Capital One cardholders can pay with rewards through PayPal
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With the COVID-19 pandemic hampering consumers’ ability to vacation, credit card issuers have rushed to roll out new ways to use points and perks typically reserved for travel. The latest example: Capital One is joining PayPal’s Pay With Rewards program to give customers the opportunity to redeem rewards on online 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.
What is PayPal Pay With Rewards?
Capital One joins American Express, Citi, Chase, and Discover as part of the PayPal program, which lets eligible cardholders use their points to cover their purchases on any website that features PayPal as a payment option.
That means holders of Capital One cards including the Capital One® Venture® Rewards Credit Card, Capital One® Quicksilver® Cash Rewards Credit Card, Capital One® Savor® Cash Rewards Credit Card, and Capital One® Spark® Miles for Business will have the opportunity to use their rewards at millions of retailers, large and small — but also on donations and other online payments.
To get started, customers just have to link an eligible Capital One card to their PayPal wallet and enroll. After that, the option to pay with points will appear at checkout when they select PayPal as a payment method.
Regular APR
17.24% to 24.49% variable
Credit Score
Good to Excellent
Featured Reward
Earn 100,000 bonus miles when you spend $20,000 on purchases in the first 12 months from account opening, or still earn 50,000 miles if you spend $3,000 on purchases in the first 3 months
- Annual Fee: $95
- Sign-Up Bonus: 100,000 bonus miles when you spend $20,000 on purchases in the first 12 months from account opening, or still earn 50,000 miles if you spend $3,000 on purchases in the first 3 months
Pros
- Annual fee waived the first year
- No bonus categories to keep track of
- Includes up to a $100 statement credit for Global Entry or TSA PreCheck
Cons
- Other credit cards offer higher rewards in certain categories of spending
Should you use Pay With Rewards?
While the new option makes using your Capital One rewards convenient, it won’t necessarily help you maximize their value.
For cash-back cardholders, $1 in cash rewards will net you $1 in redemption value when you use them to check out at PayPal. That’s the same value you’d get when using your rewards for cash back, so there’s really no downside to using Pay with Rewards.
But for those who earn miles with a Capital One® Venture® Rewards Credit Card or Capital One® Spark® Miles for Business, the calculus is a bit different. 125 miles are worth $1 in redemption value when you check out with PayPal, which is more than you’d need to spend when booking travel through the Capital One portal or using the Purchase Eraser to wipe a travel purchase off your statement.
With both of those options, 1 mile is worth 1 cent, meaning you’ll need just 100 of them for $1 in redemption value. And if you’re up for transferring your miles to a travel partner, you can squeeze even more value out of them by using them to book award tickets on an airline.
Of course, those latter three scenarios assume that you’re interested in using your points to book travel, which — given the current pandemic situation — may not be the case. And if you’re in a tough financial situation, the option to use points on everyday purchases is a useful one, especially if you’re not planning to travel anytime soon.
Other new ways to earn and use your Capital One rewards
Joining PayPal Pay with Rewards isn’t Capital One’s first step toward making its offerings more pandemic-friendly. Through the end of the year, Capital One® Venture® Rewards Credit Card and Capital One® VentureOne® Rewards Credit Card holders can redeem their miles on food delivery and streaming services such as Netflix, Hulu, and Disney+, while Capital One® Savor® Cash Rewards Credit Card and Capital One® SavorOne® Cash Rewards Credit Card holders can earn 4% and 3% cash back on streaming services, respectively.
Capital One also unveiled a limited-time partnership with Uber Eats to give Savor and SavorOne cardholders 5% cash back and Venture and VentureOne cardholders 5 miles per dollar when using the service through January 31, 2021.
Also, speaking of PayPal, it’s worth noting that the Chase Freedom Flex℠ and the Chase Freedom are currently offering 5% cash back on up to $1,500 in combined purchases at PayPal and Walmart through the end of the year. So if you want to maximize some of your online holiday shopping, these could be great cards to choose — PayPal is available as a payment method with most major retailers, after all.
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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.
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.
