PayPal Cashback Mastercard® Review: Is the 3% PayPal Bonus Still Worth it?

The PayPal Cashback Mastercard® can be a smart fit if PayPal is your go-to for online and in-store payments. You’ll earn a whopping unlimited 3% cash back when you pay with your card through PayPal, with no bonus categories to track and no annual spending caps.

Unfortunately, it only earns 1.5% back on the rest of your purchases — a significant step down from the 2% it used to offer. And while there’s no annual fee, the card’s perks and protections are limited. Plus, Synchrony’s customer service can be underwhelming and some users report checkout glitches.

If you want a true “one card” setup, you’ll likely earn more with a flat-rate competitor like the Citi Double Cash^® Card.

Recommended credit: Credit scores ranges may vary. Your individual chance at approval may vary due to factors such as creditors using a particular variation at their discretion Good / Excellent

Rewards Rate: 1.5% - 3% cash back

• Earn 3% cash back on PayPal purchases
• Earn 1.5% on all other purchases

Welcome offer: N/A

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Rates

• Intro purchase APR: N/A
• Regular purchase APR: 18.74% variable for Account Type 1 or 30.49% variable for Account Type 2 or 33.49% variable for Account Type 3
• Intro balance transfer APR: N/A
• Regular balance transfer APR: N/A
• Regular cash advance APR: 33.49% variable
• Penalty APR: 34.49% variable

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Fees

• Annual fee: $0
• Balance transfer fee: N/A
• Cash advance fee: Either $10.00 or 5% of the amount of each cash advance, whichever is greater
• Foreign exchange fee: 3%
• Late fee: Up to $40

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Other benefits

• PayPal’s purchase protection program
• Mastercard ID Theft Protection

• 3% cash back on PayPal purchases

  The card’s unlimited 3% cash back on PayPal purchases is a standout perk if you regularly use PayPal Checkout. While PayPal allows you to link any credit card or bank account to its service, few options offer such strong rewards. To earn the 3% cash back rate, you just have to link your PayPal Cashback Mastercard® to your account and use the card through PayPal checkout.

  Note: Sending money through PayPal or buying from PayPal won’t earn 3% cash back.

  Most rewards credit cards limit their highest rewards to select bonus categories (like travel, dining, gas or groceries), require activation and/or have a cap on their rewards. With the PayPal Cashback Mastercard®, as long as the merchant offers PayPal Checkout, you’ll automatically earn 3% cash back with no limits.

  PayPal is accepted at millions of locations online and in person. Popular brands that accept PayPal include: American Airlines, Airbnb, Calvin Klein, Forever 21, Ugg, Netflix, Under Armour and Etsy. Just look for the PayPal option when checking out online or at the cash register.

  You can stack your cash back with PayPal offers. Use the PayPal app or website to find offers, then pay with PayPal Checkout. The offers automatically apply to eligible purchases.

• A simple two-card setup: PayPal for 3%, another card for everything else

  Because the PayPal Cashback Mastercard® drops to 1.5% outside PayPal Checkout, many people treat it as a “PayPal-only” card — and that can be the smartest way to use it. Since there’s no annual fee, you can reserve it for PayPal purchases without having to outearn a fee.

  Then, you can put everything else on a flat-rate card like the Citi Double Cash^® Card. This way, you’ll earn up to 2% cash back on every transaction. 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.

  Staff tip: Pair it with the PayPal Debit Card.

  “The PayPal Debit Card offers 5% cash back in a category of your choice on up to $1,000 in purchases. I’ve been using it for groceries and my husband’s card for fuel. With two teenagers, these are two of our biggest monthly expenses, so rewards really add up. You can even earn rewards at Walmart and Sam’s Club, which typically aren’t considered ‘grocery stores.'”

  – Charlotte Zhang, credit card writer, LendingTree

• Redemption feels frictionless for PayPal users

  Redeeming is simple with the PayPal Cashback Mastercard®. Cash back typically posts within three days after the purchase (rather than when the statement closes).

  Also, you can transfer any amount of cash back into your PayPal spending account or bank account at any time. Many cards, like the Bank of America^® Customized Cash Rewards credit card, have a minimum redemption amount of at least $25. With the PayPal Cashback Mastercard®, you don’t have to worry about sitting on unused rewards.

• Weaker everyday rewards

  The PayPal Cashback Mastercard® earns a solid 1.5% cash back on everyday purchases, but this is a step down from the 2% it used to earn. That’s why many former cardholders have moved to higher-earning catch-all cards.

  If most of your spending is outside PayPal Checkout stores, consider switching cards or pairing the PayPal card with a 2% cash rewards card like the Wells Fargo Active Cash^® Card.

  Watch out for surcharges when you use your PayPal Cashback Mastercard® at checkout. LendingTree research indicates nearly 2 in 3 cardholders have paid these extra fees when making a purchase.

