If you have store credit, it will be automatically applied if you're using a credit card. Store credit can be applied using PayPal too. Unfortunately, due to PayPal systems, store credit cannot be applied when using the Checkout with PayPal function. Instead, click the red "proceed to checkout" button in the shopping basket. Then, select PayPal in the Payment Info step at checkout. You can always see your credit balance by visiting the Store Credit page.