Everything you need to know about PayPal Pay with Rewards
Without a doubt, consumers are spending less on travel.
The ongoing pandemic has significantly impacted the industry as a whole, including decreased demand for flights and hotels. However, that has also opened the door for companies to engage with consumers for things that they are spending on now.
From buying more groceries to getting more food delivered, consumer behavior has shifted dramatically in 2020. And it's not only credit card companies that have responded with new ways for you to redeem your points.
Enter PayPal's Pay with Rewards*. PayPal has made it easier for eligible cardholders to use their points at millions of retailers online.
Today, let's dig into PayPal's Pay with Rewards* feature to see how you can use your eligible credit card rewards at millions of online businesses.
What is PayPal's Pay with Rewards?
At TPG, we always welcome another opportunity to use flexible credit card points and balances – and appreciate when cardholders have more options at their disposal.
By enrolling and linking your eligible credit cards (more on that later) and tapping into your rewards as a budget extension, a way to support small businesses or even donate, PayPal's Pay with Rewards* feature allows customers to shop online using eligible credit card rewards at millions of businesses. Link rewards from credit card issuers such as American Express, Chase, Citi, Capital One and Discover to PayPal, and Pay with Rewards can convert your rewards balance to a dollar figure to put towards online purchases -- including for groceries, clothing stores, food delivery services and more.
Related: Boost your rewards by using PayPal with your credit cards
Earn your rewards
Travel might be down this year, but this is also an ideal opportunity to build up your points balances and strategize for the future.
First, you can earn rewards with your given credit card program as you normally do when you check out with the cards in your PayPal wallet. For example, you can link your Amex to your PayPal wallet, and use that as your preferred funding method anywhere PayPal is accepted online – while still earning points like you normally would with your Amex card. Of course, you'd want to maximize your earnings by using the right rewards card for a respective bonus category.
Don't miss out on building up your rewards balances when you make everyday purchases by linking your card in your PayPal wallet. However, note that you can also redeem points with select PayPal partners:
- American Express Membership Rewards
- Chase Ultimate Rewards (currently live through Chase Pay)
- Citi ThankYou Rewards
- Discover Cashback Bonus
- Capital One Rewards
Related: A review of the PayPal Cashback Mastercard
It takes just a few seconds to add your card through PayPal. Here's what it looks like once an American Express Membership Rewards-earning card is linked:
Spend your rewards
Now, for the fun part. PayPal's Pay with Rewards* feature enables credit cardholders to use rewards points on millions of different items, including essential things that you need most, at millions of online businesses where PayPal is accepted.
Since PayPal is seamlessly integrated into checkout at millions of online merchants, it makes it incredibly easy to use your card points just about wherever and whenever you need it most.
The draw is flexibility and ease
In our evaluation of PayPal Pay with Rewards, we found that the redemption rates were on par with other retail redemptions, and we were able to find individual conversion rates with each credit card provider pretty easily on their respective websites. Although redemption rates aren't as high as you'd get using points for things such as travel directly through your Credit Card platform, the key here is flexibility and ease of use, as well as the ability to use your rewards at businesses you know and love, like small businesses in your community. PayPal's offering expands your choice to the millions of merchants who accept PayPal and don't just limit it to one platform. There are some merchant exclusions, but on the whole we found that paying with Pay with Rewards at checkout was commonly available when checking out with PayPal.
Related: How to use shopping portals to maximize your purchase
Peace of mind with purchases
There's another added benefit to checking out with PayPal. PayPal users also get the secure transactions when using the platform and spending your rewards on eligible purchases. That includes benefits like "Return Shipping on Us**," a refund of eligible return shipping costs, and Purchase Protection*** for eligible items that are not received or were not what was described.
Bottom line
While travel is down in the current environment, there are still plenty of opportunities to use your points elsewhere -- including for everyday purchases using PayPal's Pay with Rewards feature.
As the pandemic wears on, there is a demand for people to use their rewards balances, even for everyday spending. Evaluate your earning and burning strategy. And if you're sitting on a pile of unused points, ensure that you're somehow making use of them.
*Enrollment may be required. Available on eligible transactions. Terms apply.
**Return shipping on Us requires activation and is available for eligible purchases. Limitations apply.
*** PayPal Purchase Protection is available for eligible transactions. Terms and Limitations apply.
TPG featured card
at American Express's secure site
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| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 5X | New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App. |
| 3X | Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines. |
| 2X | Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com. |
| 1X | Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases. |
Pros
- Valuable dining and food-related credits
- Flexible rewards with airline and hotel transfer partners
- Multiple travel and purchase protections
- No foreign transaction fees
- Access to Amex Offers for additional savings (enrollment required)
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $8,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App.
- Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines.
- Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- Pay It® lets you tap in the American Express® App to quickly pay for small purchase amounts throughout the month and still earn rewards the way you usually do. Plan It® gives you the option to split up big purchases into equal monthly payments with a fixed fee. You’ll know upfront exactly how much you’ll pay.
- Updated! $120 Dining Credit: Earn up to a total of $10 in statement credits monthly when you pay with the Gold Card at Grubhub (including Seamless), Buffalo Wild Wings, Five Guys, The Cheesecake Factory, and Wonder. This can be an annual savings of up to $120. Enrollment required.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year at over 10,000 qualifying U.S. Resy restaurants after you pay for eligible purchases with the American Express® Gold Card. That’s up to $50 in statement credits semi-annually. Enrollment required.
- $84 Dunkin' Credit: Earn up to $7 in monthly statement credits after you pay with the American Express® Gold Card at U.S. Dunkin’ locations. Enrollment required.
- $120 Uber Cash on Gold: Enjoy up to $120 in Uber Cash annually with your Gold Card. Just add your Card to your Uber account and you'll get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an Amex Card for your transaction.
- New! As an American Express® Gold Card Member, you can enjoy complimentary Hertz Five Star® Status. Enjoy benefits like skipping the counter at select locations, adding an additional driver at no additional cost*, and vehicle upgrades**. Benefit enrollment and Hertz Gold+ registration are required. *Additional drivers must meet standard rental qualifications and must be a spouse or domestic partner to qualify as complimentary. Other additional drivers subject to fees. **Benefits are subject to availability and vary by location. Additional Hertz program Terms and Conditions including age restrictions apply.
- Take advantage of a $100 credit towards eligible charges* at over 1,300 upscale hotels worldwide when you book The Hotel Collection through AmexTravel.com or the Amex Travel App **. *Eligible charges vary by property. **The Hotel Collection requires a two-night minimum stay.
- Book your travel through the Amex Travel App with added peace of mind – backed by American Express® service and support. Only for American Express® Card Members.
- Whenever you need us, we're here. Our Member Services team will ensure you are taken care of. From lost Card replacement to statement questions, we are available to help 24/7.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.