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This article was last updated Oct 09, 2017, but some terms and conditions may have changed or are no longer available. For the most accurate and up to date information please consult the terms and conditions found on the issuer website.
PayPal is "the world's most loved way to pay and get paid." If you're a loyal PayPal user, or a business owner who depends on their payment processing services, you may have noticed their unique credit and debit card offerings. The PayPal Business Debit MasterCard® and the PayPal Extras MasterCard® are two popular pieces of plastic that are available for consumers. 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
The 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 This is just like a standard bank debit card, only the money is is withdrawn from the PayPal account registered to your business instead of your business bank account. The PayPal Business Debit Card is processed by MasterCard so you should be able to use it anywhere that accepts MasterCard.
One unique feature that sets the Paypal Business Debit MasterCard apart from most other debit cards is that you have the opportunity to earn rewards on your purchases. After you enroll in the cash back program, you can earn 1% cash back on certain eligible transactions. These include purchases from online merchants and all transactions you sign for.
How the PayPal Extras Credit Card Works
PayPal Extras was made to be more like a traditional credit card. This card is issued by Synchrony Bank and spending limit will be based on your creditworthiness; it's unrelated to your actual PayPal account. Unlike the Paypal Business Debit Card, the PayPal Extras Credit card comes with a rewards program that earn you points with every dollar you spend. Cardholders will earn 3x points per dollar at gas stations and restaurants, 2x points on all Paypal & eBay transactions, and 1x points on all other purchases. Your points can be redeemed for PayPal Cash, gift cards, merchandise, or travel, but be sure to check out the terms and conditions of the rewards program because it can be a little complicated. It's also important to note that cardholders are limited to earning a total of 50,000 rewards points per year.
The PayPal Business Debit Card is essentially a prepaid debit card because you you can add funds to your PayPal account whenever you need to be able to access more money on your debit card. The PayPal Extras MasterCard is an actual credit card, with a limit set based on your credit score and application; this means that it will help you build credit when used responsibly. Here is a quick visual comparison of the two offerings:
The differences between the PayPal Extras MasterCard and the PayPal Business Debit Card really come down to the normal differences between debit cards and credit cards. 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. While it's nice to be able to earn rewards on your purchases, using the PayPal Extras MasterCard also comes with the inherent risk of being charged interest when you carry a balance. The APR is pretty high, so it would be best to only make purchases that you know you can pay off in full at the end of the month.
Another difference to consider is security. If the info to your Paypal Business Debit MasterCard is compromised, you could have your account balance wiped out overnight and there would be little you could do about it. But with a credit card, you may not be liable for fraudulent charges since it's not technically you're money.
What Is the Best PayPal Card?
Deciding which PayPal Card is best for you will really depend on your specific situation and how you intend to use the card. If you're a business owner that uses PayPal as your standard operating account, then the PayPal Business Debit MasterCard is a convenient way to access your money and earn cash back on some of your purchases. If you're a frequent spender with PayPal or love to shop on eBay, then the PayPal Extras Credit Card can help you earn a lot of rewards – this is especially true if you also spend a lot on gas and dining out.
While both cards come with their own unique perks and benefits, you may find that neither of them are the right fit for the card you're looking for. If you're not sold on the PayPal Busines Debit MasterCard or the PayPal Extras Credit Card here are a few similar credit cards that offer better perks and rewards.
Better Options than the PayPal Cards
Chase Freedom Unlimited®: Instead of extra earning rewards in certain bonus categories like the PayPal cards, the Chase Freedom Unlimited® offers a unlimited 1.5% cash back on every purchase. As the name implies, there is no limit to the amount of cash back you can earn and you can also redeem your cash back for any amount at any time. There's no annual fee with this card and you can also earn a $150 bonus after you spend $500 on purchases in your first 3 months from account opening.
Discover it® Cashback Match™: This unique credit card comes with 5% cash back at different places each quarter like gas stations, grocery stores, restaurants, Amazon.com, or wholesale clubs up to the quarterly maximum each time you activate. 1% unlimited cash back automatically on all other purchases. If you like the bonus categories of the PayPal Extras Credit Card, then you'll love this card too because the bonus categories include gas, restaurants, Amazon.com and more. As a welcome bonus for new cardmembers, Discover will automatically match all the cash back you earn at the end of your first year.*
Bank of America® Business Advantage Cash Rewards Mastercard® credit card: For business owners looking for an everyday card for making purchases and earning rewards, look no further than the Bank of America® Business Advantage Cash Rewards Mastercard® credit card. There's no annual fee with this card and it comes with a great cash back program. Cardholders earn 3% cash back on purchases at gas stations and office supply stores (up to $250,000 each calendar year, 1% after that), 2% cash back on purchases at restaurants, 1% cash back on all other purchases. You'll also receive a $200 statement credit when you make at least $500 in net purchases within 60 days of your account opening.!
*Editorial Note: This content is not provided or commissioned by the credit card issuer. 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 the credit card issuer. This site may be compensated through the credit card issuer Affiliate Program.
*The content in this article is accurate at the publishing date, and may be subject to changes per the card issuer.