Content provided by Bankrate.com. New York Post and its content partners earn compensation from the affiliate companies that appear below. This content does not include all available financial offers, and compensation may impact how and where links appear in the content.
Terms apply to American Express benefits and offers. Enrollment may be required for select American Express benefits and offers. Visit americanexpress.com for more.
If you shop regularly with PayPal, or use it to manage your finances, you may want to consider the PayPal Cashback Mastercard.
With its promise of unlimited 2% cash back on every purchase, it’s definitely an eye-catcher. You can even take it one step further and earn unlimited 3% cash back on PayPal purchases.
But is it truly worth adding to your wallet? Here’s what you need to know about the PayPal card.
Key takeaway: The PayPal Cashback Mastercard is a good choice for frequent PayPal users who want a simple cash back card with no annual fee. But, it may not be the best option for those who don’t use PayPal or regularly carry a balance.
| Pros | Cons |
|---|---|
|
|
How the PayPal Cashback Mastercard works
The PayPal Cashback Mastercard allows you to earn cash back in a seamless, simple way. It’s meant for those who frequently use PayPal for online transactions. You’ll need to have a PayPal account in good standing to apply.
This card offers flat-rate cash back, making earning rewards on all purchases easy. Most cards have a base rate of 1% on your spending. But with the PayPal Cashback card, you’ll earn at least 2%, no matter where you shop or what you buy.
Another key benefit of this card is that there’s no annual fee. You won’t have to worry about whether you’re spending enough to justify keeping the card each year. If you like the idea of integrating your finances into one app, PayPal’s slick interface may be appealing to you.
Here’s a closer look at how the PayPal rewards program works.
Earning rewards
Other cash back cards may offer boosted rates for specific categories or limit how much you can earn at the higher rate. Not the PayPal Cashback card. With this card, you’ll earn:
- 2% unlimited cash back on all purchases
- 3% unlimited cash back on purchases made through your PayPal account
There are no rotating categories, spending caps, or hoops to jump through. Cash back can add up quickly, especially if you’re a frequent spender. For example, if you spend $2,000 monthly on this card, you could earn at least $480 in cash back each year.
The cash back you earn is added to your PayPal balance, which you can use for future purchases or transfer to your linked bank account.
PayPal has a list of popular brands that accept PayPal as a payment method, though it’s not a comprehensive list. Partners include eBay, Apple, Nike, Walmart, and The Home Depot.
You also qualify for the 3% cash back rate whenever you send money to other PayPal users. But remember that sending money using a credit card (even PayPal’s) incurs a 2.9% transaction fee plus $0.30. In this case, the cash back you earned from using PayPal to send money can offset this cost.
Redeeming rewards
The PayPal card’s rewards program has two enticing bonus points. The first is that rewards accumulate daily, so you don’t need to wait until the end of your statement period to see how much you earned.
Secondly, there’s no minimum needed to redeem. All you need to do is select your cash back balance and pick a redemption method. You can redeem cash back as a statement credit, direct deposit, or use it on PayPal purchases.
Other benefits
The cash back rewards, lack of an annual fee, and perks offered by PayPal’s broader ecosystem are huge draws. But this card also has a few additional — yet limited — based Mastercard perks.
This includes identity theft protection and zero liability protection, which covers you against unauthorized purchases made with your card. This card does lack some perks that come with other cash back cards, like cell phone protection.
Drawbacks and limitations
Of course, no credit card is perfect, and the PayPal Cashback Mastercard has some drawbacks.
This card has no welcome bonus or ability to earn travel rewards, limiting some of its benefits. Plus, other cash back credit cards may offer better rewards and perks if you’re not a regular PayPal user.
While there’s no annual fee, which is a big plus, the card does come with a variable APR of 19.99%-31.99% based on your creditworthiness. If you’re late on your payment, you could face fees up to $40. You could pay some hefty interest charges and fees if you tend to carry a balance.
This card also charges a 3% foreign transaction fee, which is unappealing if you travel frequently and plan on using the card abroad.
The takeaway? This card is best for folks who plan to pay their balance in full each month. If you’re prone to carrying debt, you might want to look for a card with a lower interest rate.
Who is the PayPal Cashback card right for?
If you’re already a frequent PayPal user, this card could be a natural fit. You can redeem cash back rewards through your PayPal account and use them for online purchases or transfer them to your bank.
Or, if you don’t want to bother tracking bonus categories or activating quarterly rewards, this card keeps it simple with a flat 2% back on everything. No need to strategize or optimize your spending — just swipe and earn.
On the other hand, this card may not be the best fit for bonus category spenders. If your spending falls into common bonus categories like groceries, dining, or travel, you might earn more rewards with a card offering higher cash back rates.
Plus, since the PayPal Cashback Mastercard doesn’t offer a signup bonus, big spenders might get more value from a card with a generous bonus after meeting a spending threshold.
Alternatives to the PayPal Cashback card
If you’re not sold on the PayPal Cashback Mastercard, other cash back cards are worth considering.
Venmo Credit Card
The Venmo Credit Card is a great option for those who frequently use the Venmo app for transactions.
This card offers 3% cash back on your top spend category, 2% on your second top category, and 1% on all other purchases. Cash back is automatically added to your Venmo balance, which you can use for purchases, send to friends, or transfer to your linked bank account.
Robinhood Cash Card
The Robinhood Cash Card is a unique card that combines cash back rewards with the potential for stock investing. With this card, you’ll earn 2% cash back at gas stations and grocery stores (when you set up direct deposit) and rotating cash back at select retailers.
Plus, you can opt-in to roundups, which round your purchases up to the nearest dollar and invest the spare change in your Robinhood account. The Robinhood Cash Card has no annual fee and offers a unique way to invest while you spend.
Blue Cash Everyday Card® from American Express
If you’re looking for a cash back card with bonus categories, the Blue Cash Everyday Card® from American Express might be a good fit. This card offers 3% cash back at U.S. supermarkets, U.S. gas stations, and U.S. online retail purchases (up to $6,000 per year in each category, then 1%). You’ll also earn 1% cash back on all other purchases.
The card also offers a welcome bonus of $200 back after you spend $2,000 in purchases within the first 6 months and has no annual fee. See rates and fees.
The Chase Freedom Unlimited® is another solid cash back card with bonus categories. You’ll earn 5% cash back on travel purchased through Chase Ultimate Rewards, 3% on dining and drugstore purchases, and 1.5% on all other purchases.
The card also offers a welcome bonus — an extra 1.5% cash back on everything you buy (up to $20,000 in the first year).
The bottom line
The PayPal Cashback Mastercard is a solid choice for those who want a straightforward way to earn cash back on their everyday purchases. With 2% cash back on everything (plus 3% back when purchasing with PayPal) and no annual fee, it’s a card that can put some serious money back in your pocket over time.
But it’s important to consider your spending habits and priorities before applying. Take some time to compare your options and find the cash back card that best aligns with your goals and lifestyle
*Disclaimer: Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by Amex Assurance Company.
Opinions expressed are author’s alone, not those of any bank, credit card issuer, or other entity. This content has not been reviewed, approved, or otherwise endorsed by any of the entities included in the post.
