PayPal Launches a 2% Cash Back Rewards Card: Double is the New Rewards Standard

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PayPal’s new Cashback Mastercard, launched Aug. 30, is packed with features that pin it head to head with the current highest no-fee flat-rate cash back credit card on the market.

The PayPal Cashback Mastercard® is a no-fee rewards card that offers users a flat 2 percent cash back upfront on all eligible purchases made using the credit card. The offer is a step up from the current leading cash back card, the Citi® Double Cash Card, which credits 1 percent upfront and another 1 percent on what cardholders pay off each billing cycle.

The digital and mobile payment company partnered with Synchrony Bank to launch the Cashback Mastercard, which grants users benefits exclusive to PayPal and Mastercard members.

Although it boasts a generous cash back offer, the PayPal Cashback Mastercard® has its drawbacks.

“The 2 percent cash back rate is a solid offer. But the PayPal Cashback Mastercard® falls short in three main ways: no sign-up bonus, high APR and no 0% introductory period,” says Chris Mettler, president of our sister site CompareCards.com.

How the PayPal Cashback Mastercard® works

PayPal is clearly targeting PayPal users with this new cash back rewards card. The application for PayPal’s new credit card is only open to existing PayPal customers. Access to the application is granted after users submit a username and password to log in to a PayPal account.

They are then redirected to an application on the Synchrony Bank website. After filling in sensitive information, applicants have the option to set the card as a default payment option in their PayPal wallet and purchase Synchrony Bank’s card security program before submitting the form.

If approved, customers are charged one of three variable interest rates — 16.99%, 24.99% or 27.99% — based on creditworthiness and other factors like income. PayPal doesn’t charge cardholders an annual fee.

Cardholders can earn an unlimited, flat 2 percent cash back on all eligible purchases made using the PayPal Cashback Mastercard®. The cash back rewards are credited directly to the user’s digital wallet on PayPal. The money stored on PayPal wallet can be used to make purchases where PayPal is accepted, sent to peers, or cashed out to a bank account.

Cardholders don’t need to wait for a physical card to show up in the mail before they can start earning rewards. Users have immediate access to the line of credit through their PayPal account. PayPal’s Cashback Mastercard will show up right away in their PayPal wallet, where it can be used to make purchases or pay bills online.

How to qualify for the PayPal Cashback Mastercard®

Borrowers with good or excellent credit scores are most likely to qualify for the PayPal Cashback Mastercard, but those working to better a poor credit score may qualify for a card, too.

Applicants are approved for one of three interest rates, based on creditworthiness and other factors. The lowest rate, 16.99%, is offered to applicants with the best scores, whereas the highest rate, 27.99%, is reserved for applicants who are a greater credit risk.There is a 24.99% APR that’s likely to go to anyone that falls in between.

What we like about the PayPal Cashback Mastercard®

2 percent cash back on all eligible purchases

PayPal’s Cashback Mastercard® is now the highest, no-fee rewards card on the market. The 2 percent cash back feature is the greatest value to credit card users who want a simple, straightforward way to earn rewards. This cash back card is ideal for users who make most of their everyday purchases on a credit card and pay off the card’s balance each month.

Cardholders will get 2 percent cash back on all eligible purchases made at Paypal.com, eBay.com and anywhere Mastercard is accepted using the PayPal Cashback Mastercard®.

Automatically added to PayPal Wallet

The credit card is automatically linked and added to the PayPal wallet, a digital wallet that lets users pay for purchases online with linked bank accounts, credit and debit cards, or money on the account balance. That means users opening the card to make a purchase can gain access to the line of credit and earn rewards for spending right away.

Redeem cash rewards to PayPal balance

To use any cash back earned, users must transfer the money to their PayPal balance. Once in the digital wallet, that money can be used to complete online purchases, pay bills, or send money to peers all over the world.

No cash back restrictions

PayPal doesn’t cap the amount of cash back users can earn or set a minimum on the amount of cash back a user can redeem. Plus, cash back rewards won’t expire, so users aren’t pressured to use the money or lose it by a certain date.

