About PayPal Cashback Mastercard
In the late summer of 2017, PayPal shook up the credit card world when they announced the release of the PayPal Cashback MasterCard, a cash-back rewards card that gives consumers 2% cash back to their PayPal balance whenever they make a purchase with the card.
The release of this card signaled the end of the Citi Double Cash’s reign on the cash back world. The Double Cash was, at the time, the only card available to all consumers that gave 2% cash back. However, it had a caveat: you earned 1% at the time of purchase and 1% when you paid off the purchase.
The PayPal Cashback credit card’s no-strings-attached 2% finally gave consumers a way to earn handsome cash back rewards instantaneously. All it takes is having a PayPal account and getting approved for the card.
However, just because a card has good cash rewards doesn’t mean it’s the best fit for you. It takes a little research to figure out all the nuances of a credit card and how those little quirks mesh with how you live.
With that in mind, this review will do a thorough investigation of the PayPal Cashback MasterCard’s rewards, benefits, rates, and fees as well as what other experts are saying about the card.
Once we finish up those sections, we’ll end our review with a simple overview of the card: its pros, cons and who we think the card is good for.
The PayPal Cashback MasterCard’s Rewards
Cash back rewards programs work by a straightforward model. Nearly every time you make a purchase, a small cash deposit is made to your rewards account based on the rewards rate for that purchase.
So, let’s say you get 2% cash back on groceries and you spend $100 at your local supermarket. Your credit card company, in this case, PayPal, will then take 2% of that purchase, $2, and deposit it to your account.
Where all this gets complicated is when you have multiple rewards categories or rewards categories that change every three months.
PayPal’s Cashback MasterCard simplifies everything with one flat rate: 2%. So, you’ll get 2% cash back whether you buy gas, groceries, plane tickets or a dinner at your favorite restaurant.
Every once in a while, though, PayPal will send you notifications about purchases that will earn you a bonus percentage that’s higher than the 2% rate.
These offers are intermittent and, according to the Cashback MasterCard’s rewards program rules, the cash back you earn from them are processed exactly the same way as your regular cash rewards.
Where Do Your Cash Back Rewards Go?
Your cash back is deposited to your PayPal account, which makes this card a little different in the sense that your rewards aren’t applied to your credit card balance like they can be with other rewards cards.
Can You Lose Your Cash Back Rewards?
We combed through the Cashback MasterCard’s terms and conditions and found that you’ll lose your rewards as a result of the following three situations:
- Your credit card account is closed
- Your PayPal account is closed
- Your credit card isn’t linked to your PayPal account
If any one of these situations occurs, then your points will be forfeited and you won’t be able to earn any further cash rewards. Here’s how the card’s fine print puts it:
“To earn Cash Rewards, you must have an open PayPal Account in good standing to which your Card Account is linked … If your Card Account is closed for any reason, your participation in the Program will be terminated, you will cease to earn any Cash Rewards and any Cash Rewards earned, but not redeemed, will be forfeited … If your PayPal Account is closed for any reason, or if your Card Account is no longer linked to your PayPal Account, your Card Account will be closed and any Cash Rewards earned, but not redeemed, will be forfeited.”
The PayPal Cashback MasterCard’s Benefits
Nearly every credit card you’ll come across has rewards and benefits, and research shows that, depending on how old you are, one will be more important to you than the other.
For example, a 2017 study by customer research company J.D. Power revealed that consumers under 40 are more likely to switch credit cards to get better benefits, while those over 40 most often witch because they want better rewards.
On that note, let’s tackle some of the PayPal Cashback MasterCard’s benefits.
Purchase Satisfaction Guarantee
This is one of the little-known features of MasterCard’s benefits program and we think it’s pretty cool.
Let’s say you buy a new vacuum and, after a month of using it, you realize it’s a terrible vacuum because it can’t get all the corners and alcoves around your house.
You go back to the store you bought it from and they refuse to take it back. IF you used your PayPal Cashback card to pay for the vacuum, then you could be eligible for a reimbursement of up to $250 for the original purchase.
Extended Warranty Coverage
This is another one of those benefits that many cardholders don’t know about but that could come in handy.
