What is the PayPal Rewards Card and how does it work?

What is the PayPal Rewards Card, and what makes it different from other types of credit cards on the market?

The PayPal Rewards Card arrived on the Australian credit card market in 2021, from the online payments giant PayPal. It offers a unique proposition if you are considering a credit card, thanks to several key features that distinguish it.

What is the PayPal Rewards Card and how does it work?

The PayPal Rewards Card is a credit card that offers reward points in exchange for purchases, but unlike other rewards credit cards, you are not limited in where you can spend your points. This means that, unlike some credit cards which might require you to spend your points with a certain few partner companies, you can redeem your points at more than 750,000 eligible businesses around the world. This also includes approximately 300,000 businesses in Australia.

While the PayPal rewards card comes in the form of a physical credit card, it is also digitally linked to your PayPal digital wallet as soon as your application is approved. This means that you can start making purchases on it instantly before your physical card arrives in the mail.

What are the key features of the PayPal Rewards Card?

The key features of the PayPal rewards cards include:

• uncapped rewards points, with cardholders earning one point for every $1 spend on eligible transactions (2,000 points is equivalent to $11 to spend)
• $0 annual credit card fee
• 0% interest for 20 months on balance transfers, then reverts to cash advance rate
• ability to add up to four additional cardholders at no extra cost
• $4,000 minimum credit limit
• 20.99% retail purchase rate
• 21.74% cash advance rate
• up to 55 days interest free on retail purchases
• instalment payment plan options
• digital card linked to your PayPal wallet
• 50,000 bonus points (equivalent to $275) to spend when you spend $3,000 in the first three months from card approval on eligible transactions.

Compare credit cards

What are the PayPal Rewards Card instalment plans?

The PayPal Rewards card has three different instalment payment plan options. These are:

1. Transaction Instalment Plan: Convert a retail purchase of $50 or more that’s yet to appear on a statement and repay it in monthly instalments at a fixed rate over a set term.
2. Statement Instalment Plan: Convert your retail purchase balance from $500 on your latest statement into monthly instalments at a fixed rate, and repay them over a set term.
3. Cash Instalment Plan: Access funds from $500 up to your available credit limit and repay it in monthly instalments at a fixed rate over a set term.

What do consumers need to be wary of?

If you are considering applying for a PayPal Rewards Card, there are some things that you may wish to keep in mind, including:

• If the card’s initial 0% balance transfer rate is appealing, bear in mind that this offer only lasts for 20 months, after which the balance transfer rate jumps to a relatively high 21.74%, using rates and timeframes applicable at the time of writing. If you are paying off a balance transfer and are unable to do it in 20 months or the time that’s agreed with a provider for a particular balance transfer credit card, you may find that the interest rate is higher than on your original credit card. MoneySmart advises consumers to be realistic about what they can afford to pay off when contemplating a balance transfer to a new credit card.
• It is always important to try to pay your credit card statement on time. The PayPal Rewards Card comes with a $30 late payment fee, so you will need to make sure you have made your required repayment each statement period to avoid this.
• There is a 3.4% foreign exchange margin on all international purchases for this card at the time of writing. This rate is particularly important  if you are a frequent online shopper making purchases from overseas.

This list is not exhuastive. Take the time to read the fine print when you apply for any credit card, including the PayPal Rewards Card. Consider if applying for a credit card is right for you. The Target Market Determination (TMD) can help you better understand this product and its target audience. A Key Facts Sheet is also available.

What are the eligibility requirements for a PayPal Rewards Card?

According to PayPal, you must be 18 years or older and a permanent Australian resident to apply for a card. You must earn more than $35,000 per year and must have a personal PayPal account. You must have an Australian mobile number and valid email address.

PayPal says that it may also ask you to provide identification (e.g. a driver licence or passport), as well as recent financial documents (such as payslips or bank statements) and details of your income, assets, debts and expenses.

Compare Credit Cards with Canstar

The table below displays some of our referral partners’ rewards credit cards for Australian’s spending around $3000/month and redeeming points for cash/vouchers. The results shown are sorted by highest star rating, then alphabetically by provider name. Use Canstar’s credit cards comparison selector to view a wider range of credit cards. Canstar may earn a fee for referrals.

Cover image source: salarko/Shutterstock.com.