• Potentially high APR

  While its rewards are nice, this card’s APR can sting. Depending on your credit score, you’ll either get a 18.74% variable for Account Type 1 or 30.49% variable for Account Type 2 or 33.49% variable for Account Type 3, which is extremely high. If you have a lower credit score and tend to carry a balance on credit cards, you should skip this one — you could end up paying a ton of interest.

  → Read more: What’s the average interest rate on new credit card offers?

• Customer support issues

  Customer support is a common pain point among cardholders. The PayPal Cashback Mastercard® is issued by Synchrony Bank. Despite being one of the smaller card issuers, Synchrony has the fourth-highest number of complaints among the top 10 issuers, according to LendingTree research.

  Many cardholders report issues with Synchrony customer service, including unexpected credit limit decreases and card closures. Making matters more complicated, if you have questions about your account, you may end up in a runaround between Synchrony and PayPal.

  What to do if you have a dispute:

  • Contact Synchrony for account/rewards disputes.
  • Keep all order confirmations.
  • Track how much cash back you earn versus how much you’ve received.
  • Include PayPal transaction IDs for quicker research.
  • Notify the CFPB if Synchrony or PayPal won’t resolve your issue.
  Watch out: Some users report issues with their card not showing up as a payment method when they make a purchase with PayPal Checkout. Before making a large purchase, confirm that your card is correctly linked to your PayPal account.

To get the highest cash back rates on your purchases, you need to link your PayPal Cashback Mastercard® and select it when using PayPal Checkout. You can do this online or through the PayPal app (Apple or Google).

Follow these steps to add your card:

1. Log in to your account at PayPal.com.
2. Click on “Wallet” on the top menu bar.
3. Click on “Link a card or bank”.
4. Click on “Link a debit or credit card”.
5. Click on “Link a card manually”.
6. Enter your card information and click “Link Card”.

Citi Double Cash^® Card

The Citi Double Cash^® Card is a smart choice for people who want to earn a high cash back rate on every purchase. It effectively delivers a 2% return on purchases (1% when you buy and 1% when paying for purchases), so it’s a great alternative if you don’t use PayPal often or don’t want the extra hassle. As an added bonus, you can transfer Citi ThankYou^® Points to a limited number of travel loyalty programs.

Chase Freedom Unlimited^®

The Chase Freedom Unlimited^® matches the PayPal Cashback Mastercard®‘s rate on general purchases and has no annual fee, but with more upside. It also includes a generous welcome offer and extra rewards on Chase Travel^SM, dining and drugstore purchases. Pair it with an eligible Chase Ultimate Rewards^® credit card, and you can transfer points to airlines and hotels. New customers can also take advantage of a low intro APR on purchases and balance transfers.

Bank of America^® Customized Cash Rewards credit card

The Bank of America^® Customized Cash Rewards credit card is a better option for people who want a bonus on online purchases without being restricted to PayPal. If you select “Online Shopping” as your choice category, you’ll earn rewards that rival the PayPal Cashback Mastercard®. You’re limited to $2,500 in purchases per quarter and you won’t earn the same rate on offline retail purchases, but you won’t be restricted to sites that accept PayPal Checkout. Plus, if you’re a Bank of America Preferred Rewards^® member, you can get up to a 75% bonus on your earnings.

The PayPal Cashback Mastercard® is a good pick if you use PayPal Checkout frequently when shopping online or in-store. With unlimited cash back and no annual fee, this card is a long-term keeper.

The catch is that everything outside PayPal Checkout earns only 1.5%. For people who don’t use PayPal Checkout frequently, it makes sense to stick with one card that offers a higher rate of cash back on every purchase, like the Wells Fargo Active Cash^® Card or Citi Double Cash^® Card.

→ Need a card to use outside of PayPal? See the best cash back credit cards

We take a comprehensive, data-driven approach to identify the best cash back credit cards. We use an objective rating and ranking system that evaluates over 200 credit cards from more than 50 issuers. All recommendations are made by LendingTree’s editorial team, completely independent of affiliate partnerships or compensation. Every card is selected based on its merit and ability to help people achieve their financial goals. We use the following criteria to make our picks:

• Average value over two years (50% of rating): We calculate the cash back earned for the average cardholder using Bureau of Labor Statistics data and an annual spend of $20,000, minus the annual fee. This value includes sign-up and annual bonuses. We look at the average rewards earned over two years to balance out a card’s ongoing value with its first-year value.
• Flexibility of rewards (30% of rating): We consider how easy the rewards are to use, looking at factors like expiration dates and minimum thresholds to redeem.
• Other features (20% of rating): We also compare a card’s benefits, such as purchase and travel protections, against benefits from other cards.