PayPal Credit Card Slashes Rewards: 1.5% Outside of PayPal

The card will still earn 3% cash back via PayPal, but its rewards rate on all other purchases has gone from super to so-so.
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Written by Craig Joseph
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Edited by Kenley Young
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PayPal Cashback Mastercard
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An earnings rate of 2% back on all purchases has become the gold standard in recent years for cash-back credit cards. But if you've had your eye on the PayPal Cashback Mastercard® to help you score that rate, you may want to look elsewhere.

For new applicants, the card's rewards rate on purchases not made through PayPal has dropped from 2% back to 1.5%, although the card will continue earning 3% back on spending done through PayPal.

As for existing cardholders, Synchrony Bank says the 2% rate on non-PayPal purchases will remain in effect until July 31, 2024, "and thereafter 1.5%." The card will also retain its $0 annual fee.

From super to so-so

When the PayPal Cashback Mastercard® debuted in 2017, it offered a flat 2% back on all purchases, which alone made the card one of the best cash-back options on the market.

The card only got stronger in 2022, when it added PayPal checkout as a 3% category. The ubiquity of PayPal — both online and in some physical stores — still gives the card a strong value proposition for the right kind of shopper. But its new 1.5% rate on "everything else" is a big devaluation. You can now find multiple credit cards that meet or exceed that rate on most purchases and that — unlike the PayPal Cashback Mastercard® — consistently offer upfront incentives like sign-up bonuses or 0% intro APR offers.

Some possible alternatives to consider:

Citi® Double Cash Card
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  • The Wells Fargo Active Cash® Card earns an unlimited 2% cash back on eligible purchases. New cardholders can also grab the following signup offer: Earn a $200 cash rewards bonus after spending $500 in purchases in the first 3 months.

  • The Citi Double Cash® Card touts a 2% rewards rate on all qualifying purchases: 1% when you make a purchase and 1% when you pay it off. New applicants can also qualify for a big introductory offer: 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.

  • For iPhone users, the Apple Card earns 2% cash back on all non-bonus-category purchases made via Apple Pay.

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