Mastercard benefits

PayPal Cashback Mastercard® users also gain exclusive Mastercard cardholder benefits. They include doubling the length of warranty coverage on purchases up to one year, 60-day price protection, and Mastercard’s identity theft protection service.

What we don’t like about the PayPal Cashback Mastercard®

For PayPal customers only

You must have a PayPal account in order to apply for a PayPal Cashback Mastercard® account and keep the account open to maintain the credit account.

If your PayPal account is closed, or you unlink the card from your PayPal account, your card account will be closed. If you have cash back available, you won’t be able to redeem those awards, and they will be forfeited.

If your PayPal account is suspended for any reason, you won’t be able to redeem cash back to your PayPal balance until the account is back in good standing.

No sign-up bonus

The PayPal Cashback Mastercard® misses an opportunity to offer users even more value by omitting a sign-up bonus. If users are looking to earn a boost in credit rewards after a few months of use, they may have more luck with a cash back card like Chase Freedom®, which offers 1 percent back on all purchases and a $150 signing bonus after cardholders spend $500 in the first three months the account is open.

No interest-free period

The card’s benefits also exclude an interest-free period. So while users can make a purchase with the line of credit immediately after opening the account using the PayPal wallet, they should avoid making large purchases as interest will begin to accrue right away.

Credit users should instead use a credit card with an interest-free period like the Discover it Cash Back® credit card, so they have more time to pay off the balance of the purchase before interest kicks in. The card offers an 0% introductory APR for 14 months on purchases and balance transfers.

A high APR

Cardholders should be careful not to carry a balance on this card to avoid getting hit with interest charges. For borrowers with a poor credit rating, the card charges a super high 27.99% APR, which trumps any 2 percent cash back earned that period. To avoid paying interest and make the most of the Cashback Mastercard, cardholders should make sure to pay off the card balance each period.

3 percent foreign transaction fee

It costs cardholders 3 percent to swipe the PayPal Cashback Mastercard® overseas. Even with 2 percent cash back, users end up paying 1 percent to make foreign purchases.

Who the PayPal Cashback Mastercard® is best for

The PayPal Cashback Mastercard® is best for existing PayPal customers who want a straightforward way to earn cashback on all of their everyday purchases.

If a cardholder is a heavy online shopper, the Cashback Mastercard may also be a good choice because they can easily earn cash back from using the card as a payment option when they pay online using PayPal, then credit the cash back to their PayPal balance for future purchases.

PayPal Cashback Mastercard<sup>®</sup>

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on PayPal’s secure website

Alternatives to the PayPal Cashback Mastercard

PayPal Extras MasterCard

If you prefer to earn credit card rewards in points instead of cash back, you can apply for PayPal’s other no-fee credit rewards option, the PayPal Extras MasterCard®. This card has a traditional points reward structure. It awards cardholders three times points on each dollar spent at gas stations and restaurants, double points on purchases made through PayPal or eBay, and one point per dollar spent everywhere else.

Unlike the cash back card, rewards earned on the PayPal Extras Mastercard expire® within two years if unused or if no purchases are made using the card for one year.

Citi® Double Cash Card

PayPal’s 2 percent Cashback Mastercard is only for PayPal account holders. If the benefits and 2 percent cash back upfront aren’t enough to rope you into creating a PayPal account, the Citi Double Cash Card® is a good alternative.

The card rewards 2 percent cash back on all purchases, but not all at once like PayPal’s Cashback Mastercard® does. Cardholders earn 1 percent cash back when they spend, and then 1 percent cash back when they pay, instead of awarding the entire 2 percent upfront. The Citi® Double Cash Card also omits an interest-free period for purchases and a sign-on bonus. However, it does offer a 0% introductory 18-month balance transfer.

PayPal Cashback Mastercard® FAQ

Cardholders receive 2 percent cash back on all eligible purchases made at Paypal.com, eBay.com and anywhere Mastercard is accepted using the PayPal Cashback Mastercard®.

No, cash back rewards don’t expire and can be redeemed to your PayPal balance at any time.

