PayPal Cashback Mastercard Review 2022: Top Option for Online Shopping

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If you’re in the market for a cash back credit card, online payment giant PayPal has a contender worth considering in 2022.

The PayPal Cashback Mastercard has long offered a competitive unlimited 2% cash back rewards on everyday purchases. This number matches the 2% (1% as you spend, 1% as you pay) offered by the Citi® Double Cash Card – 18 month BT offer, which is one of money expert Clark Howard’s favorite credit cards.

But a card overhaul in May 2022 now offers up to 3% back on purchases made with the card through PayPal. That has our attention!

Team Clark explored the viability of the PayPal Cashback Mastercard in this review by digging into the fine print, exploring the cash back rewards program and completing a head-to-head comparison with the Citi Double Cash card.


Table of Contents

Team Clark has spent some time reviewing the cash back rewards credit card market. The PayPal Cashback Mastercard is one of the options we evaluated. We determined that the 2% unlimited cash back offering is attractive enough to warrant consideration alongside the Citi Double Cash, which we have ranked as the top “everyday cash back card” based on its unlimited 2% cash back rewards.

As you’re making your decision on whether the PayPal cash back credit card is a fit for you, please use Team Clark’s review of the card in conjunction with money expert Clark Howard’s 7 Rules for Using Credit Cards.


What Is the PayPal Cashback Mastercard?

PayPal Cashback Mastercard card art 2022

The PayPal Cashback Mastercard is a cash back credit card that touts an unlimited 2% cash back rewards program with the ability to earn up to 3%. While it carries the branding of the online payment services provider, the servicing of the credit card is actually done by Synchrony.

You must have a PayPal account to use this card. Cash back rewards will be linked to that account and can be utilized as either an addition to your PayPal balance or a credit to your linked bank account.

Money expert Clark Howard says the updated rewards from this card are a part of an effort from PayPal to get consumers to see their service in the same light as a Mastercard or Visa when it comes to online payment processing. You can view his full comments on the card’s new approach in the video below.


PayPal Cashback Mastercard: Card Specs and Perks

Before we get too far into whether or not this card might be the right choice for you, let’s take a look at some of the perks and drawbacks of the card from the fine print:

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Cardholder Benefits

  • Cash Back Rewards: The selling point for this card is this cash back rewards program. An unlimited 3% back on purchases made with PayPal either in person or online, plus an unlimited 2% on all other qualified purchases, is very strong. I checked the fine print for what type of transaction would be prohibited from earning the cash back and there were no surprises. As long as it’s a purchase of a good or service, you should get at least 2% cash back.
  • No Annual Fee: Some of the major cards in the rewards category require an annual fee. If you’re not a high-volume spender, taking the lower cash back rewards rate from a card like this and skipping the annual fee is probably the move that creates the most profit.
  • Welcome Bonus: At the time of this writing, PayPal had introduced an easy-to-achieve welcome bonus of $100 if you spend at least $500 within 90 days of opening your account. This offer had an expiration date of June 30, 2022 and it is unclear if PayPal intends to continue offering a welcome bonus after that date.
  • Easy Reward Redemption: One of the top perks of this card is that there are no spending minimums required to claim your cash back balance. Since you are required to have a PayPal account attached to this PayPal-branded credit card, the cash back balance is simply transferred to your PayPal account balance.
  • Zero Fraud Liability: PayPal says cardholders “automatically receive zero liability for any unauthorized charges” through Mastercard.

Cardholder Fees

There is no annual fee for being a PayPal cash back cardholder, but you may still incur some fees along the way.

Here’s a quick look at some of the fees you may encounter:

  • Late Fee: Up to $40
  • Cash Advance Fee: Either $10.00 or 5% of the amount of each cash advance, whichever is greater.
  • Foreign Transaction Fee: 3% of the total transaction
  • Returned Payment Fee: $29
  • Balance Transfer Fees: This card does not offer a balance transfer fee or APR within its offer details

How the PayPal Cash Back Program Works

Earning: Spending Rules For 2% vs. 3% Cash Back

Unlike some cash back cards, there are no purchase category requirements or spending minimums to earn your full rewards from the PayPal cash back card.

You can use this card to spend on PayPal or wherever Mastercard is accepted worldwide.

Here’s how it works:

  • Earn 3% on Eligible Purchases you make using your Card Account through your PayPal account (online or in-store), or when you use your Card Account to send money to other PayPal users through your PayPal account.
  • Earn 2% on Eligible Purchases made everywhere else that Mastercard is accepted.
  • Eligible Purchases made by any authorized user(s) earns you 2%.

