PayPal CashBack Mastercard Discontinued: What It Means for Businesses

In an unexpected move, PayPal and Mastercard have announced the discontinuation of the PayPal CashBack Mastercard. This decision, effective September 23, 2024, has left many cardholders searching for alternatives to replace the card’s unique benefits.

Key Points:

1. Account Closure: All PayPal CashBack Mastercard accounts will be closed on September 23, 2024.
2. No New Transactions: After the closure date, no new purchases or advances will be allowed on these cards.
3. Outstanding Balances: Cardholders remain obligated to pay any remaining balance according to updated terms.
4. Credit Limit Changes: Effective September 16, 2024, credit limits will be reduced to match current balances.
5. Minimum Payment Adjustments: Starting October 30, 2024, there will be changes to how minimum payments are calculated.

Impact on Cardholders

The closure of this card is particularly significant due to its generous cashback program. The PayPal CashBack Mastercard offered an unmatched 3% cashback on all purchases made through PayPal using the card. This level of unrestricted cashback is rare in the credit card market, making it a favorite among savvy consumers and businesses alike.

Looking Ahead

For those affected by this closure, it’s crucial to:

1. Review your current balance and payment obligations
2. Update any automatic payments linked to the card
3. Research alternative credit cards that might offer similar benefits

While finding an exact replacement for the 3% cashback on PayPal purchases may be challenging, there are still competitive cashback and rewards cards available in the market.

Our Favorite Alternative: Capitol One

You won’t find another solution offering 3% cashback across the board with no limits, but our favorite traditional business credit cards are from Capital One. They provide flexible options that cater to various spending needs, making it easy for businesses to earn rewards and maximize value.

Summary of Capital One Business Cash Back Cards:

1. Capital One Spark Cash Plus: Best for businesses with high monthly spending that can benefit from unlimited 2% cashback and are comfortable with a $150 annual fee.
2. Capital One Spark Cash Select for Excellent Credit: A no-annual-fee option offering 1.5% cashback on every purchase, ideal for businesses that want a simple, cost-effective way to earn rewards.
3. Capital One Spark Cash Select for Good Credit: Offers 1.5% cashback with no annual fee, suitable for businesses with good credit looking to earn rewards without the cost of an annual fee.
4. Capital One Spark Miles for Business: Great for businesses that prefer travel rewards over cash back, with 2x miles on every purchase and no foreign transaction fees.

1. Capital One Spark Cash Plus

• Cashback Rate: Unlimited 2% cashback on every purchase.
• Annual Fee: $150
• Pros:
  • Simple, Flat Cashback Rate: Earn unlimited 2% cashback on all purchases, which makes it easy to maximize rewards without needing to track spending categories.
  • High Spending Bonus: Earn a $1,200 cash bonus after spending $30,000 in the first 3 months.
  • No Preset Spending Limit: This card has no preset spending limit, which offers flexibility for businesses with varying monthly expenses.
  • Flexible Payment Terms: While this is a charge card, meaning the balance is typically due in full each month, it provides flexibility with higher credit limits.
• Cons:
  • Annual Fee: The $150 annual fee might not be ideal for businesses with lower spending volumes that may not earn enough cashback to offset the cost.
  • Requires Full Payment Each Month: Since it is a charge card, you need to pay the balance in full each month, which may not be suitable for businesses that prefer to carry a balance.
• Learn More About This Card

2. Capital One Spark Cash Select for Excellent Credit

• Cashback Rate: Unlimited 1.5% cashback on every purchase.
• Annual Fee: $0
• Pros:
  • No Annual Fee: Ideal for businesses looking to earn cashback without the cost of an annual fee.
  • Straightforward Rewards: Earn unlimited 1.5% cashback on all purchases, making it simple to earn rewards without tracking categories.
  • Introductory Bonus: Earn a $500 cash bonus after spending $4,500 in the first 3 months.
  • Flexibility: Suitable for businesses that want a straightforward, no-cost option for earning cashback on every purchase.
• Cons:
  • Lower Cashback Rate: The 1.5% cashback rate is lower than some of the other options available, which may not be ideal for businesses with higher spending that want to maximize rewards.
• Learn More About This Card

3. Capital One Spark Cash Select for Good Credit

• Cashback Rate: Unlimited 1.5% cashback on every purchase.
• Annual Fee: $0
• Pros:
  • No Annual Fee: Makes it a cost-effective choice for businesses with limited or inconsistent spending.
  • No Minimum Redemption: Redeem your cashback rewards in any amount, which adds flexibility to your rewards strategy.
  • Builds Credit: Designed for business owners with good credit who may not qualify for premium cards but still want a solid cashback option.
• Cons:
  • Lower Cashback Rate: 1.5% cashback may not be as competitive compared to cards offering higher rates, particularly in specific spending categories.
• Learn More About This Card

