How PayPal Cards Work – All You Need to Know


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If you use PayPal for online payments or to send and receive money, then you must have heard of PayPal cards. 

PayPal offers its customers several credit and debit cards. For instance, the PayPal MasterCard is a credit card, while the PayPal reward card is a credit card offering reward points for dollars spent.    

So, how does a PayPal card work and which one of the many cards should you get?

Whether you’re interested in knowing how to use a PayPal card or what is a PayPal debit card, you’re in luck.

In this article, we explain how to use each of the PayPal cards and also answer common PayPal cards questions such as how does PayPal debit card work?

how does a PayPal card work

PayPal Credit Cards

PayPal has two credit cards for its customers, the PayPal Cashback MasterCard and the PayPal Extras MasterCard

The PayPal Cashback MasterCard 

This is the perfect credit card for occasional shoppers who are looking for a simple credit card that doesn’t have unusual reward features.

This card supports a flat reward system where users can earn 3% unlimited cash back when they shop with PayPal and 2% cash back when they shop outside PayPal.

Also, this card doesn’t have an annual fee, and it offers a competitive APR of between 15.24% and 27.24%.

Besides, the PayPal Cashback MasterCard offers added convenience as it’s accepted almost everywhere.

The only drawback of this credit card is that it’s not yet available to new cardholders. You also need to have a PayPal account to enjoy the perks that come with this card.

The PayPal Extras MasterCard

This credit card is perfect for frequent shoppers of gas and dining and those who love to shop in popular areas such as eBay.

This card earns you 3 points for every $1 spent on dining and gas, 2 points for every $1 you spend on eBay and PayPal, and one point for every $1 you spend on other buys. 

You can redeem this card’s accumulated points for non-cash items, such as:

  • Gift cards for retail, gas, and restaurants after accumulating at least 800 points
  • Merchandise such as sports, electronic and household items after accumulating at least 3,000 points
  • Plane ticket, car rentals and hotel stay travel vouchers if you have at least 15,000 points

To get cash back with this credit card, you have to have accumulated at least 6,000 points

Again, this card has no annual fee, and it can be used anywhere where MasterCard is accepted. The APR for this card ranges between 14.99% and 26.99% in line with your credit rating. Late payments attract a $40 fee, and the minimum credit line you get with this card is $250. 

Just like the PayPal Cashback MasterCard, you need an active PayPal account to apply for this credit card. 

PayPal Credit

PayPal also offers PayPal Credit, a credit line available to its users. The PayPal credit line is also a payment method offered by numerous stores that accept PayPal.

PayPal Credit gives its users six months to complete payments on purchases of $99 or higher. If you miss a payment, be prepared to part with a $40 late payment fee.

Also, the purchase APR for this credit option is slightly higher at 23.99%.

PayPal Debit and Prepaid Cards

The available PayPal debit and prepaid cards are explained below.

PayPal Cash Card

This is a prepaid card that is perfect for shoppers who want to control their spending. Once you load this card with money, you can use it for online purchases or to send and receive money.

One of the advantages of this card is that it doesn’t have hidden fees. This card is also backed by the MasterCard Zero Liability policy and FDIC insurance, which protects your money if your card is lost or if there are problems with PayPal management.

This card has no annual fees, but it does have an ATM withdrawal fee of $2.50 and over-the-counter withdrawals at financial institutions also attract a $3 fee. If you use it for foreign transactions, you’ll have to pay a 2.5% fee and there is also a cash reload service fee of up to $4.95.   

PayPal Business Debit Card

The PayPal business debit card is for business owners who wish to take care of their daily expenses through PayPal. 

You can use this card to make payments, withdraw cash from ATMs, and send and receive money. This card offers 1% cash back on all eligible transactions you make through PayPal, and it doesn’t attract an annual fee.

However, it does have the below fees:

  • ATM domestic withdrawal fee of $1.50 for each withdrawal made in the US
  • A $3.00 teller-assisted withdrawal fee
  • ATM international withdrawal fee of $1.50 per withdrawal
  • Foreign transaction fees of 1% on the purchase amount made from a non-US merchant and 1% of the withdrawal amount made at a non-US ATM

PayPal Prepaid MasterCard

The PayPal Prepaid MasterCard offers free money transfers from your PayPal account and cash back rewards.

This card despite its flexibility has its cons as it attracts a $4.95 monthly fee. If you use it for ATM withdrawal, it will cost you $2.50 in addition to the ATM operator fee. Using it to access funds over the counter also attracts a $3 fee. 

What Is the PayPal Rewards Card?

What Is the PayPal Rewards Card

The PayPal reward card offers reward points every time you make an eligible purchase.

One of the features that sets this reward card apart is that it doesn’t limit where you can spend your reward points. This means you can redeem your points at thousands of eligible physical and online stores globally.

What Are the Key Features of the PayPal Rewards Card?

The PayPal rewards card has two types of cash reward options.

The first one is Pay with Rewards where you redeem 2000 points for $10 worth of shopping. The second cash reward option is where you redeem 2,000 points to get $7 off on any eligible purchase made through the PayPal reward card account.

Also, if you spend $3000 on an eligible purchase within the first month of this card approval, you get 50,000 bonus points which are equivalent to $275.

Other notable features of the PayPal reward card include:

  • Unlimited reward points
  • No annual fee
  • Users earn1 point for every$1 spent on eligible transactions
  • The digital card is linked to your PayPal wallet
  • You can add up to 4 more cardholders to your card
  • Has three installment plans including transaction, statement and cash installment plans
  • A minimum credit limit of $4000
  • The card attracts a $30 late payment fee if you’re late paying your credit card statement
  • Has a cash advance rate of 21.74%
  • Has a retail purchase rate of 20.99%

Other Details about the PayPal Cards

For you to access any of the PayPal cards discussed above, you need to have an active PayPal account, as these cards link to your account. You also need to have a good credit card score to get any of the two PayPal credit cards.

To get any of the PayPal cards, send an online request to PayPal. The prepaid card can also be bought from specified retail locations.


PayPal is one of the most popular online payment platforms. If you prefer to make payments using credit, prepaid, or debit cards, then PayPal has got you covered. 

Hopefully, from this article, you now understand the different PayPal debit, credit, prepaid and reward cards and how they work.

Now go on and make an informed decision on the best PayPal card for you or your business needs.