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The PayPal Cashback Mastercard® is a straightforward cash-back credit card that delivers solid value without any frills.
As you spend on the card, you'll earn 3% cash back on PayPal purchases and 2% on all other purchases. The cash back you earn goes directly into your PayPal account.
Below, CNBC Select breaks down the rewards, benefits and fees associated with the PayPal Cashback Mastercard to help you decide if it's right for your needs.
PayPal Cashback Mastercard®
Rewards
Earn 3% cash back* on PayPal purchases and 2% on all other purchases
Welcome bonus
None
Annual fee
$0
Intro APR
None
Regular APR
20.24%– 32.24% Variable, rates as of 9/1/2023
Balance transfer fee
None
Foreign transaction fee
3%
Credit needed
Excellent/Good
*Terms apply.
Pros
- 3% cash back* on PayPal purchases and competitive 2 % on all other purchases
- Rewards can be redeemed at any amount, without the typical $25 minimum
- Easily integrates with your PayPal account
- No fee on purchases made outside the U.S.
Cons
- Cash-back redemptions are limited to deposits to your PayPal account, your linked bank account or debit card
- No introductory 0% APR for purchases or balance transfers
- No welcome bonus, so you can’t maximize rewards during the first few months of card opening
PayPal Cashback Credit Card Review
Benefits and perks
The PayPal credit card is concise in its offering, making it a great fit for consumers looking for a simple way to save money on their purchases.
However, there are a few features to the card worth noting, including:
- 3% cash back on PayPal purchases and 2% on all other purchases, and the rewards never expire
- Instant access to credit line for PayPal purchases
- 15% discount on airport meet & greet services through Mastercard Airport Concierge
- Free identity monitoring
The only caveat to this card is that you must have a PayPal account open and in good standing before applying for the card. It's free to open and takes about two minutes. You can open an account here, just be sure to select the 'personal' account.
Additionally, this card doesn't have a welcome offer like many other cash back credit cards.
How to earn and redeem cash back
Earning cash back on spending
Select calculated how much cash back the average American can earn in a year when using their PayPal Cashback Mastercard. We worked with the location intelligence firm Esri, who provided us with a sample annual spending budget of $22,126.
The budget includes six main categories: groceries ($5,174), gas ($2,218), dining out ($3,675), travel ($2,244), utilities ($4,862) and general purchases ($3,953).
With all spending considered, this would give a cardholder at least $442 in cash back in the first year. Over a five year period, cardholders could potentially earn a minimum of $2,212 — although the total amount will depend on an individual's annual spending habits and on whether PayPal is used for any purchases.
Redeeming cash back
You can redeem the earned cash back in two ways:
- Direct deposit to your checking account
- Redeem the cash back for PayPal purchases
Many online merchants accept PayPal as a payment method, and you can use the cash back you've accrued on the card for your purchase.
Rates and fees
The card has no annual fee. It has a 3% foreign transaction fee on all international purchases.
Late payment fees can be up to $41.
Card comparison
While the PayPal Cashback Mastercard is a solid pick as a cash back credit card, there are other cards that are potentially more lucrative to consider to help you save on your purchases.
PayPal credit card vs. Citi Double Cash® Card
The Citi Double Cash® Card is another great cash-back credit card as it offers 2% cash back on all purchases: 1% on all eligible purchases and an additional 1% after you pay your credit card bill.
The card also offer a valuable intro 0% APR for the first 18 months on balance transfers (19.24% - 29.24% variable thereafter; balance transfers must be completed within 4 months of account opening and there's an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. After that, your fee will be 5% of each transfer (minimum $5), which is a great way to save on interest charges on revolving credit card debt.
So if you're debating between the two cards, the cash-back potential is identical, except that the PayPal card earns 3% on PayPal purchases. If you also have a Citi card that also earns transferrable ThankYou points, like The Citi Premier® Card, you can transfer your cash back from your Citi Double Cash® Card into ThankYou points. These points can then be transferred to airline partners, where you'll often get much more value from your points when redeeming this way.
If you need to consolidate existing credit card debt, the Citi Double Cash card is also a better choice.
