PayPal Cashback Mastercard®

Best for PayPal cash back

• Rewards rate: 2 percent cash back on all purchases
• Welcome offer: N/A
• Annual fee: $0
• Purchase intro APR: N/A
• Balance transfer intro APR: N/A
• Regular APR: 19.99%-26.99% (variable)

The PayPal Cashback Mastercard is a high-powered engine for flat-rate cash back, and it is one of the few rewards cards to reap unlimited 2 percent cash back on all purchases. It’s a no-brainer if you’re a frequent PayPal user, but you’ll need an account to earn and redeem cash back.

If this isn’t an issue for you, the PayPal Cashback Mastercard is a pretty low-maintenance card considering it has no annual fee. However, the catch is that it carries a higher ongoing interest rate and fewer benefits than many other no annual fee credit cards.

Current sign-up bonus

Unfortunately, the PayPal Cash Back card doesn’t currently offer a sign-up bonus.

This isn’t shocking, since the most comparable card, the Citi® Double Cash Card, also doesn’t offer an intro bonus. However, plenty of 1.5 percent flat-rate cash back cards provide sign-up bonuses worth around $200.

Cash back

Cardholders who feel like bonus category cards shoehorn their spending into a smaller selection of merchants might prefer the PayPal Cashback Mastercard’s flat-rate cash back on all purchases—perfect for expenses that don’t fall into traditional cash back categories.

Earning cash back

Since it’s a co-branded card, you can earn PayPal cash back in the form of account credits on all purchases. You’ll rake in unlimited 2 percent cash back on purchases with any merchant that accepts Mastercard credit cards—not just from PayPal spending.

Redeeming cash back

Here’s the kicker that might turn away potential cardholders: To receive cash back, you must have a PayPal Cash account, PayPal Cash Plus account or a standard PayPal account with a linked debit card or bank account.

Even then, your PayPal credit card cash back isn’t automatically added to your balance. You must log into PayPal and transfer the cash rewards to either your PayPal balance or your linked debit card/bank account. Luckily, you can redeem any amount of cash back you choose from your rewards balance.

This probably isn’t a big deal if you’re considering a PayPal credit card in the first place, but creating an eligible account and the extra steps might not be worth it if you prefer another digital wallet program or simply want direct cash back.

How much are rewards worth?

Like many other cash back cards, each percentage point of cash back is worth 1 cent. So, each dollar you spend will net you 2 cents.

Benefits

Other than cash back, Mastercard benefits are practically your only other card features. The PayPal Cashback Mastercard only provides standard ID Theft Protection credit monitoring and EMV chip payments with your card, but you may qualify for more benefits through Mastercard and your PayPal account.

Mastercard benefits

Your PayPal card may carry a plethora of valuable Mastercard benefits depending on your credit limit. Based on your credit line, your PayPal cash back card may qualify as a standard Mastercard, World Mastercard, or World Elite Mastercard.

Standard Mastercards comes with basic protection perks like zero liability protection for unauthorized purchases. World Mastercards and World Elite Mastercards carry better features, including cellphone protection, shopping protections, a complimentary ShopRunner membership and luxury travel benefits.

Rates and fees

Any cash back you earn can go a bit farther with the PayPal Cashback Mastercard, since there are no annual or foreign transaction fees to eat into your rewards.

Just try to avoid carrying a balance, because there are no zero-interest offers to guard you from the 19.99 percent to 26.99 percent (variable) ongoing purchase APR. The PayPal Cashback Mastercard is currently not accepting balance transfers.

Unfortunately, this ongoing interest rate is well above average. Plus, competing flat-rate cards rewards cards may sprinkle a 0 percent introductory APR on top. If you’re worried about carrying a balance and getting buried in interest, you might want to pick a different card.

How the PayPal Cashback Mastercard compares to other cash back cards

Unless you start collecting interest charges, the PayPal Cashback Mastercard is a pretty low-cost card with a hard-to-match cash back rate. But considering the PayPal card’s rewards redemption-limitations and interest rate, the Citi Double Cash Card might be a better option.

The Double Cash delivers up to unlimited 2 percent cash back (1 percent back at purchase, 1 percent when you pay) on all purchases. Plus, it’s a great balance transfer card with its 18-month, 0 percent intro APR on balance transfers (13.99 percent to 23.99 percent variable ongoing, 3 percent balance transfer fee with $5 minimum).

They might not offer as high of cash back rate, but other no annual fee flat-rate cards may carry a greater number of benefits if that’s where you find value. Although they might not provide unlimited cash back, a few credit cards may also offer higher-earning reward categories for PayPal purchases.

Best cards to pair the PayPal Cashback Mastercard with

In order to maximize your flat-rate cash back, you should consider pairing it with bonus category cards for higher cash back rates on your biggest expenses. A rotating category card like the Chase Freedom Flex℠ could be a great option, because it could offer a 5 percent cash back (on up to $1,500 in purchases, then 1 percent ) quarterly category for PayPal purchases, upon activation. The Freedom Flex also earns unlimited 5 percent back on Chase Ultimate Rewards travel and unlimited 3 percent at restaurants and drugstores.

If you’d rather have more consistent bonus categories, a versatile card with a comprehensive online shopping category would be a great compliment to your PayPal card, such as the Bank of America® Cash Rewards credit card.

Bankrate’s Take—Is the PayPal Cashback Mastercard worth it?

The PayPal Cashback Mastercard offers top-rate, flat cash back at an unlimited 2 percent. It’s a worthy competitor to the Citi Double Cash Card by providing immediate 2 percent back before you pay off purchases, but its lack of any zero-interest offer and higher ongoing APR (19.99 percent to 26.99 percent variable) are worth weighing.

This card is definitely a great fit if you do any kind of online shopping or selling or if you don’t mind the sparse features and the few extra minutes it takes to redeem your cash back through PayPal.

Pros

• Stellar cash back: 2 percent on all purchases
• No annual fee
• No foreign transaction fees

Cons

• Above-average ongoing APR with no intro 0 percent APR offers
• Not currently accepting balance transfers
• Very limited card features
• PayPal is required to earn and redeem cash back

All information about the PayPal Cashback Mastercard® has been collected independently by Bankrate and has not been reviewed or approved by the issuer.