PayPal Cashback Review: 3% Back via PayPal, 1.5% on All Else
The Bottom Line
4.3
If you're a heavy PayPal user, it can be one of the most lucrative cash-back cards on the market. But the card's 1.5% rate on all other purchases is easily matched or bested by others.
Rates, fees and offers
Annual fee
$0
Rewards rate
1.5%-3%
Bonus offer
None
Intro APR
N/A
Ongoing APR
APR: 19.74%, 31.49%, or 34.49%, Variable APR
Cash Advance APR: 34.49%, Variable
Penalty APR: Up to 35.49%, Variable
Foreign transaction fee
3% of each transaction
More details from PayPal
- With the PayPal Cashback Mastercard, you’ll earn unlimited 3% cash back when you checkout with PayPal and 1.5% on all other purchases everywhere else Mastercard is accepted—unlimited cash back, no rotating categories, and no annual fee. Plus, apply with no impact to your credit score if you’re declined.
- Combine merchant cash back offers with cash back you earn with your card. Just save the offers in the app and we'll automatically apply them at checkout.
- With the Mastercard ID Theft Protectionâ„¢ benefit, you will be alerted to possible identity theft.
Pros and Cons
Pros
No annual fee
High rewards rate
Cons
Must be a member/customer
No 0% intro APR
Foreign transaction fee
Detailed Review
If you do much of your shopping via PayPal — whether online or in-store — the $0-annual-fee PayPal Cashback Mastercard® is one of your best options, thanks to its rich and uncapped 3% cash-back rate on all PayPal spending. A rate that high is hard to beat.
But when it comes to any other kind of spending, the Synchrony Bank-issued card offers only a pedestrian 1.5% cash back — not a terrible rate, but easily beaten by any number of competitors.
The card also tends to lack some of the upfront incentives you typically find on other cash-back credit cards, such as a sign-up bonus or a 0% intro APR period.
One other minor catch is that to apply, you must have a PayPal account, which is free.
The PayPal Cashback Mastercard® used to offer 2% cash back on all other spending not done through PayPal, which at the time made it one of the best cash-back cards on the market. But that 2% rate was slashed to 1.5% in May 2024. (Existing cardholders can still earn the 2% rate until July 31, 2024.)
PayPal Cashback Mastercard®: Basics
Card type: Cash back.
Annual fee: $0.
Rewards: 3% cash back on PayPal purchases, 1.5% back on all other purchases.
Sign-up bonus: None
Foreign transaction fee: 3%.
APR: The ongoing APR is 19.74%, 31.49%, or 34.49%, Variable APR.
» MORE: How does PayPal work?
Compare to Other Cards
Benefits and Perks
Simplicity
This card has two different rewards rates, but they’re easy to remember: unlimited 3% cash back at PayPal checkout and 1.5% back on other purchases that accept Mastercard.
True, 1.5% is fairly ho-hum by today's standards; it's the bare minimum you should look for in a good cash-back credit card. But the ubiquity of PayPal at the point of sale — online, but also in some physical stores via a PayPal QR code — means you'll encounter plenty of places to double your cash-back rate to an impressive 3%.
A few examples of the many, many retailers that offer PayPal checkout: Apple, Walmart, eBay, Zappos, Netflix and Etsy. Several travel companies also allow PayPal checkout, including Airbnb, American Airlines and United Airlines. A couple of American Airlines plane tickets totaling $1,000 would amount to $30 cash back with little effort.
Naturally, you must choose the funding source of the PayPal payment to be the PayPal Cashback Mastercard®.
You can also earn 3% back with the PayPal Cashback Mastercard® when you send money to another person via PayPal while using your credit card as a funding source. But when you use a credit card as a funding source through PayPal, you incur a fee. At this writing, the fee is 2.9% plus 30 cents per transaction. Factoring in the card's 3% rewards rate, you'd be close to breaking even.
As of this writing, authorized users cannot earn the 3% rewards rate because their cards can’t be added to a PayPal account.
Easy redemption
Redeem your cash back in any amount. (Technically, you need 1 cent worth of rewards.) Some other cards require you to rack up $25 or more before you can cash in.
And you have access to your rewards every day without having to wait for a monthly statement cycle. Earned rewards will be available for redemption about three days after an eligible purchase.
Based on account type, customers can choose how to receive cash-back rewards — make credit card payments, transfer funds to a linked bank account or debit card, or just fund your PayPal account for other PayPal transactions.
Regarding the types of accounts, the card’s terms and conditions spell it out: If you have a PayPal Balance account (PayPal's version of a bank account), rewards can be used to make payments, make purchases, send money to other PayPal users, or transfer to your bank account or debit card linked to your PayPal account. If you do not have a PayPal Balance account, rewards can only be transferred to your bank account or debit card linked to your PayPal account.
Use it almost anywhere
To be clear, you can use this card to pay for things via your PayPal account, but you don't have to make purchases that way. It's a regular credit card; it can be used in stores and online — everywhere Mastercard is accepted, even if the retailer doesn’t accept PayPal at checkout. Just be aware that you'll earn only 1.5% back that way.
