[Update] Paypal 2% Cashback Mastercard Review

Update 5/10/22: See significant update here

Update 4/4/22: Card is promising an “upgrade” soon. Existing cardholders will automatically get the upgrade. Currently not accepting new applicants. (ht proudmoney)

Update 5/27/21: This card is adding back the 3% foreign transaction fee beginning 7/25/21. Hat tip to reader Jon

Update: They have sent out an e-mail to cardholders informing them that transactions made on or after October 31st, 2017 will no longer have any foreign transaction fee. This is significant because the card earns 2% on all purchases, has no annual fee and is a Mastercard (better exchange rates than Visa & American Express in most cases). Hat tip to readers Rose, Ivan & Mark.

Original Post: 

 

Today, Paypal officially released their 2% cashback credit card, issued by Synchrony Bank, which until now has been available to select customers. Please read our full, updated review of the product: Review of Paypal Cashback Mastercard 2% Everywhere Card.

Here’s the card today on Bloomberg, and here’s the Direct Application Link for the card.

Basically, the card is similar to Citi’s Double Cash card and U.S. Bank’s Fidelity card which offer a flat 2% cashback on all purchases and has no annual fee. A nice perk of the Paypal card over the others is that it does not require a $25/$50 minimum to redeem rewards.

A few notes that became clear today with public launch:

• No signup bonus.
• Reports indicate the card is apparently not replacing the 3/2/1 eBay credit card which will continue to be managed by Paypal as before. Link to eBay credit card on eBay and from Paypal. This means that your 3/2/1 card will not be product changed to become a 2% card. The fact that the 3/2/1 card is getting a face lift and new rules also indicates that it’s here to stay. A commenter says they won’t allow product changes from the old card to the new card either.
• Unknown if they are allowing product changes from the 3/2/1 card to this new card. If you have a data point, please let us know!
• At launch, they were calling the card the Paypal Extras Mastercard. They’ve changed this and are now calling it the Paypal Cashback Mastercard. I’d guess once they decided to keep the Extras card, they wanted to have two separate names.
• The biggest news to me is that there is no indication to what this initial PDF shows that there will be two versions of the card and you won’t know during card application whether you’ll be approved for the 2% card or an inferior card without rewards. As per the public link and the signup process I see in my account, there’s no mention of the Platinum card at all. I don’t know if that card even exists. This is good news since most of us would rather be declined than get the no-rewards card.  I don’t know if they’ve disbanded that plan completely or what. I’ve updated our review of the card to reflect this change. It’s also interesting that there are a couple of differences between the public product and that PDF. For example the PDF shows up to $37 late fee and the actual product shows up to $38. The APRs shown are different as well. I’d guess that they shifted from created two products and decided to create one with staggered APRs. I think that was a smart thing to do and keep it simple with one product.
• Sources indicate that this card will also issue an instant-use card number upon approval. The older eBay/Paypal card gives a $250 credit line upon approval for use online until the card comes in the mail, and the new Cashback Mastercard is doing the same. Also see List of Credit Cards that Issue an Instant Card Number Upon Approval.

If they do some aggressive marketing, the card may well become highly popular in the world at large. A lot of us have cards that get a value of more than 2% everywhere, including the Alliant and USAA 2.5% cards and other points cards which we value more than 2%. Still, Citi basically has the popular flat 2% world to themselves until now, and Paypal might be able to gain a nice following with this card.