The Citi Premier® Card is no longer available for new applicants. Terms apply to American Express benefits and offers. Visit americanexpress.com to learn more.
The PayPal Cashback Mastercard® is a straightforward cash-back credit card that delivers solid value without any frills.
As you spend on the card, you'll earn 3% cash back on PayPal purchases and 1.5% on all other purchases. The cash back you earn goes directly into your PayPal account.
Below, CNBC Select breaks down the rewards, benefits and fees associated with the PayPal Cashback Mastercard to help you decide if it's right for your needs.
Benefits and perks
The PayPal Cashback Mastercard is concise in its offering, making it a great fit for consumers looking for a simple way to save money on their purchases.
However, there are a few features to the card worth noting, including:
- 3% cash back on PayPal purchases and 1.5% on all other purchases, and the rewards never expire
- Instant access to credit line for PayPal purchases
- Free identity monitoring
The only caveat to this card is that you must have a PayPal account open and in good standing before applying for the card. It's free to open and takes about two minutes. You can open an account here, just be sure to select the 'personal' account.
Additionally, this card doesn't have a welcome offer like many other cash back credit cards.
How to earn and redeem cash back
Earning cash back on spending
Select calculated how much cash back the average American can earn in a year when using their PayPal Cashback Mastercard. We worked with the location intelligence firm Esri, who provided us with a sample annual spending budget of $22,126.
The budget includes six main categories: groceries ($5,174), gas ($2,218), dining out ($3,675), travel ($2,244), utilities ($4,862) and general purchases ($3,953).
With all spending considered, this would give a cardholder at least $442 in cash back in the first year. Over a five year period, cardholders could potentially earn a minimum of $2,212 — although the total amount will depend on an individual's annual spending habits and on whether PayPal is used for any purchases.
Redeeming cash back
You can redeem the earned cash back in two ways:
- Direct deposit to your checking account
- Redeem the cash back for PayPal purchases
Many online merchants accept PayPal as a payment method, and you can use the cash back you've accrued on the card for your purchase.
Rates and fees
The card has no annual fee. It has a 3% foreign transaction fee on all international purchases.
Late payment fees can be up to $41.
Card comparison
While the PayPal Cashback Mastercard is a solid pick as a cash back credit card, there are other cards that are potentially more lucrative to consider to help you save on your purchases.
PayPal Cashback Mastercard vs. Citi Double Cash® Card
The Citi Double Cash® Card is another great cash-back credit card as it offers 2% cash back on all purchases: 1% on all eligible purchases and an additional 1% after you pay your credit card bill.
The card also offer a valuable intro 0% APR for the first 18 months on balance transfers (17.49% - 27.49% variable thereafter; balance transfers must be completed within 4 months of account opening and there's an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. After that, your fee will be 5% of each transfer (minimum $5), which is a great way to save on interest charges on revolving credit card debt.
So if you're debating between the two cards, the cash-back potential is identical, except that the PayPal card earns 3% on PayPal purchases. If you also have a Citi card that also earns transferrable Citi ThankYou® Points, like The Citi Premier® Card, you can transfer your cash back from your Citi Double Cash® Card into Citi ThankYou® Points. These points can then be transferred to airline partners, where you'll often get much more value from your points when redeeming this way.
If you need to consolidate existing credit card debt, the Citi Double Cash card is also a better choice.
The Citi Double Cash® Card is one of the best no-annual-fee cash-back cards thanks to its straightforward rewards structure. Card is one of the best no-annual-fee cash-back cards thanks to its straightforward rewards structure.
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- 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.
- Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases. To earn cash back, pay at least the minimum due on time. Plus, earn 5% total cash back on hotel, car rentals and attractions booked with Citi Travel.
- Balance Transfer Only Offer: 0% intro APR on Balance Transfers for 18 months. After that, the variable APR will be 17.49% - 27.49%, based on your creditworthiness.
- Balance Transfers do not earn cash back. Intro APR does not apply to purchases.
- If you transfer a balance, interest will be charged on your purchases unless you pay your entire balance (including balance transfers) by the due date each month.
- There is an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. After that, your fee will be 5% of each transfer (minimum $5).
Balance transfer fee
There is an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. A balance transfer fee of 5% of each transfer ($5 minimum) applies if completed after 4 months of account opening.
Foreign transaction fee
3%
PayPal Cashback Mastercard vs. Blue Cash Preferred® Card from American Express
The Blue Cash Preferred® Card from American Express is a solid pick for a cash back card for your wallet.