Citi Double Cash® Card
Rewards
Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases. To earn cash back, pay at least the minimum due on time. Plus, for a limited time, earn 5% total cash back on hotel, car rentals and attractions booked on the Citi Travel℠ portal through 12/31/24
Welcome bonus
Earn $200 cash back after you spend $1,500 on purchases in the first 6 months of account opening. This bonus offer will be fulfilled as 20,000 ThankYou® Points, which can be redeemed for $200 cash back.
Annual fee
$0
Intro APR
0% for the first 18 months on balance transfers; N/A for purchases
Regular APR
19.24% - 29.24% variable
Balance transfer fee
For balance transfers completed within 4 months of account opening, an intro balance transfer fee of 3% of each transfer ($5 minimum) applies; after that, a balance transfer fee of 5% of each transfer ($5 minimum) applies
Foreign transaction fee
3%
Credit needed
Fair/Good/Excellent
See rates and fees. Terms apply.
Read our Citi Double Cash® Card review.
PayPal credit card vs. Blue Cash Preferred® Card from American Express
The Blue Cash Preferred® Card from American Express is a solid pick for a cash back card for your wallet.
When you spend on the card, you will earn:
- 6% cash back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%)
- 6% cash back on select U.S. streaming subscriptions
- 3% cash back at U.S. gas stations, 3% cash back on transit including taxis/rideshare, parking, tolls, trains, buses and more
- 1% cash back on other purchases
And the card comes with a valuable welcome offer where you can earn a $250 statement credit after you spend $3,000 in purchases on your new card within the first six months.
The card comes with perks too like an up to $120 annual credit when you pay for an auto-renewing subscription to Equinox+, *rental car insurance and return protection. Eligibility and Benefit level varies by Card. Terms, Conditions and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details.
Lastly, the card has a $0 intro annual fee for the first year, then $95. (See rates and fees).
So if you're deciding between the two cards, it comes down to a simple math equation and your own preference. The $250 welcome bonus and the higher cash-back categories will likely make the Blue Cash Preferred the better card in year one. However, after the first year, depending on your spending and preferences, the two cards' rewards may be closer. So if you plan on holding either one of these cards long term, be sure to weigh which one will earn you more cash back based on your spending habits.
Blue Cash Preferred® Card from American Express
Rewards
6% cash back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%), 6% cash back on select U.S. streaming subscriptions, 3% cash back at U.S. gas stations, 3% cash back on transit (including taxis/rideshare, parking, tolls, trains, buses and more) and 1% cash back on other purchases. Cash Back is received in the form of Reward Dollars that can be redeemed as a statement credit or at Amazon.com checkout.
Welcome bonus
Earn a $250 statement credit after you spend $3,000 in purchases on your new card within the first 6 months.
Annual fee
$0 intro annual fee for the first year, then $95.
Intro APR
0% for 12 months on purchases from the date of account opening
Regular APR
19.24% - 29.99% variable. Variable APRs will not exceed 29.99%.
Balance transfer fee
Either $5 or 3% of the amount of each transfer, whichever is greater.
Foreign transaction fee
2.7%
Credit needed
Excellent/Good
See rates and fees, terms apply.
Who the PayPal Credit Card is best for
The PayPal Cashback Mastercard® is a great fit for someone who doesn't want to pay an annual fee and for those who want a no-frills cash-back credit card that connects to their PayPal account. It also should be appealing to those who don't want to keep track of bonus spending categories all the while still earning a respectable amount of cash back on all purchases.
The cash back earned can go straight into your PayPal account, which can than be either deposited into your bank account or used for future purchases using PayPal. If you're a frequent PayPal user, it could be convenient to have the rewards deposited straight into your PayPal account.
Bottom line
The PayPal Cashback Mastercard is a solid cash-back credit card for consumers looking for simplicity and a way to save on their purchases. However, it's light in other benefits and features.
But before you open a new credit card to save on your purchases, it's best to ensure you have a solid budget in place to manage your monthly spending and to make sure you're in a financially stable place.
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For rates and fees of the Blue Cash Preferred® Card, click here.
*Car Rental Loss or Damage Coverage is offered through American Express Travel Related Services Company, Inc.
