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PayPal Debit Card Review (2024): Earn Stackable 5% Cash Back
In recent weeks, PayPal debuted an updated debit card product (perhaps you’ve seen the incessant Will Ferrell commercials for it during football games?). With the launch of this card, the company known for online payments is encouraging customers to pay with them anywhere. To encourage such behavior, the debit card allows cardholders to earn 5% cashback — although, as you can imagine, there are some important restrictions on that.
So, what does the fresh PayPal Debit Card offer and can you stack up cashback with it? Let’s take a look at what you need to know about the card, including my personal experience with it so far.
PayPal Debit Card Review
PayPal Debit Card: A Nice (But Limited) Cashback Tool
4
5% cashback category options
Restaurants, Clothing, Health and Beauty, Grocery, Gas
Redemption options
Cashback (added to balance), use at checkout, or donate
Physical or digital card?
Digital by default, physical available upon request
With the PayPal Debit Card, you can earn 5% cashback in one of five selected categories. Moreover, this rate is stackable with various online offers. However, not only will you need to reselect a category each month to earn but this 5% back is capped at $1,000 in spending. Plus, aside from offers, there’s no other cash earned on non-category purchases. For that reason, while the PayPal Debit Card is great if you’re willing to use it in a targeted manner, it’s definitely not a card you’ll want to use across the board.
Pros
- Earn 5% cashback in a selected eligible category
- Stack that cashback with brand-specific online offers
- Card is linked to your PayPal balance
- Redemption start at just 1 point
Cons
- Only 5 eligible categories to choose from
- Selections are locked in for the month and must be renewed each month
- Other purchases don’t earn cashback
PayPal Debit Card Review: How to Earn 5% Cashback (or More)
Opening a card
If you already have a PayPal account, generating a debit card is quite simple. In you’re account, you should see an option to set up your PayPal Debit Card. To get started, you’ll need to confirm your phone number and agree to the terms.
When you do set up your card, you’ll be able to choose your first 5% back category and then select your auto reload preferences — both of which we’ll talk about in a moment. From there, you can also choose to add your debit card to a mobile wallet. In my case, this was Apple Pay, although Google Pay and Samsung Pay are also supported.
Finally, you’ll need to create a PIN for your new card. Once that’s done, you’ll be all set to start using your card and earning.
It should be noted that the PayPal debit card doesn’t charge any monthly fees and there’s no minimum balance requirement. However, if you use your card abroad, a 2.5% foreign transaction fee may apply.
Requesting a physical card
As I mentioned, when you open your PayPal Debit Card, you’ll immediately be able to use a digital version. In fact, this will be the default way to utilize the card going forward. However, should you prefer a physical version, you are able to request one in the app.
To get your physical debit card, you’ll just need to confirm your shipping address. Then, PayPal will email you once your card ships.
I went ahead and requested a physical card just to see how the process worked — and my card arrived about a week later. It even had a fun little PayPal logo seal on it. From there, activating the card was quite simple as it just required me to confirm the security code in the app. And with that, I can now use my physical card.
Funding and auto reload
What’s cool about the PayPal Debit Card is that it gives you easy access to your PayPal balance. But, what happens if you don’t have any funds left in your account? That’s where your auto reload settings can come in handy.
When I first set up my card, PayPal also recommended setting up a Low balance reload. Specifically, the default was set to load $300 if the balance went below $100. That’s pretty ambitious of them, honestly, but you can easily adjust those or skip this step.
There are a couple of different auto reload options: Low balance reload and Scheduled reload. Starting with the former, you can arrange to have PayPal automatically add funds from an external funding source when your balance falls below a selected threshold. For example, I have mine set to $25 (which also happens to be the lowest option available). With this option, you’ll also choose how much you want to add when your balance does dip below that threshold. Once again, the minimum here is $25.
The other auto reload option is Scheduled reloads. Just as it sounds, this just means that you can set up recurring deposits. In terms of frequency, you can choose to do it weekly, every 2 weeks, or monthly. Furthermore, you can select the day of the week or date of the month you want these transfers to happen.
Of course, there are plenty of other one-off and recurring ways to fund your PayPal account and, in turn, your PayPal Debit Card. These include:
- Another debit card (transfers in seconds)
- Bank transfer (takes 3-5 days)
- Direct deposits (payroll funds available up to 2 days early)
- Cash deposits at participating stores (CVS, 7-Eleven, Wal-Mart, etc.)
- Mobile check deposit
Earning 5% back and category options
As promised, the PayPal Debit Card does allow you to earn 5% back on purchases. However, to be clear, this doesn’t mean 5% back on everything. Instead, you’ll first need to select one of five spending categories you’d like to earn this rate on. Current options include:
- Restaurants
- Clothing
- Health and beauty
- Grocery
- Gas
The good news is that you can change your selected category each month. That said, once you make your choice, you will be locked into that selection until the first of the next month. On top of that, you’ll need to make a selection each month. This means that, even if you plan to keep the same category as the previous month, you’ll need to reactivate it in order to earn cashback. To their credit, PayPal did send me an email on the first of the month to remind me to select my category — but I’d recommend setting your own reminder if you want to make the most of the card.
