PayPal Cashback Review: 3% Back via PayPal, 2% on All Else

The ability to earn at least 2% back on all purchases is among the best flat rates you'll find, and the ubiquity of PayPal checkout means you'll often earn an even higher rate than that.
Aug 11, 2022

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Our Take

4.3

NerdWallet rating 
The bottom line:

It's one of the best flat-rate cash-back cards on the market — as long as you're willing to have and use a PayPal account.

Jump to: Full Review
PayPal Cashback Mastercard
PayPal Cashback Mastercard®
Annual fee
$0
Regular APR
16.49%, 25.49% or 28.49%, Variable APR
Intro APR
N/A
Rec. credit score
690-850 (Good - Excellent)

Pros & Cons

Pros

  • No annual fee

  • High rewards rate

  • Cash rewards

Cons

  • Must be a member/customer

  • No 0% intro APR

  • Foreign transaction fee

Alternate Pick: Up to 5% cash back
Discover it® Cash Back
NerdWallet rating 
Discover it® Cash Back
Higher rewards in quarterly bonus categories

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 – 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.

Read our review

Compare to Other Cards

NerdWallet rating 
NerdWallet rating 
NerdWallet rating 
Annual fee

$0

Annual fee

$0

Annual fee

$0

Regular APR

16.24%-26.24% Variable APR

Regular APR

13.49%-24.49% Variable APR

Regular APR

16.49%-25.24% Variable APR

Intro APR

0% intro APR on Balance Transfers for 18 months

Intro APR

0% intro APR for 15 months on purchases and balance transfers

Intro APR

0% intro APR for 15 months on purchases and balance transfers

Recommended Credit Score
Recommended Credit Score
Recommended Credit Score
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Full Review

Finding a credit card that offers an unlimited 2% cash back on everything you buy can be a great value. But adding a way to also earn 3% back on many purchases elevates the PayPal Cashback Mastercard® to a top tier among cash-back cards.

High flat-rate cash-back cards are enticing because they have the ideal combination of being simple and rewarding. No fussing with different rewards for different purchases or activating reward categories every quarter. This card, issued by Synchrony Bank, isn't quite that simple because it has two rewards rates. But they're easy to remember, and the card is free to carry, with an annual fee of $0.

You’ll get an unlimited 3% cash back when you use the PayPal Cashback Mastercard® as the funding source for PayPal retail checkout. That alone would be decent. But you also get a value hammer: 2% back on all other purchases that accept Mastercard.

That's a winning combination of value and simplicity.

A minor catch is that to apply you must have a PayPal account, which is free.

PayPal Cashback Mastercard®: Basics and benefits

  • Card type: Cash back.

  • Annual fee: $0.

  • Rewards: 3% cash back on PayPal purchases, 2% back on all other purchases.

  • Sign-up bonus: For a limited time, new cardholders can earn a sign-up bonus of $100 cash back when you spend $500 in the first 90 days.

  • Foreign transaction fee: 3%.

  • APR: The ongoing APR is 16.49%, 25.49% or 28.49%, Variable APR.

Where the PayPal Cashback Mastercard® shines

Simplicity

This card has two different rewards rates, but they’re easy to remember: unlimited 3% cash back at PayPal checkout and 2% back on other purchases that accept Mastercard.

True, other cards offer higher cash-back rates on spending at certain places, like gas stations and restaurants. But 2% flat-rate cash-back cards have the benefit of being both rewarding and simple.

If you use this as your primary credit card, you’ll be earning 2% back for most purchases. But it’s worth noting when a retailer allows you to pay using PayPal, such as a PayPal button during online checkout. (You can also use it in-store when there’s a PayPal QR code available as a payment option.) Choose that, and you'll earn 50% more rewards (3% cash back).

A few examples of the many, many retailers that offer PayPal checkout: 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®.

🤓Nerdy Tip

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.

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.)

PayPal Cashback Mastercard®: Drawbacks and alternatives

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 $1,000 in purchases in the first 3 months.

'Only' 2% or 3% back on spending

Earning 2% or 3% back on all spending is an excellent return among flat-rate cards. However, other cards offer even 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.

🤓Nerdy Tip

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.

If it’s a balance transfer you’re after, consider the longtime favorite among cash-back enthusiasts, the Citi® Double Cash Card – 18 month BT offer. 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 16.24%-26.24% Variable APR.

However, it usually has no sign-up bonus and no 0% offer on purchases.

🤓Nerdy Tip

Although the Citi® Double Cash Card – 18 month BT offer does not usually come with a sign-up bonus, the card currently has this offer in effect: For a limited time, earn $200 cash back after spending $1,500 on purchases in the first 6 months of account opening.

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 15 months and 0% intro APR on Balance Transfers 15 months from account opening on qualifying balance transfers, and then the ongoing APR of 17.24%, 22.24%, or 27.24% Variable APR.

Welcome bonus

Intro APR offer

One-time $200 cash bonus after you spend $500 on purchases within 3 months from account opening.

0% intro APR for 15 months on purchases and balance transfers, and then the ongoing APR of 16.49%-26.49% Variable APR; 3% fee on the amounts transferred within the first 15 months.

$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 on Purchases for 15 billing cycles and 0% intro APR on Balance Transfers for 15 billing cycles for any balance transfers made in the first 60 days, and then the ongoing APR of 16.24%-26.24% Variable APR.

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 for 15 months on purchases and balance transfers, and then the ongoing APR of 16.49%-25.24% Variable APR.

Foreign transaction fee

It’s easy to recommend this card for nearly all types of transactions except one: purchases abroad. The card 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.

Is the PayPal Cashback Mastercard® 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 few other cards can match: an unlimited 3% cash back on PayPal checkout and 2% back on all other purchases that accept Mastercard. If you're still on the fence, check this list to find the best credit card for you.

Methodology

NerdWallet reviews credit cards with an eye toward both the quantitative and qualitative features of a card. Quantitative features are those that boil down to dollars and cents, such as fees, interest rates, rewards (including earning rates and redemption values) and the cash value of benefits and perks. Qualitative factors are those that affect how easy or difficult it is for a typical cardholder to get good value from the card. They include such things as the ease of application, simplicity of the rewards structure, the likelihood of using certain features, and whether a card is well-suited to everyday use or is best reserved for specific purchases. Our star ratings serve as a general gauge of how each card compares with others in its class, but star ratings are intended to be just one consideration when a consumer is choosing a credit card. Learn how NerdWallet rates credit cards.