Paypal Holdings Inc.
The online payments company is pushing Paypal past the web, championing the use of Paypal credit cards for daily use at physical, brick-and-mortar shops. Paypal Chief Commercial Officer Darrell Esch argues that consumers will not only use Paypal for physical purchases but will go "shopping more on Paypal with this card."
The 2% cash back rate opens new doors for consumers that desire the best credit rewards possible. Given that most cards offer 1.5% cash back or less, Paypal's cashback card is a outlier in the credit card business. With the California-based online financial company's new card, Paypal will come in direct competition with Citi's
The Paypal Cashback Mastercard is the result of a partnership with Mastercard
Exclusive to Paypal members only, the Paypal CashBack credit card places cash rewards directly on the cardholder's Paypal balance. The easy accessibility to cash rewards allows Paypal users to use the money instantly through Paypal, or transfer it to a bank of their choice for use outside of Paypal. As if the benefits were not enough, Paypal members who have been approved for the credit card are allowed to access its funds before the card appears in the mail.
While Paypal offers a plethora of benefits for its future cardholders, the CashBack card comes with the one of highest annual percentage rates offered for credit cards. The APR rates are calculated according to the cardholder's credit score, which then correlates to a rate of 16.99%, 24.99% or 27.99%. For comparison, the average credit card APR rate is 16.69%. Moreover, the credit card issues foreign transaction fees, and does not offer a sign-up bonus or a 0% introductory period that allows cardholders to side step gathering interest from purchases.
Paypal's new cashback credit card will undoubtedly pave new ways for Paypal to reach new heights as a financial company with increased usage outside the barriers of the internet; Paypal shares already rose 1.25% upon announcing the new credit card. Due to the card's disadvantages, however, the card will most likely be used by those who use Paypal often, such as small business owners through eBay.
- http://money.cnn.com/2017/09/01/pf/paypal-credit-card/index.html
- https://www.bloomberg.com/news/articles/2017-08-30/paypal-debuts-credit-card-targeting-brick-and-mortar-shopping
- http://www.marketwatch.com/story/paypal-just-announced-it-has-a-new-cashback-credit-card-should-you-use-it-2017-08-31
- http://money.cnn.com/2017/09/01/pf/paypal-credit-card/index.html
- http://www.barrons.com/articles/paypal-credit-card-1504126544