How Does PayPal Pay With Rewards Work?

Using your card rewards by linking in this way has pros and cons

Mother and daughter buy something together in kitchen from an tablet while the mother holds a credit card.
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For credit card rewards enthusiasts, flexibility for redemption is often a top priority. PayPal’s Pay With Rewards program offers cardholders the chance to use their cash back, points, or miles to shop online, giving them an alternative to travel, merchandise, and other common rewards redemption options. 

But while this program makes it even easier to use your rewards, it may not be the best way to redeem them. 

What Is PayPal’s Pay With Rewards Program?

The PayPal Pay With Rewards program allows eligible credit card holders to link one or more of their credit cards to their PayPal accounts and use their cash-back points or miles to pay for online purchases there instead of paying out of pocket. 

Depending on which credit card you have, the value of your rewards when using the program can vary. 

If you can get a good redemption rate and you’re short on cash, or you don’t plan to use the rewards for anything else, such as travel, it can be a good way to save some money.

How Does Pay With Rewards Work?

If you have an eligible credit card, you’ll start by linking your card to your PayPal account. Then you can use your cash back, points, or miles when you shop at online stores that accept PayPal. 

PayPal gives you the option to pay the full amount, or just a portion, with rewards. You’ll also be able to enjoy PayPal benefits, including reimbursements for shipping on eligible returns and purchase protection on select purchases.

The PayPal program includes the following rewards programs:

American Express  
Blue from American Express The Platinum Card from American Express
Amex EveryDay Credit Card  Business Green Rewards Card from American Express
The Amex EveryDay Preferred Credit Card from American Express American Express Business Gold Card
American Express Green Card The Business Platinum Card from American Express
American Express Gold Card Blue Business Plus Credit Card from American Express
Capital One
Capital One Venture Rewards Credit Card Capital One Spark Cash for Business
Capital One VentureOne Rewards Credit Card Capital One Spark Cash Select Excellent Credit
Capital One Savor Cash Rewards Credit Card Capital One Spark Classic for Business
Capital One SavorOne Cash Rewards Credit Card Capital One Spark Miles for Business
Capital One Quicksilver Cash Rewards Credit Card Capital One Spark Miles Select for Business
Capital One QuicksilverOne® Cash Rewards Credit Card Journey Student Rewards from Capital One
Chase  
Chase Freedom Chase Sapphire Reserve
Chase Freedom Flex Ink Business Preferred Credit Card
Chase Freedom Unlimited Ink Business Cash Credit Card
Chase Sapphire Preferred Card Ink Business Unlimited Credit Card
Citi  
Citi Rewards+ Card Citi Prestige Card
Citi Premier Card  
Discover  
Discover it Cash Back Discover it Chrome
Discover it Miles Discover More
ScoreCard Rewards  
ScoreRewards Credit Card  
U.S. Bank  
U.S. Bank Altitude Go Visa Signature Card U.S. Bank FlexPerks Gold American Express Card
U.S. Bank Altitude Reserve Visa Infinite Card  

Which Cards Work Best With Pay With Rewards?

While the PayPal Pay With Rewards program gives you a lot of flexibility for online shopping, some rewards programs offer more value than others. 

More specifically, if you have a Capital One cash-back credit card, you’ll get the same rate as if you were to redeem for straight cash back. Also, Discover and Citi credit cards usually give you 1 cent per point or mile in value. We consider 1 cent per point to be the floor of good redemption value. Anything less is a poor return. 

Which Cards Shouldn’t Be Used?

With other rewards programs available in the PayPal program, you’ll get a discounted value if you use your points or miles with PayPal. Here’s what you can expect to get with each one:

Program Redemption Rate
American Express Membership Rewards 0.7 cent
Capital One Miles 0.8 cent
Chase Ultimate Rewards 0.8 cent

With each of the credit cards in these programs shown above, you can get more value if you use your rewards for other purposes. As such, you’re better off saving your points or miles instead of using them to pay for online purchases via PayPal. 

Pros and Cons of Pay With Rewards

Depending on which credit card you have, there are both benefits and drawbacks to using PayPal’s Pay With Rewards program.

Pros
    • Access to benefits PayPal offers to consumers who use it as a payment method
    • Lets you avoid sharing your credit card information with the retailer
    • Protection via PayPal’s payment security system
    • A solid redemption rate with some credit cards
Cons
    • Some cards offer more value on other redemption options
    • You won’t earn rewards on a purchase because you’re not paying with your credit card

Before you decide to use Pay With Rewards, check your other redemption options to see if you’re maximizing your rewards by using it or leaving value on the table. Also, consider some of the other pros and cons to determine whether the program is worth it for you.

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