| Cash Back Rating: | 3.4 / 5 |
| Rewards Value: | 3.4 |
| Annual Percentage Rate: | 0.0 |
| Rewards Flexibility: | 3.8 |
| Features: | 1.8 |
In a Nutshell:
Though the PayPal Cash Back Mastercard offers good rewards rate, cardholders who are not regular PayPal users may find the redemption options too cumbersome.
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Average Yearly Rewards Value ($1,325 monthly spend) |  |
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Pros
Cons
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Other Notable Features: Extended warranty, price protection, identity theft protection
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PayPal has thrown a serious contender into the credit card race with its new cash back card. If you are a frequent user of PayPal, you may be familiar with PayPal’s previous Mastercard — PayPal Extras — an uninspired points-based card that offered a very poor return on its rewards points. With the new PayPal Cash Back Mastercard, PayPal has stepped up its game by offering some serious rewards: 2 percent cash back on every purchase, with no minimum amount required to redeem.
There are a handful of other cash back cards on the market — including the Citi Double Cash® Card — that offer a 2 percent cash back rate (1 percent when you buy and 1 percent as you make payments for those purchases), and the PayPal card, with no minimum redemption amount, aims to give them a run for their money.
On the downside, the card requires you to have a PayPal account to redeem your rewards, which could cause some serious reservations if you are not a fan of PayPal services.
Unlimited 2 percent cash back
The PayPal Cash Back Mastercard is a bona fide 2 percent cash back card, offering unlimited cash back on all your purchases.
Every 2 percent cash back card comes with some stipulations — the Citi Double Cash card, for instance, requires you to pay your bill on time to earn the full 2 percent rewards rate. The PayPal Cash Back card is no exception: In return for earning such a high amount of cash back, you need to be an active PayPal user to redeem your rewards.
No sign-up bonus
The PayPal card doesn’t include a sign-up bonus, but that is typical of cards that offer 2 percent cash back. However, in the long run a card with a higher rewards rate is preferable to a card with a large sign-up bonus. As long as you plan to use the PayPal card for at least a couple of years, you stand to earn more than with a card that comes with a lower cash back rate and a large sign-up bonus.
No minimum to redeem
One of the major advantages to the PayPal card is that you aren’t required to accumulate a minimum amount of cash back to redeem your rewards.
The PayPal card allows you to redeem any amount once it is posted to your account, as long you have a statement balance. This is a major plus if you use the PayPal card infrequently, or plan to use it in conjunction with other cash back cards.
Requires a PayPal account
The PayPal card, unfortunately, requires you to transfer your rewards as credits to your PayPal statement, which means that cardholders who are not active users of PayPal will have to put in some extra effort to receive their cash back. On the upside, there is no minimum amount required to redeem your rewards, which makes things especially easy for a regular PayPal user — you can easily surf over to the rewards summary page at the end of each billing cycle and transfer cash back to your PayPal statement as a part of your usual account maintenance. However, cardholders who don’t wish to buy or sell merchandise on PayPal will have to incorporate a couple extra steps into their routines: logging in to PayPal to transfer the rewards to a PayPal account and then — once the rewards are transferred — transferring that balance to an outside account.
If you are reluctant to log in to a service you don’t regularly use, there are a large number of cash back cards that allow you to apply cash back directly to your credit card statement (some even allow you to do so automatically). The Citi Double Cash card, for example, doesn’t require you to have a Citi Bank account. With the Citi card, you have multiple options: You can redeem your cash back as statement credits, as a deposit into a Citi bank account or as a check.
Also, there are cash back cards, such as the Chase Freedom Flex®, which give you far more versatility and value by allowing you to transfer your rewards to other cards and use them for a variety of rewards, including cash back, merchandise and travel. If you like to travel and are willing to put in some legwork to find the best redemption values, you can earn even better than a 2 percent rewards rate with these more versatile cards.
Issued by Synchrony Bank
The card is issued by Synchrony bank, which may be a plus if you are searching for a cash back card outside one of the typical issuers, or you are hoping to get in on a high-earning rewards card with a less-than-excellent credit score. Be warned, though, that you aren’t guaranteed to get the 2 percent cash back card if you apply. If Synchrony finds your credit history lacking, the issuer could stick you with the plain-Jane Platinum Mastercard instead.
See related: Synchrony Bank credit cards
High APR for some cardholders
The PayPal Mastercard offers a very large range of APRs — cardholders with excellent credit could get a fairly reasonable APR of 19.99 percent, but for cardholders with lower credit score, the APR could be as high as 26.99 percent, which is extremely high.
Bottom line: You should make an honest appraisal of your online spending habits before you apply for the card. If you have a habit of charging more than you can afford, the PayPal card could easily sink you into debt with a high APR, since it is designed to encourage spending on PayPal.
Minimal perks
The PayPal card unfortunately comes with limited perks compared to its competitors. The card offers some purchase benefits, including purchase protection and extended warranty, but not much else.
Why get the PayPal Cash Back Mastercard?
- You are an avid PayPal shopper.
- You want a simple cash back card with a very high rewards rate.
- You want to be able to redeem your cash rewards without a minimum threshold.
How to use the PayPal Cash Back Mastercard:
- Link the card to your PayPal account to start earning rewards.
- Be sure to log in to your card account on a regular basis to redeem your rewards.
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