Alas, the restrictions don’t end there either. As noted in the terms, this 5% cashback rate is capped at $1,000 in spending per month. So, if you max out this benefit, that’s $50 a month in cashback.
Stacking with other offers
Another interesting aspect of the updated PayPal Debit Card and its marketing is that it also features stackable offers. This means that cardholders can activate merchant cashback deals and, if they happen to fall into the same category as their 5% back selection, then they can earn the stated cashback on top of their debit card rewards. Some current offers (as of this writing on October 1st, 2024) include 10% back at McDonald’s 20% back on Uber/Uber Eats, 5% back at Walmart, 5% back at Best Buy, and many more. Be aware, however, that all of these offers are online only. Additionally, you’ll need to save eligible offers to your account in order to use them.
For my first month of using the PayPal Debit Card, I selected Restaurants as my 5% category. And, to be honest, I really couldn’t have asked for a better stackable offer to pair this deal up with: 5% back at Starbucks (online only, of course). Since Starbucks is indeed a restaurant, this 5% was available with the 5% debit card cashback. However, as I discovered after my first attempt, simply using my debit card to reload my Starbucks card wasn’t enough to trigger this offer (although that purchase did still earn the 5% back from the card itself). Instead, I needed to select the PayPal option for the reload. After doing this, I did manage to earn 5% back from the offer and 5% from the card.
By the way, the directions to check out with PayPal were clearly stated in the offer details — I just failed to read it. So, let this serve as a reminder to give the details a quick look to ensure that your stacking opportunity goes as planned.
Now that I’m in my second month as a cardholder, I chose Clothing as my 5% category just to see what types of stackable offers would be available. In this case, some of the double dipping opportunities presented to me included 5% at Walmart, 5% at Nordstrom/Nordstrom Rack, 5% at Adidas, 6% at J. Crew, and more.
Using your rewards
It should be noted that the cashback you earn with the 5% debit card deals and stackable offers are issued in the form of points. For the most part, these points are worth 1¢ each (but we’ll talk about an exception later). So, my 225 points can be redeemed for $2.25 in cash.
There are currently three options for redemptions:
- Cashback
- Use points at checkout
- Donate
For the “regular” cashback option, you can simply select how many points you want to redeem. The cash value of these points will then show up in your balance almost immediately after submitting your request. What’s also nice is that redemptions start at just 1 point.
Next, there’s the option to redeem points at checkout. When shopping online and using PayPal to check out, you can select the “Pay with Rewards” feature to apply your points.
If you’re feeling generous, there’s also the opportunity to donate your points. From what I’ve seen, there are regularly five options — although they appear to rotate as they changed between when I checked in September versus October.
Once you select your charity, the interface looks very similar to the regular cashback request. But, there’s one big difference you’ll notice: the value of your points. When you choose to donate your point, rather than being worth 1¢ each, they’ll gain 25% (so 1.25¢ each). As a result, you can turn your 1,000 points into a $12.50 donation to a good cause — which I think is pretty awesome. By the way, if you opt into it, PayPal will share your name and email with the charity so that they can contact you.
ATM access
Finally, with the PayPal Debit Card, you’ll enjoy fee-free access to more than 24,000 ATMs via the MoneyPass network. To find such a machine, select your debit card in the PayPal app and tap “Find an ATM.” Well, this should allow you to find an ATM but, in my experience, the map isn’t working — and I have to believe there are MoneyPass ATMs in my area so I’m not sure what the issue is.
In any case, your PayPal Debit Card will still work at other ATMs as well, although fees may apply.
Final Thoughts on the PayPal Debit Card
With the ability to earn 5% cashback in some very usable categories, opening a free PayPal Debit Card is pretty much a no-brainer in my opinion. Sure, there are plenty of restrictions you’ll contend with, but I still think this is an easy way to earn extra cashback — especially if you’re able to take advantage of stackable deals from the likes of Starbucks, Walmart, McDonald’s, and more.
All in all, although I don’t expect to use PayPal “everywhere” as they would hope, I do intend to use my new PayPal Debit Card strategically going forward. In particular, I feel as though the Restaurants option will be good for occasional fast food orders or, apparently, Starbucks reloads. That said, it’s also nice that you can adjust your cashback monthly. That way, if you know you have a road trip coming up or have some clothes shopping to do, you can change your monthly selection to Gas or Clothing respectively.
While it remains to be seen if this 5% + stackable deals ploy can last, for now, I’m looking forward to making the most of the PayPal Debit card and think it’s worth trying out for yourself as well.
Author
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