PayPal Cashback Mastercard vs. Venmo Credit Card: How They Differ
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PayPal and Venmo have a lot in common: PayPal owns Venmo, they’re both ways to quickly send your roommate your share of the water bill, and they both offer no-annual-fee cash-back credit cards issued by Synchrony.
When it comes to how they earn rewards, however, the PayPal Cashback Mastercard® and Venmo Credit Card go their separate ways. Plus, unlike more traditional cash-back credit cards where you redeem rewards for a statement credit or direct deposit into your bank account, the PayPal Cashback Mastercard® and Venmo Credit Card require you to have a PayPal or Venmo account, respectively.
You can open those accounts before applying for one of these cards if you wish, but if you pride yourself on being the person who still writes a check to pay a friend back, there are other cards to choose from.
How they compare at a glance
Annual fee: $0.
Annual fee: $0.
Sign-up bonus: Varies based on current offer.
Sign-up bonus: None.
The eight bonus categories: transportation, travel, grocery, entertainment, dining and nightlife, bills and utilities, health and beauty, and gas.
How to redeem rewards: Redeem rewards directly into your PayPal balance and use the funds to make a payment on your PayPal Cashback Mastercard®, pay for a purchase made through PayPal, send money to family and friends or transfer funds to your bank account.
How to redeem rewards: Earned rewards will automatically appear in your Venmo account. Use them to pay your credit card bill, send money to others, shop where Venmo is accepted as a form of payment or transfer the funds to your bank account.
PayPal also used to offer the $0-annual-fee PayPal Extras Mastercard®, but it's no longer available to new applicants. It wasn't a cash-back card. Instead, it earned 3 points per $1 on gas and at restaurants, 2 points per $1 on PayPal and eBay purchases, and 1 point per $1 on everything else. Points could be redeemed for gift cards, merchandise, travel vouchers or cash back into your PayPal account.
Why choose the PayPal Cashback Mastercard®: Consistent cash back
If you want a simple, steady, straightforward rewards rate without having to think about where and when to use your card, the PayPal Cashback Mastercard® earns 3% cash back when you pay with PayPal at checkout, and 2% back on all other purchases. That makes it a good all-around choice if you only want to manage one card, especially if you pay through PayPal often. It could also make it a fitting companion for another card that earns more than 2% back in specific spending categories.
This card periodically offers sign-up bonuses for a limited time. If you didn’t get the card when a bonus was available, keep in mind that a card earning 1.5% back, with a bonus, may be a better deal for you, depending on your spending.
Don’t want to create a PayPal account?
The Wells Fargo Active Cash® Card earns 2% cash back on all purchases. Earn a $200 cash rewards bonus after spending $500 in purchases in the first 3 months. The annual fee is $0.
Why choose the Venmo Credit Card: Extra earnings, futuristic features
The Venmo Credit Card features bonus spending categories that automatically readjust each billing cycle based on where you spend the most, which makes it easy to maximize your earnings with minimal effort. You’ll earn 3% cash back in your top spending category (from one of eight possible categories), 2% back in your second-highest category and 1% on all other purchases. There’s no need to activate bonus categories or track anything. The ability to earn bonus rewards could make it more lucrative than the PayPal Cashback Mastercard® if you don’t use PayPal at checkout very often.
The card is built for on-the-go management and cost-splitting. You can track your spending and pay your credit card bill through the Venmo app. You can also split an expense with friends — simply pay, and then your friends can scan the QR code on your card. Your account will pop up on their phone and they’ll be able to send you money. (You also scan your own QR code to activate the card.) Plus, you have instant access to a virtual card upon application approval while you wait for the physical card to arrive.
Don’t want to create a Venmo account?
The Blue Cash Preferred® Card from American Express earns extra rewards in popular spending categories: 6% cash back at U.S. supermarkets on up to $6,000 in spending per year (then 1%), 6% back on select U.S. streaming services; 3% back on eligible transit and at U.S. gas stations; and 1% everywhere else. Terms apply (see rates and fees). It comes with a fee, currently: $0 intro annual fee for the first year, then $95. But the card’s welcome bonus offer helps offset the cost.
The case for carrying both cards
A flat-rate card plus a bonus-category card is a classic credit card pairing that makes it possible to earn more on every purchase, but it does take some work. In the case of these two cards, you’d need to anticipate where you’d spend the most (within the eight specific categories) in a month and use the Venmo Credit Card for those purchases, and then use the PayPal Cashback Mastercard® anywhere the Venmo Credit Card would only earn 1% back, thus earning at least 2% back every time.
Here’s how that could work: You’re booking a pricey trip this month, so travel would be your No. 1 category. Use the Venmo Credit Card to earn 3% back. If you know offhand what your second-highest category would be, you could use the card on those purchases, too, but since the PayPal Cashback Mastercard® also earns at least 2%, you can just use that for any non-travel spending. Ta-da! Everything you buy earns 2% to 3% cash back.
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