When you purchase an item with your PayPal Cashback credit card, MasterCard will match the item’s manufacturer warranty for up to one year.
If the manufacturer’s warranty is six months long, MasterCard will add on another six months. If it’s one-year long, another year. If it’s three years, the warranty matching maxes out at one year, giving you four total years of protection.
Another great feature of the MasterCard benefits program is price protection. Let’s go back to the vacuum example we used earlier, but instead of you hating the vacuum you absolutely love it.
There’s one small problem, though. Around 50 days after you bought the vacuum, a store across town put the same vacuum on sale for $50 cheaper than what you bought it for at your neighborhood store.
Because you bought that vacuum with your PayPal Cashback MasterCard, you can actually file a claim and get reimbursed for that price difference.
Zero Fraud Liability
In the event that somebody steals your credit card or your credit card number and uses it to make fraudulent purchases, you aren’t liable for those purchases as long as you notify MasterCard as soon as you notice something suspicious.
Pro tip: To make a claim with MasterCard, call 1-800-MasterCard.
The PayPal Cashback MasterCard’s Rates and Fees
Every credit card comes with a series of rates and fees you’ll be charged if you pay late or don’t pay your balance in full every month.
Consider the rates and fees section as the credit card issuer’s way of earning back some of the cash rewards they give you through the PayPal Cashback MasterCard:
- Purchase APR: 16.99%, 24.99%, 27.99%
- Cash advance APR:
- Cash advance fee: $5 or 3%, whichever is greater
- Late payment fee: $38
- Annual fee: None
- Foreign transaction fee: 3%
To give you an idea of how these rates and fees stack up against the competition, we’ll compare the Cashback MasterCard to the Citi Double Cash, the only other widely-available credit card with 2% cash back.
The Citi Double Cash’s APR ranges from 14.49% to 24.49%, which is considerably lower than the PayPal Cashback MasterCard’s 16.99%/24.99%/27.99%.
Here’s what that means in real life. If you carry a $2,000 balance for a year, you’ll pay $50 more on interest with the Cashback MasterCard’s 16.99% than you will with the Double Cash’s 13.24%.
The other difference between the two cards is the fact that the Citi Double Cash has a penalty APR of up to 29.99% that kicks in when you make a late payment. If that penalty APR kicks in, then you’d pay $260 more on that $2,000 balance than you would with the PayPal Mastercard’s lowest APR.
What Other Sites Are Saying About the PayPal Cashback Mastercard
For the most part, sites other than HighYa are giving the PayPal Cashback credit card average reviews, mainly because the card doesn’t have a sign-up bonus and because, as we’ve pointed out, it features high APRs.
However, that logic works only if you spend $30,000 or less on your card the first year. Those two credit cards have a 1.5% cash back rate and will get you $600 cash back if you spend $30K the first year ($450 of rewards, $150 bonus). That’s the same amount you’d get with the PayPal Cashback.
Once you spend more than $30K in a year, the Double Cash and PayPal Cashback will give you more rewards even without the sign-up bonus.
Pros of the PayPal Cashback MasterCard
Based on our research, we believe the card’s 2% cash back rate is its best feature because only one other card – the Citi Double Cash – can match that on.
The USAA Limitless Cashback Rewards Visa has a 2.5% rate, but the card is only available to USAA members and you can only be a USAA member if you’re in the military or an immediate family member of someone who served.
Cons of the PayPal Cashback MasterCard
The biggest drawback to this card, based on what we’ve seen in the fine print, is the high APR. The card’s interest rate could cost you a considerable amount of money depending on whether or not you carry a balance. The higher the balance you carry, the more that APR will sting you.
Who Is This Card Good For?
We believe this card is best suited for someone who uses PayPal frequently and can take advantage of the fact that all cash rewards on the PayPal Cashback are deposited to your PayPal account.
If you read this review and believe that there may be better cash rewards credit cards out there, check out our article, The Best Cash Back Rewards Credit Cards of 2017.
We compare six different cash back cards across seven categories to determine which card offers the most rewards, all things considered.