PayPal Cashback Mastercard® vs. PayPal Extras MasterCard®

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In a Nutshell

The PayPal Cashback Mastercard® is the clear winner between the two PayPal cards. It offers a much simpler rewards structure with a solid cash back rate on all purchases. The PayPal Extras Mastercard® might be better for people who really maximize its bonus categories, but the additional rewards aren’t enough to make up for the complication.

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PayPal Cashback Mastercard® vs. PayPal Extras Mastercard®

PayPal Cashback Mastercard® PayPal Extras Mastercard®
Rewards structure 2% cash back on all purchases

3 points per $1 at gas and restaurants

2 points per $1 on PayPal and eBay

1 point per $1 everywhere else

Ease of redeeming cash back Easy Moderate
Annual fee None None

What you need to know about each card

Here’s what you need to know about the PayPal Cashback Mastercard® and the PayPal Extras Mastercard®, both issued by Synchrony Bank.

Interestingly, neither of the two cards offers especially great rewards for shopping on eBay or using PayPal. The PayPal Cashback Mastercard® will net you 2% cash back on all purchases, but no special cash back rate for eBay or PayPal purchases. The PayPal Extras Mastercard® does offer bonus rewards on eBay or PayPal purchases, but at a disappointing rate of two points per $1. EBay and PayPal power users could probably do better with a different card if they want to maximize rewards or cash back.

PayPal Cashback Mastercard®: Best for easy rewards

The PayPal Cashback Mastercard® keeps things simple. It offers a flat 2% cash back on every purchase you make. There’s no need to remember bonus categories or other complications. And to make things even easier, you can redeem cash back in any amount. You don’t have to wait until you’ve earned a minimum.

There’s a catch, though — you need to transfer your cash back rewards to your PayPal account. Once transferred, you can use your rewards two ways. If you have a PayPal Cash or Cash Plus account, you can use the cash back to make purchases or send money to pay a PayPal balance. Otherwise, you can transfer your rewards again from your PayPal account to a linked bank account or debit card.

Here are the card’s key features.

  • No annual fee
  • You must have an active PayPal account
  • 2% cash back on all purchases
  • No minimum redemption requirement
  • Accepted online and in store anywhere Mastercard is accepted

PayPal Extras Mastercard®: Best for bonus-category maximizers

The PayPal Extras Mastercard® forgoes a cash back system, instead offering rewards points when you make purchases. You’ll earn three points per $1 spent at gas stations and restaurants, two points per $1 spent on purchases through PayPal and eBay, and one point per $1 spent anywhere else.

While the potential to earn additional points for certain kinds of spending may be appealing, the downside is that you’re likely to earn less overall with the card. When redeemed for cash, one point isn’t worth 1 cent. Instead, points are worth around 0.833 cents each.

Here are the key features of the PayPal Extras Mastercard®.

  • No annual fee
  • You must have a PayPal account
  • Points expire if not used within 24 months of earning them
  • Redeem for more than just cash back
  • Accepted online and in store anywhere Mastercard is accepted

Winner: PayPal Cashback Mastercard®

We think the PayPal Cashback Mastercard® is the better option between the two cards — it offers the most flexibility with its rewards. With cash back, you can redeem your rewards for anything that you can buy with cash.

The PayPal Cashback Mastercard® also keeps things simple. There’s no need to worry about bonus spending categories or which card you should use. You’ll get the same great cash back rate, regardless of where you shop. Taking some of the effort out of deciding where you should use your card can make it easier to rack up the rewards.

While it’s true that the PayPal Extras Mastercard® can offer a slightly higher rewards rate, it only offers that rate on purchases made at gas stations and restaurants. Once you account for the fact that its points are worth less than a penny each when redeeming for cash, it’s hard to justify getting this card, unless you use PayPal a lot.

What are your credit card points and miles worth?

What to consider when applying for a cash back credit card

Cash back credit cards aren’t the only type of rewards cards, but they’re popular for a good reason — they’re easy to understand. Use your card and you’ll get cash back — there’s no complicated points or miles system. Cash is also more flexible. You can redeem your cash back toward anything you can buy.

When you’re applying for a cash back credit card, you’ll need to decide whether you want a card that offers flat-rate rewards, like the PayPal Cashback Mastercard®, or a card that has bonus categories.

As a rule of thumb, flat-rate cards pay a midlevel cash back rate on every purchase, usually 1.5% to 2%. Bonus category cards can offer as much as 6% cash back on certain types of purchases but will offer a lower rate, usually 1%, on nonbonus category purchases.

If you want to keep things simple, go for one flat-rate rewards card. If you’re the type who likes to optimize, you can try carrying multiple cards that each offer bonus rewards for one category of spending. Just make sure that the rewards categories align with the way you already spend and that you pay attention to the fees each card charges so you can decide whether they’re worth it.

Not sure either card is for you? Consider these alternatives.

If you’re still in the market for a cash back card but don’t want to apply for either PayPal credit card, consider one of these alternatives.

  • Chase Freedom Flex℠: If you want a credit card with bonus categories that change every few months, take a look at this card — it offers rotating bonus categories.
  • Capital One® Savor® Cash Rewards Credit Card: If you want a card with set bonus categories that offer a bit more value than the PayPal Extras Mastercard®, consider this card. It offers up to 4% cash back for certain purchases.
  • Citi® Double Cash Card: If you want to earn 2% cash back on every purchase — 1% as you make purchases and 1% as you repay them — but don’t want to open a PayPal account, this card could be a good choice.
  • eBay Mastercard®: Consider this card if you’re an eBay fanatic. The more you spend on eBay, the higher your rewards rate.

About the author: TJ Porter is a Boston-based freelance writer who specializes in bank accounts, credit, and credit cards. He’s written for Bankrate, CardCruncher, DollarSprout and My Bank Tracker, among … Read more.