If you are unable to pay off your statement balance in full, you will be charged a variable interest rate of either 16.99%, 24.99% or 27.99% on purchases made in the billing period and be required to make a minimum payment.

Cardholders can redeem cash back by transferring the cash back balance to their PayPal account balance. The funds can then be used to make purchases anywhere PayPal is accepted or transfer money to peers using PayPal.

Use a cash back credit card that fits your day-to-day spending needs best, pay your bill in full each month, and spend only what you can afford to pay off.

The post PayPal Launches a 2% Cash Back Rewards Card: Double is the New Rewards Standard appeared first on MagnifyMoney.

QuicksilverOne Review: Unlimited 1.5% Cash Back for Average Credit

For people with “average” or “fair” credit, Capital One offers QuicksilverOne Rewards.Every credit card issuer has a different definition of what “average” or “fair” credit means. Generally speaking, it means a FICO score between 580 and 669.

The QuicksilverOne Rewards card gives you an unlimited 1.5% cash back, which is a pretty sweet opportunity for consumers with less-than-perfect credit.

Just beware of the two catches: There’s a $39 annual fee and a high purchase APR.

QuicksilverOne® Rewards from Capital One

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on Capital One’s secure website

QuicksilverOne® Rewards from Capital One

Annual fee
$39 For First Year
$39 Ongoing
Cashback Rate
up to 1.5%
APR
24.99%

Variable

Credit required
fair-credit

Average

QuicksilverOne Card Overview

The QuicksilverOne Rewards program is low maintenance.

Unlike other programs with revolving categories and spending caps, this card doesn’t hold you to either. You will earn 1.5% cash back every time you swipe.

You can redeem cash back at any time for a check, account credit, or gift card. Cash back you earn never expires.

What We Like About This Card

No fuss.

We like that the cash back program terms are uncomplicated. There are no preset bonus categories that you have to adapt your spending to each month. You can also redeem cash back at any time without having to wait for the balance to reach a certain threshold.

Low credit score requirement.

The QuicksilverOne is one of the only cash back rewards cards around town for average credit. If you’re having trouble getting approved elsewhere, this is a card you need to seriously consider.

What We Don’t Like About This Card

The annual fee.

Since this card costs $39 per year, you need to spend at least $2,600 per year (or $217 per month) for the cash back to break even with the fee. Ideally, you’ll want to spend more than just the bare minimum for the rewards card to be worthwhile.

High APR.

This is a high interest rate. Avoid carrying a balance at all costs if you choose this card.

Who This Card Is Best For

Again, the QuicksilverOne is our top unlimited cash back pick for consumers who have trouble getting approved for other cash back cards.

According to Capital One, you may qualify for this card if:

  • You have defaulted on a loan in the past five years
  • You have limited credit history
  • You have had your own credit card or other credit for less than three years (this may include students, people new to the U.S., or authorized users on someone else’s credit card)

Keep in mind, these are just guidelines to give you a general sense of whether you’ll qualify. Your income, debt, and other credit limits are also factors used to make a decision.

Capital One has a nice feature where you can get preapproved online for offers without a hard credit inquiry. See if you prequalify for the QuicksilverOne card here.

Keep an eye out for the Quicksilver alternative while checking offers as well.

Quicksilver Rewards is the “big brother” of the QuicksilverOne card. It has no annual fee, and it’s for people with excellent credit. There’s no harm in checking to see if you prequalify for the Quicksilver card.

Is the QuicksilverOne card good for rebuilding credit?

Despite the lenient qualifying criteria, the QuicksilverOne card is not our top recommendation if you’re rebuilding credit, because of the annual fee.

Your focus should be keeping your credit utilization very low when rebuilding credit. You shouldn’t worry about having to earn enough cash back each month to cover a card’s annual fee.

Try a no-fee secured card like the Capital One Secured MasterCard or the Discover it Secured Credit Card instead.

