The first is a traditional credit account, while the second is a plastic credit card
PayPal got its start in peer-to-peer (or person-to-person) transactions, which helped it build a strong reputation as a reliable platform for transferring money online. PayPay Credit and PayPal Mastercard are two of the credit alternatives that the platform offers, which have allowed it to grow its position in the global economy and better link customers with merchants.
While the other is more like a typical credit card, the first acts as a digital credit line for the user. Both provide customers with compelling reasons to pick them, but a closer examination of the specifics makes it more obvious when to go with one over the other.
How each possibility could be used
Synchrony Bank is the financial institution that is responsible for issuing PayPal Credit as well as the PayPal Cashback Mastercard. After establishing a connection between your PayPal account and the digital credit line known as PayPal Credit, you will be able to use the latter to pay for items that need credit everywhere PayPal is accepted. Instead of applying for new credit with each usage, you may reuse your existing credit line with participating shops instead of having to apply for new credit each time.
You are able to make purchases on credit with the PayPal Cashback Mastercard, but it comes with all of the features that are typical of standard credit cards. For in-store purchases, you can pay with your credit card by swiping it, whereas online transactions require you to input your billing information. You can do the same thing with your credit card as you do with PayPal Credit: attach it to your PayPal account and use it as a source of funding at stores that accept PayPal.
Where, Specifically, Might You Make Use of Each Option?
You have more leeway in how you use your credit account because the PayPal Cashback Mastercard is a co-branded credit card and may thus be used everywhere that accepts Mastercard. When used outside of the United States, international tourists won’t be charged any additional fees for making purchases using their credit cards.
You can use your credit card to get a cash advance. However, given that the average annual percentage rate (APR) for cash advances is now 26.99 percent (variable), and that there is also a charge associated with getting a cash advance, you should only do so in an emergency.
When compared, PayPal Credit is utilized just a small percentage of the time. You can only use your credit card at stores that accept PayPal, which means that for many of your day-to-day acquisitions, this may not be a viable alternative for you. A physical credit card is not required to make purchases, and you will not be required to provide an account number when checking out. This is a positive aspect of this payment method. Your credit card is less likely to be misplaced or stolen, and the security of your credit information is less likely to be affected in the event of a data breach.
Promotions that are currently available
When you make a purchase that costs more than $99.01 using PayPal Credit, you are eligible for a special financing offer that gives you six more months to pay off the balance with no additional interest charged. All transactions with a total value of less than $99 must be paid in full to avoid accruing interest. In that case, the standard APR will be used to calculate the financial costs that need to be paid.
Even though you are able to make the minimum payment each month, it is possible that this will not be enough to pay off the total in the next six months. Since the interest is delayed, it will be added to your account from the date of purchase if you do not pay off your debt in full within the first six months after making the purchase.
There is a second specialized financing choice available, and it is referred to as Easy Payments. Some merchants may provide this option. You have the option, when using Easy Payments, to pay off items that are more than $30 in three equal installments.
Regrettably, the PayPal Cashback Mastercard does not provide a promotional interest rate for new cardholders to take advantage of. In the terms and conditions of the card, it is stated that it provides a no-interest period of up to 18 months and periodic special financing promotions. However, it does not specify when these offers will be made accessible.
The Provision of Rewards
The PayPal Cashback Mastercard is an option that will likely appeal to customers who take pleasure in collecting rewards. The flat rate of 2% cash back on purchases is competitive with other flat rates of cash back now available on the market.Another advantage of collecting rewards with the PayPal Cashback Mastercard is that there are no bonus categories that cardholders need to keep track of, nor are sign-ups required in order to do so. Because you can use your card for both online and in-store purchases, you have more opportunities to earn points on your card.
Your rewards may be redeemed for any amount, and if you upgrade your PayPal account to either the Cash or Cash Plus programs, you’ll have the ability to spend your rewards through your PayPal balance. In any other case, you can use the rewards you have earned by transferring them to your bank account.
There are no incentives available for using PayPal Credit
If you want to send money to family and friends, you can do so with PayPal Credit or the PayPal Cashback Mastercard (linked to your PayPal account) for an additional fee of 2.9 percent plus $.30 per transaction.
When using PayPal Credit to send money, the transaction is counted as a cash advance rather than a standard purchase. Even for purchases that total more than $99, you won’t be eligible for any promotional financing. You will also be subject to the standard annual percentage rate (APR) for cash advances. (At this time, however, the APRs for both loans remain the same.)
Functionalities and safety precautions
PayPal provides buyer protection for all transactions completed through the platform, with a few notable exceptions, including real estate, motorized vehicles, prepaid cards, and commodities that are created to the customer’s specifications. When you make qualified purchases, buy protection will pay you for the total value of the transaction in addition to the shipping expenses.
The PayPal Cashback Mastercard also comes with a few perks that are exclusive to Mastercard, including protection against identity theft, access to Mastercard Global Services, and a concierge service at Mastercard airports.
Charges as well as interest
For new PayPal Credit accounts, the annual percentage rate (APR) is now 23.99 percent, and it varies with the Prime Rate.This rate applies to both purchases and cash advances. There is no cost imposed on an annual basis. However, if you are late with a payment, you will be subject to a late fee of up to $40. If you are authorized for a PayPal credit line, the company promises that you will begin with a minimum credit line of $250 and have the opportunity to have your credit limit increased on occasion.
Depending on your credit history, the annual percentage rate (APR) offered by the PayPal Cashback Mastercard ranges from 14.99 percent to 26.99 percent at the present time. Similar to PayPal Credit, there is no yearly cost, but you can be charged a late fee of up to $40 if payments are not made on time.
Where Each Option Takes On Its Own
If you create a credit card account, you may qualify for a promotional rate on purchases made within the first few months of having the card. However, this rate is only available on credit cards that provide an introductory rate on purchases of 0%. As long as the total of your transactions is greater than $99, you are eligible to take advantage of the interest-free period offered by PayPal Credit on an ongoing basis.
If you want to earn cash back rewards or have more freedom with your credit card, the PayPal Cashback Mastercard is the better option. Both of these goals may be achieved with the card. You have other options to earn rewards on purchases, in addition to the straightforward cash incentives that are offered at a flat rate.