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Cash-back bliss: A review of the PayPal Cashback Mastercard

May 11, 2020
8 min read
a young man sits at a cafe while shopping on his smartphone
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PayPal Cashback Mastercard® Overview

For a cash-back card, it doesn't get much better than the PayPal Cashback Mastercard. If you're looking for a rewarding card that offers simple cash back -- and don't mind using the PayPal platform -- this card makes a whole a lot of sense. Very few competitors can match the impressive 2% cash-back earning rate that this PayPard card awards. Card Rating*: ⭐⭐⭐⭐

*Card Rating is based on the opinion of TPG's editors and is not influenced by the card issuer.

Contactless digital wallets and online payment systems like PayPal are popular for paying friends and businesses with just a few clicks. PayPal also offers two credit cards, one of which is spotlighted in this review.

The PayPal Cashback Mastercard is high on our list of cash-back cards for its uncomplicated 2% return on anything purchased. If you're putting a priority on cash back in the current economic environment, this card fits the bill.

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One downside, however, is that if you're not a regular PayPal user, you'll have to go through an extra step to transfer your funds to an external account. In many cases, this is worth the effort. Let's take a closer look at the PayPal Cashback Mastercard to see if it's right for you.

The information for the PayPal Cashback Mastercard has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

Who is this card for?

A valuable cash-back card is an important component of any wallet. Whether as a standalone card or combined with other cards that offer richer rewards or more perks, the PayPal Cashback Mastercard is valuable for most people. That's because it has a high, flat-rate 2% earning on everything you buy and no annual fee.

The card targets existing PayPal users and is also an effort to attract new customers to the platform. For those familiar with PayPal's electronic payment service, this Mastercard would be a breeze to use.

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Keep in mind that you'll need a PayPal account to even apply, but it takes just a few simple steps. If you can jump this slight hurdle, you'll be positioned to reap the cash-back rewards.

Welcome offer

Although the 2% cash back rate is higher than average, the PayPal Cashback Mastercard does not offer any welcome bonus. There is also no introductory rate on balance transfers or purchases. This is a bit disappointing compared to some other no-annual-fee cards. For instance, the Chase Freedom (No longer open to new applicants) offers $200 back after you spend $500 on purchases in your first three months from account opening.

The information for the Chase Freedom has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

However, another cash-back card that's near the top of our list, the Citi® Double Cash Card.

Earning, perks and benefits

(Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images)
(Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images)

Obviously, the biggest draw here is the 2% cash-back earning on anything and everything (as long as that merchant accepts Mastercard). The simplicity of this card is fantastic, and you don't have to think about bonus categories or spending limits. Of course, you should spend only what you can afford since it never pays to accrue a monthly balance and pay interest on any rewards card.

Although there are no category bonuses with this card (like the 5% cash back/5x quarterly rotating bonuses with the Chase Freedom), this is still a solid option if you didn't want to use multiple cards.

The PayPal Cashback Mastercard also allows you to receive cash back at any time -- there are no redemption thresholds. Some cards require you to reach a minimum amount of cash back (like $25 or $50) before being permitted to cash out. Also, the instant access to this card is a noteworthy benefit -- you usually don't have to wait for the card to arrive in the mail to begin using it.

It shouldn't come as a surprise that with a no-annual-fee card there aren't any notable perks. However, this PayPal card does come with a few bare-bones, generic Mastercard core benefits. These include:

  • Mastercard ID Theft Protection
  • Mastercard Global Service that includes lost and stolen card reporting, emergency card replacement and emergency cash advance
  • Microchip technology

How to redeem

First, rewards are available for transfer to your PayPal account a billing period after the period in which you earn them. Essentially, you’ll earn one month and can redeem the next month. (As mentioned, you can choose to redeem rewards at any time thanks to the absence of redemption thresholds.)

To make a transfer, cardholders go through the following steps:

  • Log into your PayPal account
  • Access your rewards summary page
  • Transfer the amount of your choosing to your PayPal balance (if you have a PayPal Cash or PayPal Cash Plus account)

When it comes to redemptions for non-PayPal users, you have to go through an extra step to use your cash back by transferring to an external bank account. It's quite easy to do but still is a minor annoyance compared to the simplicity of other programs not tied to PayPal.

Other cards to consider

There are other no-annual-fee, cash-back options to consider, although 2% cash back is really the best it gets for spending in nonbonus categories.

Citi Double Cash

A simple and rewarding cash-back card is the Citi Double Cash Card. This card earns you 2% cash back (1% when you buy and then another 1% as you pay).

Read the full Citi Double Cash review.

Wells Fargo Propel American Express® card

The Wells Fargo Propel technically earns points but these points are redeemed at a fixed value, so this essentially is a cash-back card. There's no annual fee, and you will earn 3x on a number of common spending categories, including dining (eating out and ordering in), gas stations, transit, travel, and select streaming services. If these are your usual purchases, this Wells Fargo card can be even more lucrative than the PayPal Cashback Mastercard.

Read our full Wells Fargo Propel review.

The Wells Fargo Propel card is no longer available for new applicants. The information for this card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

Chase Freedom

(Photo by John Gribben for The Points Guy)
(Photo by John Gribben for The Points Guy)

If you don’t mind keeping track of quarterly categories and spending caps, you can get a lot out of the Chase Freedom's 5x bonuses (up to the first $1,500 spent each quarter you activate). The bonus categories are typically valuable for that season and easy to maximize. Plus, if you have a card that earns Ultimate Rewards points (such as the Chase Sapphire Preferred Card), you can combine points and maximize earnings even further.

Read the full Chase Freedom card review.

Related: The best cash-back card of 2020


How do I apply for the PayPal Cashback Mastercard?

To apply for the PayPal Cashback Mastercard, you'll have to sign up for a PayPal account to begin the process.

What stores accept the PayPal Cashback Mastercard?

Any retailer or merchant that accepts Mastercard will accept the PayPal Cashback Mastercard.

Does this PayPal credit card have a foreign transaction?

No, the PayPal Cashback Mastercard does not have a foreign transaction fee. This is uncommon for a card with no annual fee.

Bottom line

The PayPal Cashback Mastercard is a solid, albeit no-frills, credit card for cash-back enthusiasts. If you’re in the market for a 2% cash-back card with no annual fee, this is a great option. However, if you want a card that offers a welcome bonus, features more benefits and perks and is not affiliated with PayPal, look elsewhere.

Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.