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This page includes information about the Discover it® Cash Back and Discover it® Student Cash Back which are currently not available on Business Insider and may be out of date.
PayPal has long been used as a platform for money transfers, but it's also a common payment method for purchases made online. With a PayPal account, you can pay for purchases with participating retailers using the balance in your account, or with another payment method like a credit card.
When you connect a credit card to your account and use that card for purchases, you get the convenience of paying with PayPal plus any benefits you get from using a credit card. For example, paying with plastic can help you secure consumer protections like purchase protection against damage or theft, extended warranties on eligible items, return protection, and zero fraud liability.
You also get to earn rewards on purchases made through PayPal with a credit card, which can be especially fruitful if you use a credit card that gives you bonus points on PayPal purchases.
We're focused here on the rewards and perks that come with each card. These cards won't be worth it if you're paying interest or late fees. When using a credit card, it's important to pay your balance in full each month, make payments on time, and only spend what you can afford to pay.
If you plan to use PayPal for your holiday shopping or you simply want to make the most of purchases made through this platform, here are three cards worth considering.
Chase Freedom Flex - 5x rewards with PayPal until December 31
The Chase Freedom Flex℠ offers 5% cash back (5x Chase Ultimate Rewards points) on up to $1,500 spent in quarterly bonus categories when you activate (then 1%), 5% back on travel purchases through Chase, 3% back on drugstore and dining purchases, and 1% back one everything else.
The quarterly bonus categories this card offers have included PayPal purchases in the past and possibly could again in 2021. For the final quarter of 2020 (October to December), the 5% bonus categories are PayPal and Walmart (this also applies to the legacy Chase Freedom®, which is no longer available to new applicants).
You can redeem rewards from either card for cash back, statement credits, gift cards, travel, merchandise, and more. And if you also have the Ink Business Preferred® Credit Card, Chase Sapphire Reserve®, or Chase Sapphire Preferred® Card, you can pool your points and access more redemption options like transferring points to Chase's airline and hotel partners or getting bonus value when you redeem through the Chase travel portal or Pay Yourself Back.
Discover it® Cash Back - 5% back in Q3 of 2021
The Discover it® Cash Back is another rewards credit card that offers 5% back on up to $1,500 spent in quarterly bonus categories (then 1%) when you activate. In addition to bonus rewards, you'll also get 1% back on everything else. Once you're a cardholder, Discover will also match the rewards you earn after the first 12 months of opening the card.
While the final quarter of this year (October to December) extends 5% back on Amazon.com, Walmart.com, and Target.com purchases, Discover has already announced their cash-back bonus calendar for 2021. From July to September of 2021, you can earn 5% back on restaurant and PayPal purchases up to limits.
The Discover it® Cash Back has no annual fee, and you can redeem your rewards for cash back, charitable donations, gift cards, or purchases made through Amazon or PayPal.
Discover it® Student Cash Back - 5% back in Q3 of 2021
If you're a young adult with limited credit history, you can also earn bonus rewards on PayPal purchases with the Discover it® Student Cash Back. This card has the same earning rate as the Discover it® Cash Back, so you'll earn 5% back on up to $1,500 spent in quarterly bonus categories when you activate (then 1% back) as well as 1% back on other purchases. New cardholders will also have their rewards matched at the end of the first 12 months through the Discover CashBack Match program.
The very same quarterly bonus categories also apply with this card, so you can earn 5% back up to limits on PayPal and restaurant purchases made from July through September of 2021. This card also comes with no annual fee, and you can earn a $20 Good Grade Reward each year you maintain a GPA of 3.0 or higher for up to five years.
How to find the right credit card for online shopping
The rewards credit cards featured above offer bonus points on PayPal purchases, but there are plenty of other credit cards that can help you boost your rewards haul when you shop online. This includes credit cards that reward you handsomely when you shop at Amazon, for example, as well as travel rewards credit cards that let you earn points and miles for all kinds of purchases you make.
With some research, you should be able to find a card that offers the most rewards for all your spending throughout the year. In addition to rewards rates, make sure to compare cards based on their benefits and features, sign-up bonuses, and the fees they charge.
Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. What you decide to do with your money is up to you. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.
Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.
Business Insider may receive a commission from The Points Guy Affiliate Network, but our reporting and recommendations are always independent and objective.
Please note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.