PayPal 2 percent cash-back card review

Our rating

3 stars 3/5

See explanation of our ratings system

See breakdown of this card’s rating

PayPal is replacing its long-standing category-rewards card with something that’s perhaps a bit more compelling – a card that offers a straight 2 percent cash back. According to the new card’s terms, it will be called the PayPal Cashback MasterCard.

Current cardholders have already gotten emails notifying them of the new product, and according to Dr. of Credit, the new 2 percent version should be available to all starting in late June 2017.

Is the card worth signing up for? Our review will help you decide.


For a while, PayPal has offered the no-annual-fee PayPal Extras card (issued by Synchrony Bank), which is frequently nicknamed the “3/2/1 card” – a rewards card that gives 3 points per dollar at gas stations and restaurants, 2 points per dollar spent at PayPal and eBay and 1 point per dollar on other purchases. Points can be redeemed for hotel stays, car rentals, air travel, cash into a PayPal account, gift cards and more. This card isn’t exactly valued highly by rewards-chasers, as the value of the “points” is pretty ambiguous and often less than 1 cent (you need 6,000 points for $50 cash back, for example).

PayPal also offers (and will continue to offer, even after the 2 percent card hits the market) a no-rewards Platinum MasterCard. The card has no rewards and no real use beyond credit-building. But, if your credit isn’t good enough for the Extras card, you’ll end up with the Platinum version.

The new 2 percent card

The new PayPal Cashback MasterCard (also issued by Synchrony) simplifies the categories and vague “points” system. It also has no annual fee, but offers a straight 2 percent back on everything. The cash back you earn can be transferred (in any increment) to your PayPal balance, where it can be used however you use your PayPal balance (buying things, deposits into your bank account, using your linked PayPal debit card to withdraw money from an ATM).

If you want to redeem for statement credits to pay your credit card bill, there’s no direct way to do that. Instead, you’d need to transfer your balance to a bank account and then use that to pay off your card.

This card, like the other PayPal cards, carries a 3 percent foreign transaction fee.

As with the old PayPal Extras card, this card doesn’t have an advertised sign-up bonus.

There’s no official confirmation yet if the new 2 percent cash-back card will replace the old 3/2/1 Extras card, or if both will continued to be offered.

Applying for the card

You must have a PayPal account (and be logged in) to apply for the card.

If your credit isn’t good enough to qualify for the Cashback card, you’ll be given the no-rewards Platinum MasterCard version, leaving you with the choice of keeping a card you may not want or cancelling it.


As a MasterCard product, the card comes with a suite of perks, including extended warranty, price protection, rental-car insurance and more (check your benefits package upon approval).

A good choice?

Getting an unlimited 2 percent back with no annual fee is still rare enough to make the PayPal Cashback MasterCard compelling. And, if you use PayPal, the redemption rules are flexible. You don’t have to redeem a minimum amount of cash back at a time (unlike other cards). While you won’t get a convenient, instantaneous statement credit as you would with other cash-back cards, you can make transfers to a bank account or use your balance for purchases wherever PayPal is accepted.

However, you need a PayPal account to get the card. If you don’t use PayPal and never want to, this is not the card for you. And there are enough PayPal horror stories out there about frozen balances and poor customer service to give you an idea why many avoid PayPal. Speaking of customer experience, the card is issued by Synchrony Bank, also not known for good customer service.

As with any credit card, we suggest comparing all your options. There are plenty of cash-back cards to consider.

Why we gave it 3 out of 5 stars

We rated this card based on our standards for cash-back cards, as cash back is the primary advertised mode of redemption.

Rewards-earning rate: This card meets our standards for no-annual-fee cards by offering at least 1.5 percent cash back on all spending.
Redemption value: This card meets our standards with a value of at least 1 cent per “point.” You get a value of 2 percent back.
Rewards simplicity and transparency: Cash back must be funneled through your PayPal balance, which is an extra step. So we deducted half a star.
Bonus opportunities: This card’s terms do state that “bonus” cash-back may be given on a limited-time basis for certain purchases. However, there’s no permanent way to earn bonus cash-back, nor is there an advertised sign-up bonus. So we deducted half a star.
Unique perks: This card has no unique consumer-friendly benefits.

Written June 13, 2017

The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

Third time was NOT the charm. My PayPal Cashback credit card is still NOT linked to my PayPall account. I give up! I had intended to replace my CapOne credit card that pays 1.5% with the PayPal card but now will not do so.

Customer service promised me that my PayPal Cashback credit card would be linked to my PayPal account within four business days. That was 6 weeks ago. Didn’t happen. Same promise a few weeks later. Didn’t happen. Stopped using the card and paid off the balance.
Same promise yesterday. Will see if third time is the charm.