PayPal Debit and Credit Cards

Image shows three panels: a man paying for something at a counter; a woman paying for her bill at a cafe; a woman paying for a movie ticket. Text reads:

Image by Lara Antal © The Balance 2019

PayPal has become well known as one of the first options that provided consumers the ability to send and receive money online. In addition to letting you send and receive cash, PayPal also offers credit and debit cards that you can use to access your Paypal balance for online payments and in-person purchases. Since these cards all have "Paypal" in their name, they're a bit confusing without some further explanation:

PayPal Plastic

PayPal has three different options for a debit or credit card:

  1. The Prepaid MasterCard
  2. The Debit MasterCard
  3. The Extras MasterCard

PayPal Prepaid MasterCard

The PayPal Prepaid MasterCard is a PayPal-branded prepaid debit card. Like all prepaid debit cards, you’ll load funds onto the card before using it and then spend the money you’ve loaded. Key facts about this card:

  • The card is not like a standard debit card that pulls funds from a checking account at your bank or credit union.
  • Unlike a credit card, it does not let you spend money you don’t have.
  • The card does not pull funds from your PayPal account balance. You need to load funds onto the card to use it.

Prepaid cards are useful for managing your spending because you can only spend what you’ve loaded, and it’s impossible to rack up debt and overdraft charges. Almost anybody can get a prepaid card, even if you’ve never built up a credit history or you have bad credit. However, prepaid cards are notorious for fees, so pay attention and avoid letting fees eat up your whole prepaid card balance.

Up-front cost: You can get a card for free if you order online from PayPal. You can also purchase cards from participating retailers (originally, retailers sold the cards for $4.95 but prices vary).

Ongoing costs: You’ll pay $4.95 per month to keep the card open. That’s more expensive than some prepaid cards and even more expensive than some banks where you might be able to get free checking and a free debit card. If you don’t have a bank account, you would probably save a lot of time and money by opening one. PayPal also charges fees for transactions like ATM withdrawals, although ATMs on the Allpoint network may be free to use.

Good news: Funds in your Prepaid MasterCard account are FDIC insured, and there is no credit check to open an account. Once you activate the card by providing personal information including your Social Security Number, you can use bank-like features such as paying bills online and having your pay added to your account through direct deposit.

Your PayPal account: The card doesn’t pull funds from your PayPal balance, but you do need a PayPal account, either your existing account or a new account if you don’t yet have one.

Your PayPal account is used to view your card balance, pay bills online, and add funds to your card from your bank after you have a bank account linked to your new PayPal account. You can use the prepaid card as a funding method for PayPal payments if you choose.​

Bad news: If your PayPal account is frozen for any reason, online access to your prepaid card will also be shut down. Online sellers sometimes experience unexpected freezes, so think twice if there’s any risk to your account.

To get account information, you’ll need to use the automated phone system or an ATM (balance inquiries cost $0.50 at the ATM). You can also add funds to your account at certain retailers, such as convenience stores.

PayPal Debit Mastercard

The PayPal Debit Mastercard is a card that functions more like a standard bank account debit card. Instead of “loading” funds onto your card, you can spend the cash directly from your PayPal account balance.

Spending money: To use the card, you’ll need to have funds in your PayPal account from payments you’ve received or transfers you’ve made into the account, for example. If you don’t have funds in your account before you use the card, your purchase will be rejected, unless you set up a backup funding source, such as your bank account, which allows you to spend even if you don’t have any money in PayPal. You can only withdraw cash if you’ve got sufficient funds in your PayPal balance.

Business account: Currently, the PayPal Debit Mastercard is only available for certain business accounts. Individuals who do not run a business will have a hard time getting this card.

You’ll need to have a business account, open one, or convert your existing account to a Premier or Business account. If you convert your personal account to a business account, you might find that you have to pay fees to receive payments, which wasn’t the case with your personal account.

Good news: Rewards. The main benefit of this card is that you get one percent cash back on certain purchases that you make with the card, but be sure to choose “credit” at checkout for your purchase. What’s more, you have faster access to payments you’ve received from customers.

If you need to buy more supplies, you can simply pay with the debit card instead of waiting to transfer the money to your bank account. There are no monthly fees, but you might have to pay fees for transactions like ATM withdrawals and cash advances.

Be aware that PayPal will pull your credit soft inquiry when you apply for a Debit MasterCard. This is mainly to verify your identity and look for any major problems.

PayPal Extras Credit Card

If you’d prefer a credit card instead of a debit card, the PayPal Extras card is another option. This card allows you to borrow from PayPal, via a credit account with Synchrony Bank. Of course, it’s best to pay off your credit card balance in full every month. The best reasons to use this card might be to earn points and take advantage of consumer protection that comes with credit cards.

Good news: The main benefit of the Extras card is the ability to earn points as you spend. Certain purchases earn one to three points, which can be redeemed for gift cards, travel vouchers, or cash back to your PayPal account. There is no annual fee, but you’ll pay interest if you don’t pay the card off every month, and other fees might apply.

Approval required: To get the Extras card, you’ll need to qualify, just like you would with any loan or credit card. PayPal will check your credit and ask about income and employment.