QuicksilverOne Credit Card Benefits

QuicksilverOne offers:

  • Travel accident insurance and 24/7 roadside assistance. Travel insurance for death or loss of limbs. You can call in for help if your car breaks down.
  • Auto rental insurance. Insurance covers rental damage from collision or theft.
  • Extended warranty. Purchases made on your card will get an extended warranty.
  • Price protection. You can get reimbursed the difference if you find items you purchased on sale within 60 days.
  • Fraud coverage. Covered by $0 fraud liability if your card is lost or stolen.

Alternatives to the QuicksilverOne

QuicksilverOne doesn’t have much competition since it’s the best card for consumers with average credit. The following no-fee cash back cards officially require good to excellent credit but allow you to prequalify without a hard inquiry.

1.5% cash back, no fee

Chase Freedom Unlimited<sup>SM</sup>

Annual fee

$0 For First Year

$0 Ongoing

Cashback Rate

1.5%

APR

14.24%-23.24%

The Chase Freedom Unlimited card gives you an unlimited 1.5% cash back on all spending without category restrictions or caps. What’s great about Chase is it’s another credit card issuer that lets you prequalify for offers without a hard pull. Check out offers you may prequalify for here.

You can redeem cash back from your Chase Freedom Unlimited card at any time, and cash back never expires as long as you keep your account open. At times there is an intro APR deal or cash back bonus offer that add benefits to this card, and ongoing rates are sometimes lower than what you’d see on the QuicksilverOne.

Double cash back, no fee

Citi®Double Cash Card

Annual fee

$0 For First Year

$0 Ongoing

Cashback Rate

1% when you buy, 1% when you pay

APR

14.49%-24.49%

Variable

The Citi Double Cash card is another good choice for low-maintenance cash back rewards. It gives double cash back on all purchases. You earn 1% cash back when you spend on the card and another 1% cash back when you pay off the bill.

This is a card that members report qualifying for with a credit score in the high 600s. Citi lets you shop for prequalified offers on the website as well. If you’re interested in this card, see if you can get prequalified here. In addition, there are changing intro APR deals for this card that allow you to save interest early on, and ongoing interest rates are sometimes lower than with the QuicksilverOne.

Bottom Line

The QuicksilverOne Rewards is a good rewards card for those with average credit. If you have had difficulty being approved for other higher cash back rewards cards, you may be approved for the QuicksilverOne Rewards, which offers unlimited 1.5% cash back. Be aware that this card comes with an annual fee and high APR, so make sure to do your research and see if this card is right for you.

FAQ

You should not keep a balance on this credit card to benefit from the cash back. The high APR is a large amount of interest to be paying on purchases. If the interest charges you experience on this card coupled with the annual fee surpass the cash back you earn, this card is pointless.

No. You’re free and clear to spend money on anything, and it’ll earn 1.5% cash back. This is the beauty of an unlimited cash back card. However, cash advances and balance transfers will not qualify for cash back.

No, you can redeem cash back for any amount at any time.

No, cash back does not expire as long as your account remains open.

You can, but not with average credit. The QuicksilverOne card is the best unlimited cash back card there is specifically targeting people with fair credit. Another option you have is working to improve your credit first before applying for a credit card to qualify for a card that gives you more cash back.

The post QuicksilverOne Review: Unlimited 1.5% Cash Back for Average Credit appeared first on MagnifyMoney.

Review: PenFed Launches 1.5% – 2% Power Cash Rewards Credit Card

PenFed, a credit union that anyone can join (more on that later) has just introduced a new cash back rewards credit card. The card pays a high, flat cash back rate and brings a credit union approach to fees (low and not many of them) and simplicity. Here are the details on the cash back that you can earn:

  • Anyone with military service earns 2% cash back on all spending, with no limits or restrictions. That is the highest flat cash back rate in the market.
  • Anyone with a PenFed checking account (restrictions apply) earns 2% cash back on all spending, with no limits or restrictions. (If you keep $500 in the checking account, there is no fee and you earn 0.20% APY on the money).
  • If you do not have military service or a checking account, you can earn 1.5% unlimited cash back. At 1.5%, the card matches Chase Freedom Unlimited or Capital One Quicksilver, but it is still beat by Citibank’s Double Cash.
  • There is a minimum redemption amount of $5 for the cash back that you have earned.
  • There is a bonus offer: get $100 of cash if you spend $1,500 during the first 90 days.

