PayPal Debit Card vs. PayPal Credit Card – What's the Difference?

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PayPal is "the world's most loved way to pay and get paid." At least, that's what it tells me every time I log into my account. I never really got to vote on that, but perhaps I'll leave that rant for another article. Right now, I'm focused on the PayPal Business Debit Card and the PayPal Extras MasterCard.

I make my living on the internet, and every single client I have pays me through PayPal. Without it, I'm out on the streets – or at minimum, I'm left to find a new way to make money. Needless to say, having a PayPal card of some sort is a little bit important to me. I have personally used both the credit card and the debit card for PayPal countless time over, and one of them I use every day. This article will explain why I choose one over the other.

Here's a look at the differences between the PayPal debit card and the PayPal credit card so you can decide if either is right for you.

How the PayPal Business Debit Card Works

PayPal Business Debit CardThe basis of the PayPal debit card is pretty simple. Any money that is available in your PayPal account is instantly available on the card. Every time you make a charge on the card, the money comes out of your PayPal balance. This is just like a standard bank debit card, only the money is coming from the internet (sort of). I'm sure there's a giant Bank of PayPal in the world that has all of this cyber money stored away under massive supervision, but as far as I know, the money sits online and gets withdrawn from there, through the use of this card or otherwise.

How the PayPal Extras Credit Card Works

PayPal Extras Credit CardPayPal Extras was made to be more like a traditional credit card. Backed by MasterCard, this option provides a spending limit that is unrelated to your PayPal account, along with cash back bonuses and all the support you would expect with a MasterCard. You get 3 cash back points for every dollar spent on gas and restaurants, 2 points for PayPal and eBay, and 1 point for everything else. Once the points start racking up, you can convert them into money for your PayPal balance, or you can use them for travel deals and special purchases.

Key Differences

The PayPal Business Debit Card is essentially a prepaid card because you determine how high its balance is. The PayPal Extras MasterCard is an actual credit card, with a limit set based on your credit score and application. Both are run through PayPal and MasterCard, so they both have the same support system in the end. The main differences lie in how they operate.


Paypal Credit Card vs PayPal Cebit Card


With the debit card, you have access to all of the money that you have in PayPal. With the credit card, you have a spending limit that you have to pay back. The only association it has with your PayPal account is in the way you can convert your cash back points, or the way you view your card info online.

Neither card has an annual fee, but the credit card has an APR of 19.99% to 23.99%, depending on the applicant. The credit card also has a $5 minimum cash advance fee, but the debit card has no ATM charges. However, the debit card has a $400 ATM withdrawal limit per day. The credit card's limit is based on your available balance.

You can avoid most or all of the fees associated with the PayPal credit card by paying your balance off in time and minimizing cash advances and balance transfers. PayPal's credit card still offers low or similar rates when compared to other credit cards, but it is more costly than the debit version. With this in mind, the debit card won't help you if you need extra money for a big purchase. The credit card will.

What Is the Best PayPal Card?

I use the PayPal Business Debit Card every day, ratherBest PayPal Card than the Extras MasterCard. This is because I don't need extra money and rewards. All I need is access to my earnings. My situation may not fit yours at all though, so you have to assess each card's features to determine what will actually work for you. The credit card just doesn't appeal to me.

If you don't get paid online or you don't ever have money in your PayPal account, having a debit card will be relatively pointless. You'll have to put money into the account every time you want to use it, and you won't get any credit for the things you pay for. If you do get paid online, having a debit card will save you from having to wait two to three business days to transfer money into your bank. You can instantly use the money deposited into your account, saving you time, stress, and hassle in the long run.

Now that you know what the differences are between the PayPal credit card and the PayPal debit card, you can figure out which one you want to apply for – if any. Think about how you get paid and what you need a card for, and then apply for the one you need most.

*Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.

*The content in this article is accurate at the publishing date, and may be subject to changes per the card issuer.

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