What Are The PayPal Negative Balance Consequences?

PayPal is one of the most popular online payment platforms, but what happens if the balance in your account goes negative? Do you get charged a fee? What other consequences are there?

Understanding how to properly manage your PayPal account is essential to ensure that everything runs smoothly and that you don’t incur unexpected penalties.

Let’s take a look at the negative balance consequences of having an overdrawn PayPal account.

Can PayPal Have a Negative Balance?

Yes, a PayPal account can have a negative balance. When you have a negative PayPal balance, it means that you owe PayPal money.

This can happen for a few reasons:

  • You may have sent someone money and they didn’t send it back to you.
  • You may have bought something online but didn’t receive the item or received a defective item.
  • You may have had unauthorized transactions on your account.

Consequences of Having a Negative Balance in PayPal

If your PayPal account has a negative balance, it means that you owe money and have not paid it back.

In this case, PayPal will collect the amount owed from any funds sent to your account or from any future payments sent to your account.

In some cases, if you do not pay back the money owed for an extended period of time, PayPal may also open up collections proceedings against you.

In addition to being subject to collection proceedings, having a negative balance can also result in other fees. For example, depending on where you live and how much money is owed, PayPal may charge an overdraft fee or late fee.

These fees vary based on country and payment method and should be taken into consideration when managing your finances through PayPal.

Finally, it’s important to note that having an overdrawn balance can also affect your ability to use certain services offered by PayPal.

If you owe more than the maximum allowed amount for your region or jurisdiction, then you may be prohibited from using certain services such as withdrawing funds from your account or sending payments overseas until the debt has been repaid in full.

This could significantly hinder business operations if not managed properly.

How Long to Pay PayPal Negative Balance?

If you have a negative balance on your PayPal account, it’s important to pay it off as soon as possible. If you don’t, you may face some penalties from PayPal.

Your negative balance will be automatically added to the current balance on your account. You’ll then have 120 days to pay it off. If you don’t, the account may be locked.

FAQs on PayPal Negative Balance Consequences

Can a negative PayPal balance affect your credit score?

Yes, a negative PayPal balance can affect your credit score. Late payments and collections can have a negative impact on your credit score, and PayPal is classified as a late payment.

So, if you have a negative PayPal balance and it’s reported to the credit bureaus, it could lower your credit score.

To avoid this, make sure you pay your PayPal balance on time every month. You can also try to negotiate a payment plan with the creditor if you’re having trouble making payments.

And lastly, keep an eye on your credit score so you can identify any drops early and take corrective action.

What happens if you don’t pay a negative PayPal balance?

If you have a negative PayPal balance and don’t pay it, the account may be closed and your credit score may be affected.

If you don’t pay your negative PayPal balance, PayPal will take steps to collect the money that you owe. This may include closing your account and reporting the debt to credit bureaus.


When it comes to managing finances with PayPal, it’s important to understand what happens when your balance goes negative.

Having a negative balance can result in collection proceedings against you as well as additional fees such as overdraft fees or late fees for non-payment of debt.

It can also limit access to certain services offered by PayPal until all debts have been paid in full.

To avoid any potential problems down the line, make sure that you stay on top of finances by regularly monitoring activity in your account and making sure that all payments are made on time and in full.

READ MORE: Can you transfer money from PayPal to Venmo?

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