Should You Redeem Credit Card Rewards Through PayPal?

Pros and Cons of PayPal’s Pay With Rewards

A shopper buys a gift for a friend through PayPal rewards.
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Hinterhaus Productions / Getty Images

PayPal’s Pay With Rewards program is an alternative way to put your credit card rewards to good use. The idea is simple: Link one of your rewards cards to your PayPal account, and then during PayPal checkout, you can use points to pay. 

Although it’s simple to set up and it’s tempting to redeem your rewards at checkout, there are some things you should know to decide if it’s a good redemption choice for you. Learn more about how Pay With Rewards works, which cards are compatible, and the pros and cons.

What Is PayPal’s Pay With Rewards Program?

PayPal’s Pay With Rewards lets customers checking out with PayPal apply rewards from their linked credit cards. This gives shoppers an additional option for redeeming their points and makes it convenient to do so right on the PayPal checkout screen.

To set up this feature, add an eligible credit card as a payment method in PayPal, then link your rewards account. When you’re checking out, just select that card for the transaction, and you’ll automatically have the option to use some or all of your points, miles, or cash back to pay for the purchase. 

As long as you’ve linked an eligible rewards card to your PayPal account, you’ll see your available rewards at checkout and can do an instantaneous redemption.

Which Credit Cards Work With PayPal Pay With Rewards?

PayPal’s Pay With Rewards works with many of the most popular credit card rewards programs including the following:

Issuer Eligible Personal Cards Eligible Business Cards
American Express Platinum Card, Gold Card, Green Card, EveryDay Preferred, EveryDay, Blue from American Express Business Platinum, Business Gold, Business Green Rewards, Blue Business Plus
Capital One Venture, VentureOne, Quicksilver, QuicksilverOne, Savor, SavorOne, Journey Student Spark Miles, Spark Miles Select, Spark Cash, Spark Cash Select, Spark Classic
Chase Freedom Unlimited, Freedom Flex, Sapphire Reserve, Sapphire Preferred Ink Business Unlimited, Ink Business Cash, Ink Business Preferred
Citi Premier, Prestige, Rewards+, ThankYou Preferred, Expedia Rewards, Double Cash, AT&T Access Business ThankYou, Chairman American Express
Discover Discover it, Discover it Miles, Discover it Chrome, Discover More Discover it Business
U.S. Bank Altitude Go, Cash+, Altitude Reserve None

Pros and Cons of Redeeming Credit Card Rewards Through PayPal

Deciding if the Pay With Rewards program is a good choice for you depends on the cards you’re using and your personal shopping preferences.

Pros
  • It’s simple to use

  • You’ll get PayPal’s consumer benefits

  • It’s a safe way to shop online

Cons
  • Redemption values vary

Pros Explained

It’s simple to use: Some shoppers may appreciate that real-time convenience of instantly redeeming your points for a purchase, rather than, say, redeeming rewards for a gift card that may take a few weeks to arrive.

You’ll get PayPal’s consumer benefits: Part of the appeal of using PayPal to buy items online is its purchase protection. If an item arrives damaged, part of your order is missing, or you receive an item that looks nothing like what was advertised, PayPal will refund what you spent on the merchandise and shipping. In addition, PayPal also has a free return shipping policy. For items you purchase with PayPal, you can either create a free return shipping label via the platform, or you can request a refund for what you pay to ship a return (up to $30 each on 12 eligible purchases a year).

It’s a safe way to shop online: PayPal is generally considered a safe way to shop since it puts a layer of protection between your credit card (or bank account) and the sale.

Cons Explained

Redemption values vary: When using PayPal’s Pay With Rewards, you may not always get the best bang for your reward buck. For instance, American Express Membership Rewards points are only worth 0.7 cents through PayPal, whereas you can get 1 cent per point if you redeem for gift cards. Chase Ultimate Rewards are also worth just 0.8 cents on PayPal purchases, whereas you can get much higher value when redeeming for travel. Citi and Discover are safer bets, with both offering 1 cent per point. 

We consider 1 cent per point to be the floor when it comes to credit card reward redemptions. Rates below that are a poor value—and anything greater is a good return.  

The Bottom Line

Ultimately, deciding if this program is a good way to use your rewards comes down to which cards you have, and your personal situation. If you can get a decent redemption value, then using PayPal’s Pay With Rewards can be a convenient and safe way to use rewards while you’re shopping online. Plus, you’ll also score PayPal’s consumer-friendly protections.

If you’re more of a miles chaser, however, you can find more valuable ways to cash in your rewards. The travel redemption options you have with American Express, Chase, and Citi give your points more value than what PayPal offers.

PayPal’s Pay With Rewards is hard to resist when it’s right there for you to click and save at checkout. Just consider whether it’s the best use of your points before you take advantage.