[DISCLOSURE: Cards from our partners are mentioned below.]
Cash back credit cards can be a boon for your wallet, as they reward you for everyday spending. Depending on your habits, you can rack up rewards just for hitting the pump, shopping online or booking with United Airlines, for instance. If you happen to find a good card, it can reshape the way that you spend.
PayPal, the worldwide online payments system, recently partnered with Mastercard and Visa to broaden its reach, a year after parting with eBay. Now the payment company has rolled out its branded credit card products offered through Synchrony Bank: the PayPal Extras Mastercard and PayPal Platinum Mastercard. For the purposes of this article, we’ll focus on the former product, which offers rewards for eligible purchases.
What Is the PayPal Credit Card?
The PayPal Extras Mastercard is a PayPal-branded credit card that automatically enrolls members in its Rewards Program. It carries a variable annual percentage rate (APR) of 21.74%, 25.74% or 28.74% based on creditworthiness and is only available to U.S. residents. This card has no annual fee. Here’s a closer look:
PayPal Extras Mastercard
Rewards Details: Cardholders earn three points for every dollar spent on gas and dining; two points per dollar on PayPal and eBay purchases; and one point for all other purchases.
Annual Fee: None
APR: Variable 21.74%, 25.74%, or 28.74%
The Pros & Cons of a PayPal Credit Card
On the plus side, the PayPal Extras Mastercard comes fully loaded with all the perks you’d expect from a Mastercard: an extended warranty program, which doubles an original manufacturer’s or store brand warranty for up to one year when you pay with the card; price protection, meaning you may be reimbursed for the difference in an item’s price within 60 days of purchase; and purchase assurance, which covers stolen or damaged items within 90 days of purchase. The issuer’s satisfaction guarantee offers refunds of up to $250 if a store will not accept a return within 60 days of purchase.
Beyond that, PayPal Extras Mastercard offers handsome rates of return anywhere Mastercard is accepted. Members can earn three points for every dollar spent on gas and dining; two points per dollar on PayPal and eBay purchases; and one point on all other purchases. As the site points out, members can redeem 800 points to receive gifts cards for restaurants, gas and retail, while 6,000 points is equivalent to $50 cash back, credited to your PayPal account. A travel voucher for airfare, hotels or car rentals is equivalent to 15,000 points.
As with most rewards credit cards, your credit must be in decent shape to qualify. If for some reason it’s not, chances are you’ll be turned, and your credit score may suffer due to the hard inquiry. If your credit’s OK but you’re not sure if you can handle the temptations of a rewards card, it may be best to sit this one out. Swiping only to earn more rewards could send you down a spiral of debt if you’re not careful, and you don’t want to lose your hard-earned rewards to high interest. Speaking of high interest, this card’s variable APR is a whopper, at 21.74%, 25.74% or 28.74% depending on your creditworthiness when you apply. (Not sure where your finances stand? You can view two of your free credit scores on Credit.com.)
In terms of rewards, you’ll want to use them wisely: “Accrued Reward Points that are not redeemed will be forfeited 24 months (2 years) after they were first accrued or if there are no purchases for 12 consecutive months,” PayPal’s site says. Also, cardholders forfeit any rewards they’ve accrued if they miss two or more consecutive minimum payments or the account is closed for any reason other than a stolen or lost card. Finally, only the primary cardholder is allowed to redeem the rewards.
How to Apply for a PayPal Credit Card
If you’re wondering how to apply for PayPal credit, you can simply visit the company online. Fair warning: You must be a PayPal customer in order to get started, as the site will ask for a username and password. According to the company’s FAQ section, “When you apply, you’ll be asked if you’d like to set your new PayPal Extras Mastercard, PayPal Platinum Mastercard or PayPal Smart Connect account as your preferred payment method for your PayPal account.” (PayPal Smart Connect is a line of credit offered by the payment service.)
Our Picks for Alternatives to PayPal Credit Cards
If PayPal’s high interest rates aren’t quite what you’d like, there are many rewards card alternatives. Here are two of our picks.
- 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 16.99-25.74%. Balance transfer fee is 5% of the amount transferred, $5 minimum
- Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening
- Earn 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate
- Enjoy new 5% categories each quarter
- Unlimited 1% cash back on all other purchases - it's automatic
- Cash Back rewards do not expire as long as your account is open and there is no minimum to redeem for cash back.
- Free credit score, updated weekly with Credit Journey℠
- No annual fee
Card Details +
Why We Picked It: The Chase Freedom card (see full review here) touts handsome rewards. Cardholders can earn 5% cash back on up to $1,500 in purchases in revolving categories each quarter and unlimited 1% cash back on everything else. And they’re eligible for a $150 bonus after spending $500 in the first three months of account opening.
Rewards Details: Cash back rewards are tracked as points, and each dollar is equivalent to 100 points. Members need at least 2,000 points to redeem for cash back.
Discover it® Cash Back
- INTRO OFFER: Discover will match ALL the cash back you've earned at the end of your first year, automatically. There's no signing up. And no limit to how much is matched.
- Earn 5% cash back at different places each quarter like gas stations, grocery stores, restaurants, Amazon.com and more up to the quarterly maximum, each time you activate.
- Plus, earn unlimited 1% cash back on all other purchases - automatically.
- Redeem cash back any amount, any time. Rewards never expire.
- Use your rewards at Amazon.com checkout.
- Receive FREE Social Security number alerts-Discover will monitor thousands of risky websites when you sign up.
- No annual fee.
Card Details +
Why We Picked It: Solid rewards, excellent service and no annual fee. For a limited time, the company is offering an automatic dollar-for-dollar match of all the cash back members earn at the end of their first year.
Rewards Details: Cardholders earn 5% cash back in new bonus categories each quarter, upon activation. All other credit card purchases earn 1% cash back, and cash back never expires. You can also use rewards instantly at Amazon.com checkout.
At publishing time, the Discover it and Chase Freedom credit cards are offered through Credit.com product pages, and Credit.com is compensated if our users apply and ultimately sign up for this card. However, these relationships do not result in any preferential editorial treatment.
Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.