PayPal Cashback Mastercard will no longer offer 2% cash back

The Synchrony Bank-backed cash back credit card soon will reduce the earnings potential of its rewards structure. PayPal recently notified existing cardholders that a reduction of cash back benefits is coming later in 2024.

And, though it has become one of Team Clark’s favorite cards for online shopping thanks to 3% cash back on purchases made via PayPal, it soon will no longer qualify for our list of 2% cash back credit cards.

The premise of the PayPal Cashback Mastercard is pretty simple: Unlimited 3% cash back on purchases made with the card via PayPal and unlimited 2% cash back on all other purchases. No annual fee.

But according to an email distributed to cardholders in late May, the 2% cash back benefit will soon be a thing of the past.

Effective Aug. 1, purchases made using your card (but not through PayPal checkout) will be reduced to unlimited 1.5% cash back.

The 3% back on purchases made through PayPal will remain unaltered.

Here’s a look at the modified cash back earnings that was distributed to customers via email in May:

3%: Each Eligible Purchase made by you through your PayPal account (online or in-store), or when you send money to other PayPal users through your PayPal account will earn 3% Cash Rewards.

2%: Each Eligible Purchase made by you everywhere else that Mastercard is accepted will earn

2% Cash Rewards until July 31, 2024 and thereafter 1.5%.

So, to recap: Between now and July 31, the rewards program will remain the same. On Aug. 1, you’ll see a half-percent reduction in your cashback earnings potential on non-PayPal purchases.