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Citi Double Cash vs. PayPal Cashback: A Battle of 2% Back

Both earn a high flat rate with no annual fee, so consider their redemption options, APRs, other fees and your use of PayPal.
Sept. 19, 2019
Cash Back Credit Cards, Credit Cards
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When it comes to flat-rate cash-back credit cards, 1.5% back is the typical standard — but 2% back is not unheard of.

In that category, the Citi® Double Cash Card – 18 month BT offer has been a perennial favorite, but there’s another big player in town: the PayPal Cashback Mastercard®.

Both cards offer the same 2% cash-back rate on all purchases. (The Citi® Double Cash Card – 18 month BT offer earns 1% when you buy and another 1% when you pay it off.)

Neither card charges an annual fee, and neither will snag you a sign-up bonus.

But other key features set these cards apart, including redemption options, APRs and foreign transaction fees. Here’s how to choose between them.

» MORE: NerdWallet’s best cash-back credit cards

The basics: How these two cards stack up

Here’s a side-by-side comparison of the Citi® Double Cash Card – 18 month BT offer and the PayPal Cashback Mastercard®:

Key featuresCiti® Double Cash Card – 18 month BT offerPayPal Cashback Mastercard®
Annual fee$0$0
Ongoing rewards2% cash back on everything: 1% as you buy and 1% as you pay it off2% cash back on everything.
Sign-up bonusNoneNone
Redemption optionsStatement credit, direct deposit or check.Redeem to your PayPal account, or to your bank account or debit card linked to your PayPal account.
Minimum redemption threshold$25None
APRAn intro 0% on Balance Transfers for 18 months, and then the ongoing APR of 15.99% - 25.99% Variable APRThe ongoing APR is 22.24% - 29.24% Variable
Foreign transaction fee3%None
Purchase protectionAdds two years onto manufacturer's warranty.Doubles the manufacturer's warranty for up to one year.

Why choose the Citi® Double Cash Card – 18 month BT offer?

You don’t have, or want, a PayPal account

In order to apply for the PayPal Cashback Mastercard®, you must have a PayPal account. You can open one before applying, and it’s free. But if you’ve never used PayPal before and have no desire to start now, the Citi® Double Cash Card – 18 month BT offer becomes the obvious choice.

You pay your credit card bill in full

With the Citi® Double Cash Card – 18 month BT offer, you’ll earn 1% cash back as you make purchases and another 1% back as you pay your credit card bill, for a total of 2% cash back. But if you don’t pay your bill off for a particular purchase, you’ll get only 1% cash back (on the purchase itself), plus you’ll pay interest on the balance, potentially wiping out your earnings regardless. NerdWallet recommends paying your monthly credit card bill in full and on time.

You have a balance to transfer

The Citi® Double Cash Card – 18 month BT offer offers an intro 0% on Balance Transfers for 18 months, and then the ongoing APR of 15.99% - 25.99% Variable APR. If you’re looking for a breather on a high-interest balance, you could move it to this card. The 3% balance transfer fee is a factor to think about, but it’s on the lower end for that kind of fee. Keep in mind that you don’t earn cash back on a transferred balance, just on new spending. If your plan is to pay off debt interest-free while not using your credit card for new purchases, there are balance transfer cards with even longer introductory 0% APR periods.

You want a variety of redemption options

Redeem a minimum of $25 worth of cash-back rewards for a statement credit, check or direct deposit to either your Citi checking or savings account, or another checking account you’ve used to pay a Citi credit card bill at least twice.

» MORE: Full review of the Citi® Double Cash Card – 18 month BT offer

Why choose the PayPal Cashback Mastercard®?

You want instant gratification

While you have to wait seven to 10 days to get your physical card in the mail, once your application is approved for the PayPal Cashback Mastercard®, you’ll be granted a temporary credit line to begin using right away.

You want to redeem at any time in any amount

Unlike the Citi® Double Cash Card – 18 month BT offer, which requires that you accumulate a minimum of $25 in rewards before you can redeem them, the PayPal Cashback Mastercard® has no such minimum redemption threshold. This makes it easy to offset smaller expenses like cab rides and cappuccinos. And since you redeem rewards directly into your PayPal balance, it’s even easier to stash away your cash-back rewards to later transfer to your roommate for your share of the electric bill.