Instant access
In most cases, once you're approved for this card, a temporary credit line will instantly be added to your account, and you can start using it on PayPal immediately — you don't have to wait for a physical card to arrive in the mail. (That will take seven to 10 business days.)
Drawbacks and Considerations
Need a PayPal account
You must have a PayPal account to apply. If you want a more traditional credit card from a major bank, consider the Wells Fargo Active Cash® Card.
This card offers an unlimited 2% cash back on all purchases and has an annual fee of $0. It also comes with a sign-up bonus: Earn a $200 cash rewards bonus after spending $500 in purchases in the first 3 months.
Modest rewards on any non-PayPal spending
The PayPal Cashback Mastercard® once offered 2% back on "all other spending" not done through PayPal, but that 2% rate was reduced to an unspectacular 1.5% back in 2024. And again, while a 1.5% rate isn't bad, plenty of cards offer higher cash-back rates for spending at certain types of merchants. Here are some options.
Rotating categories: Some cards offer 5% back in bonus categories that change quarterly. In the past, categories have included useful areas of spending such as gas stations, restaurants and supermarkets. Good examples are the Chase Freedom Flex® and the Discover it® Cash Back. Both offer 5% back in categories that you activate, on up to $1,500 in spending per quarter (equal to $75 in cash back), and 1% on all other spending.
Permanent categories: Other rewards cards have bonus categories that don't change. The Chase Freedom Unlimited® is a good example. It earns 5% cash back on travel booked through Chase, 3% back at restaurants and drugstores, and 1.5% back on other purchases.
Optimizers can boost cash rewards by using a bonus-categories card to get higher earnings on certain purchases, and using the PayPal Cashback Mastercard® for everything else (and PayPal checkout). Using the cards in tandem, you improve your cash back with only a little more effort.
No intro APR rate
The PayPal Cashback Mastercard® offers no promotional interest-rate offer for purchases or balance transfers. And while it has occasionally featured a sign-up bonus, it's been inconsistent.
If it’s more upfront incentives you’re after, consider the longtime favorite among cash-back enthusiasts, the Citi Double Cash® Card. It gives you 2% cash back: 1% back on every dollar you spend, then an additional 1% cash back for every dollar you pay off.
Its promotional balance-transfer offer: 0% intro APR on balance transfers for 18 months, and then the ongoing APR of 18.49%-28.49% Variable APR.
Although the Citi Double Cash® Card has not traditionally offered a sign-up bonus, the card currently has this offer in effect: 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.
If you’re after an interest-free period on new purchases, consider the aforementioned Wells Fargo Active Cash® Card.
Its promotional APR offer: 0% intro APR on Purchases for 12 months and 0% intro APR on Balance Transfers 12 months from account opening on qualifying balance transfers, and then the ongoing APR of 19.49%, 24.49%, or 29.49% Variable APR.
Examples of flat-rate 1.5% cards with introductory incentives
Empty Table Header | Welcome bonus | Intro APR offer |
|---|---|---|
Earn a one-time $200 cash bonus after you spend $500 on purchases within 3 months from account opening. | 0% intro APR on purchases and balance transfers for 15 months; 19.74%-29.74% variable APR after that; balance transfer fee applies. | |
$200 online cash rewards bonus after making at least $1,000 in purchases in the first 90 days of your account opening. | 0% Intro APR for 15 billing cycles for purchases, and for any balance transfers made in the first 60 days. After the Intro APR offer ends, a Variable APR that’s currently 18.74%-28.74% will apply. | |
Earn an additional 1.5% cash back on everything you buy (on up to $20,000 spent in the first year) - worth up to $300 cash back! | 0% intro APR on purchases and Balance Transfers for 15 months, and then the ongoing APR of 19.99%-28.74% Variable APR. |
Foreign transaction fee
The PayPal Cashback Mastercard® carries a 3% foreign transaction fee, which is not unusual for a cash-back credit card. But it means you’ll want a different card when traveling outside the U.S. or buying from foreign online merchants.
How To Decide If It's Right For You
If you already have a PayPal account and don’t mind redeeming cash rewards into it — or an associated bank account — you have cleared the minor hurdles for getting and using the PayPal Cashback Mastercard®. The upside is a simple and valuable cash-back card that gives heavy PayPal users an unlimited 3% cash back at PayPal checkout.
But if you're not a dedicated PayPal user, the card's 1.5% rate on all other purchases is unremarkable and easily matched, or bested, by several other cash-back cards.
If you're still on the fence, check this list to find the best credit card for you.
Earn 5% cash back in rotating categories that you activate (on up to $1,500 per quarter in spending), and 1% on all other spending. Bonus: INTRO OFFER: Unlimited Cashback Match for all new cardmembers – only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. You could turn $150 cash back into $300. Annual fee: $0.
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Methodology
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