PayPal Cashback Mastercard® Review: Unlimited 2% Cash Back Credit Card

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The PayPal Cashback Mastercard offers 2% cash back on all purchases.
Image Credit: PayPal / Clark.com

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

The PayPal Cashback Mastercard® offers a competitive unlimited 2% cash back rewards on qualifying purchases. This number matches the 2% (1% as you spend, 1% as you pay) offered by the Citi Double Cash card, which is one of money expert Clark Howard’s favorite cash back credit cards.

But do the specs of this PayPal offering stack up to Citi’s popular cash back card?

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 upon 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?

The PayPal Cashback Mastercard is a cash back credit card that touts an unlimited 2% cash back rewards program and no annual fee. 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.

The PayPal Cashback Mastercard is one of two credit card offerings from PayPal and should not be confused with the PayPal Extras Mastercard®. Instead of cash back rewards, the Extras card is built on a points system based on spending categories.

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

  • Unlimited 2% Cash Back Rewards: The selling point for this card is this cash back rewards program. An unlimited 2% on all qualified purchases is strong. I checked the fine print for what type of transaction would be prohibited from earning the 2% and there were no surprises. As long as it’s a purchase of a good or service, you should get your 2% cash back.
  • No Annual Fee: Some cards in this category, like the Alliant cash back card that offers 2.5% cash back, 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.
  • No Foreign Transaction Fees: This is a nice perk to have with a cash back card if you travel abroad often. Some of the competing cards in this category charge in the range of 3% per  transaction (post-currency conversion). If you leave the United States for any length of the time, the savings can add up pretty quickly.
  • Easy Reward Redemption: One of the top perks to this card is that there are no spending minimums required to claim your cash back balance. And it’s pretty easy to claim once you’re ready. 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.
  • Mastercard ID Theft Protection: This card offers identity theft protection and support 24 hours per day, 365 days a year under this Mastercard program. You must opt in by enrolling here to access the identity monitoring program that can cover your entire online footprint, not just that which is associated with this card.
  • Zero Fraud Liability: PayPal says cardholders “automatically receive zero liability for any unauthorized charges” through Mastercard.
  • PayPal Protection Program: Purchases made with the PayPal card through PayPal service are eligible for coverage through the PayPal Protection Program at no additional cost.
  • Free Credit Monitoring: This card includes single-bureau credit report monitoring via TransUnion.
  • Mastercard Airport Concierge: Cardholders receive a 15% discount on this service, which works at more than 700 airports. You can find out more about the benefits of using a concierge here.

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 Fees: $28 if you have paid your previous six billing statements on time, $39 if you have not
  • Cash Advance Fees: $5 or 3% of the total advance, whichever is greater
  • 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% 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.

I dug into the fine print to verify what type of purchases qualify for the 2% cash back reward. As long as your purchase is for goods or services, the “net” amount of the transaction (less credits, returns, and adjustments) is eligible to receive the cash back reward. So, in other words, just about everything you buy on a day-to-day basis would qualify.

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 2% cash back from the PayPal card:

Monthly Credit Card SpendingMonthly Cash Back from PayPal Credit Card
$100$2
$250$5
$500$10
$1,000$20
$1,500$30
$2,000$40
$3,000$60
$5,000$100
$7,500$150

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.

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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, so you can pull them back to your PayPal account when you’re ready.
  • 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: 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, 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 Transfers18 monthsNone
Cash Back RewardsUp to 2% unlimited (1% when you purchase, 1% when you pay your bill) 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
Intro Period for 0% APR on New PurchasesNoneNone
Welcome Bonus OpportunityNoneTargeted email offers only
Foreign Transaction Fees3%None
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:

PayPal Cashback Mastercard: Pros and Cons

Pros Cons
Unlimited 2% cash back rewards No welcome bonus opportunity
No annual fee No PayPal purchase incentive
No minimum for cash back redemption No introductory 0% APR period

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

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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 perks are kind of sparse beyond those key features. I was disappointed to learn that you cannot earn any extra rewards by using the card through your PayPal account, and it does not carry any welcome bonuses or introductory periods that many category competitors offer.

Do you have experience with the PayPal Cashback credit card? Let us know how you like it in the comments below!

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