How Does "Bill Me Later" Work?

by Luke Arthur ; Updated July 27, 2017

When shopping online, many people pay with a credit card or with a third-party processor like PayPal. Another option available with some merchants is called "Bill Me Later," and it is similar to a credit card. With Bill Me Later, you do not have to deal with opening a new account.

Bill Me Later

Bill Me Later is a company associated with PayPal. It is a payment method available at more than 1,000 online merchants. When you want to use Bill Me Later, you simply select this option when you check out online. At that point, you must enter in the last four digits of your Social Security number and your birth date. Once you do this, you can charge the purchase on Bill Me Later and then you pay your bill at a later date.


Bill Me Later is a type of credit account, even though you do not set it up like you traditionally would a credit card. With the Bill Me Later system, your credit approval is given instantaneously when you make a purchase. The lender looks at your credit profile and then determines how big of a credit line you can have. If you have used Bill Me Later several times, you may not have enough credit to make additional purchases.


When you select Bill Me Later at checkout, the Bill Me Later company pays the merchant for your purchase. At that point, you receive a statement in the mail from Bill Me Later about 10 to 15 days after your purchase. The statement provides you with information about how much you spent, what your interest rate is and when your payment is due. The interest rate on the account is similar to credit card interest at around 19.99 percent.


Bill Me Later is convenient for online shoppers who do not have a credit card or need more credit to make a purchase. This service also is valuable because it offers no fraud liability for its customers. No one else can make unauthorized purchases on your account. If unauthorized activity appears on your account, you will not be held responsible for the charges. Before using this service, though, you need to determine if the high interest charges are worth the convenience.

About the Author

Luke Arthur has been writing professionally since 2004 on a number of different subjects. In addition to writing informative articles, he published a book, "Modern Day Parables," in 2008. Arthur holds a Bachelor of Science in business from Missouri State University.