PayPal Promises Unlimited 3% Cash Back With New Credit Card Program

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PayPal is upping the ante in the cash back credit card game.

The online payment giant, which has one of the top 2% cash back credit cards on the market, is preparing to offer an unlimited 3% cash back reward on everyday purchases made with its PayPal Cashback Mastercard.

But there’s a catch. You need to use PayPal to process the transaction in order to earn that full 3% return on your spending.

Money expert Clark Howard, who is a proponent of most consumers choosing steady cash back returns over flashy rewards cards, spoke about this new offer on a recent episode of The Clark Howard Podcast.

“If you are a PayPal person, they now have a card that earns three percent,” Clark says. “But it’s complicated. I mean you’ve got to be really into the whole PayPal thing and be willing to jump through all the hoops to get 3% cash back effectively on all of your charge purchases.”

Just how complicated is it? And are the hoops Clark talks about worth jumping through for you?

I decided to dig a little deeper into what PayPal is saying about its new offering to help you decide if the card is a good fit for your wallet.

PayPal Cashback Mastercard: What You Need To Know About the New 3% Cash Back Reward

The PayPal Cashback Mastercard is not a new credit card, but it is getting an update to its rewards structure.

Already known for its unlimited 2% cash back on all purchases, PayPal is expanding the card’s cash back rewards program to include a 3% reward for purchases made with the card within the PayPal ecosystem.

As a result of this update, the card is not currently accepting new applicants. But PayPal is offering the chance to join a waiting list as it puts the finishing touches on this card overhaul.

While we wait for a chance to sign up, let’s walk through some of the information that PayPal already has made available.


How the 3% Cash Back Works

As mentioned previously, the 3% cash back reward is earned by using the credit card as your payment method while using PayPal to make a transaction.

So, for example, you could check out at your favorite online retailer using PayPal as your payment option. Then, you’d choose your PayPal Cashback Mastercard as your preferred method of payment within PayPal to complete the transaction to earn 3% back.

How 3% cash back works on PayPal
PayPal illustration

The beauty of this is that the type of purchase you’re making doesn’t matter. You could be buying doughnuts, a weedeater or a new sweater. Doesn’t matter. You’ll earn 3% back with the card if you use PayPal as your payment method.

However, the downside is that you’re pretty much out of luck if the retailer doesn’t accept PayPal as a payment option. All other purchases made with the card earn 2% cash back, though, which is still a very good rate for everyday purchases.

So if you can pay with a Mastercard, you can earn at least 2% back with this card.

Which Retailers Accept PayPal as Payment?

Getting your 3% back from this card will not just be a matter of your effort: It will also require that the merchant from which you’re making your purchases accepts PayPal as a form of payment.

Doing this online seems like the easy part.

While this is not an exhaustive list, here are some popular businesses from the millions that accept PayPal as a payment option on their website:

Earning your 3% in person may be a bit more difficult. But some very popular retailers, such as Dollar General, are now accepting PayPal as an in-store payment option.

You’ll use either a PayPal QR code or your PayPal app to pay for the purchase at the register (much like you’d use a digital wallet such as Apple Pay) to get your 3% in those scenarios.


Remember, you can still get 2% back on all purchases by using the credit card for any purchase anywhere Mastercard is accepted.

The Cash Back Rewards Are Earned Daily

Now here’s something Clark would certainly love as a reward for doing everything this card requires to earn the 3%.

Since you need a PayPal account to sign up for this card, retrieving your actual cash reward with this card is a breeze.

PayPal says your cash back is “earned daily on completed purchases posted to your account.” That means you can quickly redeem it to your PayPal balance and spend it however you want almost instantaneously. And, as you may already know, PayPal cash balances can be moved to a linked bank account in short order if you’d rather save your cash back reward.

There’s no waiting for a check in the mail, clearing a required minimum cash back hurdle or converting points for statement credits as you’ll find with many competing cash back credit cards.

Existing Cardholders Are Covered

If you already have this card, there’s nothing you need to do to get the new rewards program.

PayPal says: “If you are an existing 2% Cashback Mastercard holder you will automatically receive this exciting new upgrade.”

In the meantime, you can continue earning 2% back on all purchases with the card.

Final Thoughts

The Paypal Cashback Mastercard is on Team Clark’s lists for best 2% cash back cards, so we already liked what this card had to offer.

Adding this 3% earning opportunity to the mix without requiring categorical spending really has our full attention.


PayPal is already widely accepted as a payment option on the internet, and it seems as though the company is making an effort to grow its in-store retail presence as well.

I don’t have this card yet, but I have signed up for PayPal’s waitlist to be notified when the modified version becomes available. And if it looks good, I am strongly considering adding it to my wallet as an everyday spender.

Are you considering adding this card to your wallet? We’d love to hear about it in the Community!

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