: Late May, 2012
Account Type: Retail Card/Credit Card
Credit Report Pulled: TransUnion
My Score when Approved: 656 (Experian)
Line of Credit Approved: $500
Current Line of Credit: $1300 ($300 automatic increase after two statements, then was approved for a $500 increase 4 months later)

2012 Timeline

• June: Applied for PayPal’s Mastercard.Approved for PayPal Smart Connect instead. $500 CL.
• August: Received $300 automatic increase after using it a lot during first 2 statements. New credit limit: $800.
• December: Requested a credit line increase through their automated phone service. Received a $500 increase for a new credit limit of $1300.

PROS: Got an automatic credit line increase after only two statements, then 4 months later I was approved for another one. GE is known to be generous about giving credit line increases and apparently you can request one every 4 months. This is all done through their customer service number. It’s automated, painless and they only do a soft pull.
CONS: No physical credit card given, but line of credit can be linked to your PayPal debit card which can then be used as a regular credit card.

OVERALL REVIEW: I was only approved for a $500 credit line, but this is my first unsecured credit approval in years. I’ve had this line of credit for about seven months and I’m happy to report I was given an automatic increase after the first two months. I was later approved for a $500 increase through their automated customer service number. I’ve been using this credit line a lot for eBay purchases and other PayPal payments.

I will update this review again when or if I have something new to add. Please feel free to ask questions, add comments or share your experience with this line of credit.