In addition to the cash back, here are some additional features:

  • Chip with pin functionality: if you travel overseas, you might find chip + signature limiting. For example, trying to use a card with only signature functionality at kiosks across Europe (like the London Underground) can be challenging.
  • No annual fee and no foreign transaction fee.
  • Variable APR range of 9.24% – 17.99%. If you have excellent credit, the lowest APR at Citi (on the Double Cash product) is 13.49%. For people who revolve occasionally, this could be a better option. (Although our advice remains to pay your balance in full and on time. If you need to borrow money, personal loans and balance transfers remain cheaper options).

Our Verdict

Best Cash Back Credit Card for Military: 2% is the gold standard for a flat rate cash back credit card, and PenFed delivers for men and women who have served. This is better than any competing flat-rate cash back credit cards because of the lower APR and lack of foreign transaction fees.

Best Cash Back Credit Card for Spending Abroad: If you use Citi Double Cash, you would be hit with a foreign transaction fee of 3%. So, you would earn 2% but be forced to pay 3% in fees. Before this card, Capital One Quicksilver was our top choice because of a 1.5% earn rate and no foreign transaction fees. PenFed’s card now wins because (a) if you put $500 into a PenFed checking account you can earn 2% on this card, and (b) the card offers chip and pin functionality. If you spend $1,000 overseas this year, you would pay $10 to Citi, (2% cash back – 3% fees = -1%), would earn $15 with Capital One and would earn $20 with PenFed.

Tie: Best Flat-Rate Cash Back Credit Card: With both Citi Double Cash and PenFed you can earn up to 2%. Each card has its own unique differences, which is why they are tied for best flat-rate card in the market.

  • PenFed: You need to join the credit union, open a checking account and fund the account with $500 (or sign up for direct deposit) to ensure you get the full 2% and avoid fees. Financially it will make sense, but there are a number of obstacles to get the full rewards (unless you are military).
  • Citi Double Cash: It is easy to apply and get the card (no credit union membership or Citi checking account required). However, the card is actually 1% as you earn and 1% as you pay, so it takes longer to get the full 2%. The interest rates are higher and there is a foreign transaction fee.

There are still options to earn higher cash back rates in certain categories. You can find the best cash back credit cards by every category here. For example, you can earn 5% unlimited on gas with Fort Knox Credit Union or 6% (with limitations) on groceries at American Express.

If you want to learn more or apply, you can visit PenFed’s website.

LearnMore

Requirements To Earn 2%

Here are the details on how to ensure you get the full 2% earn rate:

Military: You are eligible to earn 2% if the primary or joint applicant is in military service, the National Guard, the Reserves, an honorary discharged veteran or retired from the United States military. Military members receive the 2% upon completion of the application – no further action is required.

Checking Account: If you do not meet the military requirements, you would need to open a checking account with PenFed. The account is called the “AccessAmerica Checking Account.” There are some decent benefits to the account (you can earn 0.20% APY interest on balances up to $20,000 and 0.50% APY on balances between $20,000 and $50,000). If you shift your monthly direct deposit of at least $500 to this account, you will not have a monthly fee. However, if you do not want to shift your direct deposit, you can deposit $500 and keep it there to meet the required minimum balance. This is actually the easiest way to earn the 2%, cash back rate and, given the 0.20% interest on the checking account, it can be financially worthwhile.

Join the Credit Union: There are multiple ways to join the credit union. If you are active or retired military, you are eligible to join for free. If you work for the US government or are a relative of a member, you can also join for free. But don’t worry if you are unable to meet those requirements. You might belong to an eligible organization (check here). You can also join an organization to become eligible for credit union membership. You can pay $17.00 (one time and non-refundable) to join Voices for America’s Troops or the National Military Family Association. By supporting a good cause, you become eligible for credit union membership. In addition to the credit card, PenFed is known for low rates on auto loans and mortgages.

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