What If I Have a Negative PayPal Balance? (Full Guide)

If you’re a PayPal user and have found yourself with a negative balance, you might want to know: what happens if you have a negative PayPal balance?

If so, keep reading to learn all you need to know about PayPal and what happens to your account if its balance goes negative, along with other related facts!

What If I Have a Negative PayPal Balance in 2024?

PayPal accounts with a negative balance may be suspended by PayPal, and your ability to make transactions will be limited in 2024. PayPal doesn’t have overdraft charges, but it needs to be fixed quickly. However, you can easily fix this by adding money to your PayPal balance and making sure that money is available on your primary funding source.

Do you want to know more about PayPal negative balances, and what it means for your account? If so, read on to learn what we’ve found out! 

Does PayPal Allow Balances to Go Negative?

PayPal does allow balances to go negative, but this isn’t something you should purposefully do.

Note that PayPal doesn’t have a set limit on how much it will allow your account to go negative before rejecting the transaction.

Also, if your PayPal balance goes negative, PayPal will continue to try to charge your account on file, which is why we recommend checking your PayPal account balance regularly.

Does PayPal Charge If Your Balance Goes Negative?

PayPal doesn’t charge overdraft fees like a traditional bank, nor does it charge interest on negative balances. 

Why Do PayPal Balances Go Negative?

Your PayPal account balance will go negative if you make a purchase with PayPal and your balance is not enough to cover it.

In addition, your primary funding source will also have to reject the transaction in order for your PayPal account to go negative.

How Long Do You Have to Fix a Negative Balance on PayPal?

There’s no set time frame to correct a PayPal negative balance. However, you should correct it as soon as possible to prevent your account from being suspended.

How Do You Fix a PayPal Negative Balance?

How Do You Fix a PayPal Negative Balance?

Fixing a PayPal negative balance is easy, as all you need to do is update your bank account information on PayPal and ensure that money is available.

Otherwise, you can transfer money manually to your PayPal balance from an available funding source.

How Do You Prevent a Negative Balance on PayPal?

You can prevent your PayPal account balance from going negative by keeping your primary funding source up to date and with money available.

Will PayPal Suspend an Account for Having a Negative Balance?

PayPal will suspend an account if it has a negative balance after the company makes numerous attempts to withdraw money from your bank account.

Will PayPal Put You in Collections for a Negative Balance?

Depending on how large your negative balance, is there is a good chance that PayPal will send your account to collections if you fail to correct the balance after a period of time.

How Does PayPal Try to Collect on a Negative Balance?

PayPal will try to first collect money from the primary payment method you have on file. This will typically occur again after three days of getting a negative balance.

If PayPal is unable to collect at this time, it will continue trying to collect at least three times in total.

In the event that PayPal is unable to collect on the negative balance, the company will suspend your account and send it to a collection company.

Does PayPal Report Negative Balances to Credit Bureaus? 

PayPal doesn’t report to the credit bureaus like a credit card or loan business would. However, it will be reported if you’re sent to a collection agency.

Does PayPal Offer Overdraft Protection for Negative Balances?

PayPal doesn’t offer overdraft protection or an overdraft line of credit like many traditional banks.

However, the company does allow you to attach a backup funding source that will be charged in the event that you don’t have enough funds available in your PayPal balance.

Why Does PayPal Allow Balances to Go Negative?

PayPal allows account balances to go negative because of the way they operate.

PayPal is essentially a middleman between customers and merchants that takes money from the buyer and transfers it to the seller.

Unfortunately, sometimes PayPal is unable to deduct funds from the buyer’s bank account before they pay the merchant.

Also, in most cases, the account holder is unable to get the money back from the seller.

Because of this, PayPal has no option but to put the user’s account negative and require them to pay the money back that they owe.

To learn more, you can also read our posts on PayPal statistics, unknown PayPal charge on bank statements, and does PayPal work on weekends.


While a negative balance is something that everyone wants to avoid, sometimes it just happens. The good news is that PayPal doesn’t charge overdraft fees or have penalties.

However, you will need to get this corrected as soon as possible by depositing money and checking your primary funding source. If you fail to correct the negative balance in a timely manner, PayPal may permanently suspend your account.

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Marques Thomas

Marques Thomas graduated with a MBA in 2011. Since then, Marques has worked in the retail and consumer service industry as a manager, advisor, and marketer. Marques is also the head writer and founder of QuerySprout.com.

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