When you spend on the card, you will earn:
- 6% cash back at U.S. supermarkets on up to $6,000 per year in eligible purchases (then 1%)
- 6% cash back on select U.S. streaming subscriptions
- 3% cash back at eligible U.S. gas stations, 3% cash back on transit including taxis/rideshare, parking, tolls, trains, buses and more
- 1% cash back on other purchases
And the card comes with a valuable welcome offer where you can earn as high as $300 cash back after spending $3,000 in purchases on your new Card in the first 6 months. Apply to find out your offer. If approved, you'll: 1. Find out your offer amount, 2. Accept the Card with your offer, 3. Spend $3,000 on purchases in your first 6 months 4. Receive the cash back. Cash back is received in the form of Reward Dollars that can be redeemed for a statement credit or at Amazon.com checkout. Welcome offers vary and you may not be eligible for an offer.
The card comes with perks too like *rental car insurance and return protection. Eligibility and Benefit level varies by Card. Terms, Conditions and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details.
Lastly, the card has a $0 intro annual fee for the first year, then $95. (See rates and fees).
So if you're deciding between the two cards, it comes down to a simple math equation and your own preference. The welcome bonus and the higher cash-back categories will likely make the Blue Cash Preferred the better card in year one. However, after the first year, depending on your spending and preferences, the two cards' rewards may be closer. So if you plan on holding either one of these cards long term, be sure to weigh which one will earn you more cash back based on your spending habits.
The Blue Cash Preferred® Card from American Express is a low-fee card with generous cash-back rewards and useful ongoing benefits, such as a monthly Disney Bundle credit. (Enrollment required for select benefits mentioned)
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- Apply and find out your welcome offer. As High As $300 cash back* after you spend $3,000 in purchases on your new Card within the first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply, and if approved: 1. Find out your offer amount 2. Accept the Card with your offer 3. Spend $3,000 in 6 months 4. Receive the cash back. *Cash back is received in the form of Reward Dollars that can be redeemed for a statement credit or at Amazon.com checkout.
- $0 intro annual fee for the first year, then $95.
- Enjoy 0% intro APR on purchases and balance transfers for 12 months from the date of account opening. After that, your APR will be a variable APR of 19.49%-28.49%.
- Plan It®: Buy now, pay later with Plan It. Split purchases of $100 or more into equal monthly installments with a fixed fee so you don't have the pressure of paying all at once. Simply select the purchase in your online account or the American Express® App to see your plan options. Plus, you'll still earn rewards on purchases the way you usually do.
- Earn 6% cash back at U.S. supermarkets on up to $6,000 per year in eligible purchases (then 1%), 6% cash back on select U.S. streaming subscriptions, 3% cash back at eligible U.S. gas stations and on transit (including taxis/rideshare, parking, tolls, trains, buses and more) purchases and 1% cash back on other purchases. Cash Back is received in the form of Reward Dollars that can be redeemed as a statement credit and at Amazon.com checkout.
- Get up to a $10 monthly statement credit after using your enrolled Blue Cash Preferred® Card for a subscription purchase, including a bundle subscription purchase, at DisneyPlus.com, Hulu.com, or Stream.ESPN.com U.S. websites. Subject to auto-renewal.
- Terms Apply.
- See Rates & Fees
Balance transfer fee
Either $5 or 3% of the amount of each transfer, whichever is greater.
Foreign transaction fee
2.7% of each transaction after conversion to US dollars
Who the PayPal Cashback Mastercard is best for
The PayPal Cashback Mastercard® is a great fit for someone who doesn't want to pay an annual fee and for those who want a no-frills cash-back credit card that connects to their PayPal account. It also should be appealing to those who don't want to keep track of bonus spending categories all the while still earning a respectable amount of cash back on all purchases.
The cash back earned can go straight into your PayPal account, which can than be either deposited into your bank account or used for future purchases using PayPal. If you're a frequent PayPal user, it could be convenient to have the rewards deposited straight into your PayPal account.
Bottom line
The PayPal Cashback Mastercard is a solid cash-back credit card for consumers looking for simplicity and a way to save on their purchases. However, it's light in other benefits and features.
But before you open a new credit card to save on your purchases, it's best to ensure you have a solid budget in place to manage your monthly spending and to make sure you're in a financially stable place.
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For rates and fees of the Blue Cash Preferred® Card, click here.
*Car Rental Loss or Damage Coverage is offered through American Express Travel Related Services Company, Inc.
Information about the PayPal Cashback Mastercard® has been collected independently by Select and has not been reviewed or provided by the issuer of the card prior to publication.