You’re happy to use your PayPal account as a middleman

Statement credits and paper checks are not options here. You must redeem your cash back into a PayPal Cash or PayPal Cash Plus account, which is associated with your PayPal account and is where you receive payments, hold on to money, and send money from. (A PayPal Cash Plus account has added features and can be used with a PayPal-branded debit card.) If you’re already an established PayPal user, you may have one of these accounts without even realizing it. Once the cash back has been redeemed into your PayPal account, it’s yours to use on PayPal transactions or transfer to your bank account. If you don’t have a PayPal Cash or Cash Plus account, you can transfer your cash back to the bank account associated with your PayPal account. Either way you redeem cash back, it can end up in your checking account, but it needs to be funneled through PayPal first.

You plan to travel abroad

Both of these cards run on the Mastercard payment network, so either will be widely accepted around the world. But the PayPal Cashback Mastercard® has no foreign transaction fee, whereas the Citi® Double Cash Card – 18 month BT offer charges a 3% foreign transaction fee. If you’re going to travel internationally a lot, consider credit cards with no foreign transaction fee.

» MORE: Full review of the PayPal Cashback Mastercard®

Alternatives to consider

These aren’t the only two cards on the market that earn a higher-than-normal flat rate on everything you buy. Below are some other options:

The Alliant Visa® Platinum Rewards

With the Alliant Visa® Platinum Rewards, you’ll earn 2 points per dollar spent on everything. (Points are worth 1 cent apiece, meaning you’ll get 2% back on every purchase.). The card also offers this sign-up bonus: Earn 5,000 bonus Alliant Rewards points after spending $500 or more in qualifying purchases during the first three billing cycles after the account is opened. The annual fee is $0, but you’ll need to become a member of the Alliant Credit Union to qualify. If you don’t work for or belong to an eligible organization, live or work in a qualifying community, or have a relative who’s already a member, you can still join by donating $5 to Alliant’s partner charity, Foster Care to Success. If you plan to transfer a balance or pay off new purchases slowly, you’ll enjoy an intro APR As low as 0% APR for 12 months, and then the ongoing APR of 15.49% - 25.49% Variable. The 2% balance transfer fee is lower than what credit cards typically charge, too. The one downside for frequent travelers: the 2% foreign transaction fee.

» MORE: Full review of the Alliant Visa® Platinum Rewards

The Alliant Cashback Visa® Signature Credit Card

The Alliant Cashback Visa® Signature Credit Card earns an even higher cash-back rate, but with a catch: an annual fee of $0 the first year, then $99. Still, it’s hard to ignore 3% cash back in your first year, and then 2.5% back after that. There’s no introductory 0% APR for balance transfers or new purchases, but on the bright side, there’s no foreign transaction fee and Visa cards are accepted worldwide. You also must become a member of the Alliant Credit Union to qualify.

» MORE: Full review of the Alliant Cashback Visa® Signature Credit Card

The Fidelity® Rewards Visa Signature® Card

If you want to turn your cash-back rewards into a nest egg, consider the Fidelity® Rewards Visa Signature® Card. In order to earn 2% cash back on all your purchases with this card, you must redeem your rewards into one of the following Fidelity accounts:

  • Brokerage account.
  • Fidelity Cash Management Account.
  • Fidelity-managed 529 College Savings plan.
  • Retirement account.
  • Fidelity Go account.
  • Fidelity Charitable Giving Account.
  • Fidelity HSA.

You also have the option to redeem for travel, merchandise, gift cards or a statement credit, but you won’t get the generous 2% cash-back rewards value.

Pair your 2%-back card with one of these

The Chase Freedom®

The Chase Freedom® earns 5% cash back on up to $1,500 in spending in quarterly rotating bonus categories that you activate (1% back on everything else). Plus, the card offers this sign-up bonus: Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening.

Here are this year’s bonus categories:

Chase Freedom® bonus rewards categories for 2019
Q1 (Jan. 1 - March 31)• Gas stations
• Tolls
• Drugstores
Q2 (April 1 - June 30)• Home improvement stores
• Grocery stores
Q3 (July 1 – Sept. 30)• Gas stations
• Select streaming services
Q4 (Oct. 1 – Dec. 31)• Department stores
• PayPal
• Chase Pay

Use the Chase Freedom® for the 5% cash back, and switch to the Citi® Double Cash Card – 18 month BT offer or PayPal Cashback Mastercard® to earn 2% back on everything else.

» MORE: Full review of the Chase Freedom®

The Blue Cash Preferred® Card from American Express

The Blue Cash Preferred® Card from American Express earns 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 subscriptions; 3% back at U.S. gas stations and on eligible transit; and 1% cash back on everything else. Terms apply.

Reach for this card for your expenses in those above bonus areas, and move to the Citi® Double Cash Card – 18 month BT offer or PayPal Cashback Mastercard® when you buy anything else.

» MORE: Full review of the Blue Cash Preferred® Card from American Express

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