Here are a few things that were excluded from cash back rewards in the fine print:

“Purchases do not include balance transfers, cash advances, convenience checks, disputed or unauthorized purchases/fraudulent transactions or any other transactions that Synchrony Bank may determine in its sole discretion are not eligible to earn Cash Rewards.”

It’s worth noting that your PayPal account must be open and in good standing in order for your credit card to earn and receive cash back rewards. Also, if your card is suspended or closed you will not be able to earn rewards and may be subject to forfeiting the ones you previously earned.

If you’re familiar with your monthly spending habits, here’s a chart to help you understand the amount of cash back rewards you could earn each billing cycle with the PayPal card:

Monthly Credit Card SpendingMonthly Cash Back using PayPal with This Card as Payment Method (3%)Monthly Cash Back Using This Card(2%)
$100$3$2
$250$7.50$5
$500$15$10
$1,000$30$20
$1,500$45$30
$2,000$60$40
$3,000$90$60
$5,000$150$100
$7,500$225$150

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.

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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.

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Redemption: How to Claim Your Cash Back Rewards

Now that you’re clear on what type of spending works for cash back rewards on this card, as well as the amount you could expect to earn each month, you may be wondering how easy it is to get your cash back rewards.

As it turns out, PayPal makes this process pretty simple. So simple that it may actually be easier than your typical cash back credit card.

Here are some things to note about the process:

  • There is no minimum spending requirement to claim your cash back rewards. They are automatically placed in your PayPal account within a few days of earning them.
  • If you want to apply the cash back rewards to your PayPal balance, you must have a PayPal Cash or PayPal Cash Plus debit card linked to the account.
  • If you don’t have either of those debit card options, your cash back rewards will be credited to the bank account linked to your PayPal account.
  • Remember, your PayPal account must be in good standing in order to have the cash back rewards from your credit card awarded.

PayPal Cashback Mastercard vs. Citi® Double Cash Card – 18 month BT offer: Which Is Your Better Option?

If the idea of an unlimited 2% cash back card is on your mind, this is the comparison you’re likely here to see.

As mentioned previously, the Citi Double Cash is one of money expert Clark Howard’s favorite credit cards because it offers a straightforward 2% cash back. You earn 1% cash back as you purchase, followed by an additional 1% cash back earned when you pay your bill.

This PayPal Cashback Mastercard can match that 2% cash back and even exceed it with 3% on PayPal purchases, but does it stack up with the Double Cash in other areas?

Here’s a quick comparison of the cards to help you understand the main differences between the two:

Credit Card PerkCiti Double CashPayPal Cashback Mastercard
Annual Fee$0$0
Intro Period for 0% APR on Balance TransfersYesNone
Intro Period for 0% APR on New PurchasesNoneNone
Cash Back RewardsUp to 2% unlimited (1% when you purchase, 1% when you pay your bill) Unlimited 3% when using PayPal, otherwise unlimited 2%
Cash Back Balance Redemption Minimum$25No minimum
Cash Back Redemption MethodCheck, statement credit, credit to linked bank account, or credit card pointsVia linked PayPal account: Debit card or bank account credit
Welcome Bonus OpportunityNoneLimited time offer
Foreign Transaction Fees3%3%
Apple App Rating4.9 out of 54.8 out of 5
Google App Rating4.6 out of 54.3 out of 5

When trying to decide which is the better fit for your wallet, consider things like your preferred cash back redemption method and whether or not you’d have a use for the Double Cash’s introductory balance transfer offer.

Though Clark recommends that you do not carry a balance on cash back credit cards, another area to consider when comparing the two is the interest rate on new purchases. Your individual APR for each card will vary based on your credit score and other factors.


Final Thoughts

Are you considering adding the PayPal cash back credit card to your wallet? Let’s review some of the pros and cons of the card before you make your final decision:

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PayPal Cashback Mastercard: Pros and Cons

ProsCons
Cash back rewards are greatNo introductory 0% APR period
No annual feeLimited, temporary welcome bonus option
No minimum for cash back redemptionMust use PayPal to receive rewards

Bottom Line: If you are looking for a straightforward cash back card, the PayPal Cashback Mastercard could definitely fill that role in your wallet.

The unlimited 2% cash back on all purchases, ease of redemption of cash back rewards and lack of an annual fee are all real positives. But the gamechanger for this card is the unlimited 3% cash back you can offer if you use PayPal to make a purchase.

If you can make a significant amount of your purchases, either in-store or online, through the PayPal purchase process you could find that this card is a top option for your financial life.

Do you have experience with the PayPal Cashback credit card? Let us know how you like it in the Clark.com Community!


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