4. Capital One Spark Miles for Business

• Rewards Rate: 2x miles per dollar on every purchase.
• Annual Fee: $0 for the first year; $95 after that.
• Pros:
  • Travel Flexibility: Earn 2x miles on every purchase with no blackout dates or minimum redemption amounts. Miles can be redeemed for flights, hotels, car rentals, and more.
  • Sign-Up Bonus: Earn 50,000 bonus miles (equal to $500 in travel) after spending $4,500 in the first 3 months.
  • No Foreign Transaction Fees: Ideal for businesses that spend overseas.
• Cons:
  • Annual Fee After First Year: $95 annual fee kicks in after the first year.
  • May Not Be Ideal for Cash Rewards Seekers: This card is more geared towards businesses looking for travel rewards rather than straight cash back.
• Learn More About This Card

At Caboodle Media, while we’re not financial advisors, we understand the impact of such changes on businesses. As a marketing and business consultancy, we help our clients navigate these kinds of transitions and find optimal solutions for their financial tools and strategies. If you’re looking to reassess your business’s fintech toolkit in light of these changes, we’re here to help guide you through the process.

Disclaimer: The information provided here is for informational purposes only and does not constitute financial advice. We are not financial advisors, and you should consult with a professional before making any decisions related to credit cards or other financial products.

Original Email:

[CARDHOLDER] – Important notice about your PayPal Business Cashback Mastercard® account status

September 16, 2024

[CARDHOLDER INFORMATION]

Re: PayPal Business Cashback Mastercard® Credit Card Account Number XXXX-XXXX-XXXX-XXXX

NOTICE OF ACCOUNT CLOSURE AND CHANGES TO ACCOUNT TERMS

Dear [CARDHOLDER] :

This letter is to inform you that the PayPal Business Cashback Mastercard® is being discontinued and all credit card accounts will be closing. It also is to inform you of additional changes that the creditor is making to the terms of your account, including your credit limit and required minimum payment. Please read this letter carefully as it contains important information about your credit card account and its updated repayment terms.

Effective September 23, 2024, your above-referenced credit card account will be closed. This means that you will not be able to use your credit card account for new transactions after this date. Transactions that are still outstanding as of that date will continue to process, but any new transactions after that date will be declined. Any returns, refunds, or other credits to your credit card account will still be permitted.

Even though your credit card account will be closed to new purchases or advances, you remain obligated to pay the remaining outstanding balance in a timely manner and in accordance with the terms of your existing cardholder agreement in effect at the time of such repayment, subject to the additional changes set forth below.

Specifically, effective September 16, 2024, your new credit limit is [CURRENT BALANCE]. You understand that after this date, any transactions that would cause you to exceed your new credit limit may be declined.

Please review the following change to the calculation of your minimum payment amount after the effective date:

Effective October 30, 2024, the way the minimum payment is calculated on your account will be changing. This change will be in effect for your credit card account until your outstanding balance is paid in full.

Minimum Payment:

The minimum payment due for each billing cycle will be the greater of:

$35.00 and
The sum of
Any past due amounts; and
Any fees assessed during the billing cycle; and 1.00% of the account balance as of the last day of the October 2024 billing cycle; and
the applicable periodic rate on your card times the balance on your account as of the October 2024 billing cycle; and 4.00% of any charges posted to your account after October 2024 billing cycle The minimum payment due will never be more than the outstanding balance on your account. If you pay more than the minimum payment due for a billing cycle but less than the outstanding balance, you are still required to pay the minimum payment due in the next billing cycle.

If your credit card account is subject to an annual fee and you were billed for such a fee less than 12 months ago, you will be refunded the portion of the fee corresponding to the remaining billing cycles covered by your annual fee. Any such refund will be credited to your credit card account. If you have authorized a merchant to automatically charge your credit card account (such as utility companies or internet providers), you are responsible for changing your payment method directly with each merchant If you fail to do so, you understand that such charges may be declined and you may be liable for any fees, charges, or losses you may incur as a result.

If you have authorized a merchant to automatically charge your credit card account (such as utility companies or internet providers), you are responsible for changing your payment method directly with each merchant. If you fail to do so, you understand that such charges may be declined and you may be liable for any fees, charges, or losses you may incur as a result.

A separate email will be sent regarding your Rewards balance.

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