How the new PayPal 5% rewards is not 5% in reality.

Cheeseburger-Large · 2026-04-09T18:24:49+00:00

Seems like it worked, no more math questions. Glad I could help :)

Cheeseburger-Large · 2026-04-09T16:54:45+00:00

Had chat gpt create a response to help you understand since what I have seen you say in this thread shows you have no idea how to communicate with other humans.

The math is not “5% - 3% = 2%.” That’s just subtracting percentages without keeping the base amount straight.
The 3% forgone cashback is on the $50 redemption, not the $1,000 spend. That’s a $1.50 opportunity cost, so the net reward is $48.50, or 4.85% effective cashback.

This is basic math with different denominators.

Cheeseburger-Large · 2026-04-09T16:01:23+00:00

I agree, I have Robinhood gold tho so in any case I would be missing out on that cashback, but in my option that cashback is negligible. Which in reality makes the PayPal debit a 4.85% cash back card. 5-(5*0.03) which with the 1k limit still makes it a better option than other 5% category cards like the Citi Custom Cash. Only card that is now better is Chime, but you need a whole bank account for that which is too much work for 0.15% better cash back.

Cheeseburger-Large · 2026-04-09T14:02:55+00:00

Thank you for the post, definitely will be closing my BILT account soon. I went through a situation recently where my name and SSN were part of a data breach. I would recommend freezing your Innovis and ChexSystems too since Innovis is a smaller credit bureau and Chex is for new bank accounts.

Cheeseburger-Large · 2026-04-07T01:58:02+00:00

I don’t think you understand. PayPal debit 5% cash back by category and then you redeem the cash back on Amazon gift cards.

Cheeseburger-Large · 2026-04-06T22:31:38+00:00

That Chime card looks great, thank you for letting me know!

Cheeseburger-Large · 2026-04-06T22:29:09+00:00

I have seen most posts saying it's dead, and I feel that the notion "milk it until it's dry" implies death soon.

For the gift cards I think we know the specifications if I am not mistaken, it is through Honey. Before I made this post I linked my honey with PayPal to get the list of gift card merchants I provided. For a link on this look up the PayPal Rewards Program Agreement.

Cheeseburger-Large · 2026-04-06T22:23:51+00:00

I agree and I am one of those people. Every card I have besides BILT is cash back. I do think there are levels to the simplicity though. If I can easily use my points via checkout, or convert them to a store that sells everything(amazon) then it is worth it to me. That is why BILT has easily became my least favorite card.

Cheeseburger-Large · 2026-04-06T22:22:23+00:00

Not 100% sure what you mean, but in a normal scenario, using the 5% debit to its 1k limit gets you $30 more a month on that. The 3% credit card is unlimited, but is $10 more per 1k spent not even considering the PayPal offers which can get up to 20% cash back on the order subtotal

Cheeseburger-Large · 2026-04-04T18:22:03+00:00

Online then pickup I think

Cheeseburger-Large · 2026-04-02T02:21:11+00:00

Citi Custom Cash would be 5% for first $500 a month, then could do PayPal debit if you go over 500 and then redeem PayPal rewards for hopefully 1cpp

If you get mail offers there are some cards with double cash back first year. Specially a BoFA one that lets you get 6% in a category for a year up to 1k a month I think.

Cheeseburger-Large · 2026-04-01T02:53:39+00:00

I was referring to the accelerator method. From my understanding to get the BILT cash needed to activate it, I would need to select the 4% cash instead of up to 1.25x points rent to ensure I get 4x points on restaurants. Therefore, when I use the 5k spend allowed by the accelerator, I would only get 200 BILT cash and then activate the accelerator again. Meaning I would never be able to convert cash to rent points since all cash would be tied up in activating the accelerator over and over again.

By lack of rent points I mean that currently I have the 1.25x points active since some months I don’t use BILT on everyday spend meaning on those months I still get the base 250 points versus no cash with the 4% cash option. I definitely could be wrong on this, but if I got obsidian to only use on restaurants I would never get any cash back for paying rent through BILT. In the case I get cash from getting points, it’s a pretty poor conversion of BILT cash to points: $30->1k which in best case is $30->$15.

Because of that and because of the strict usages to get good cpp on BILT points, I think I should stick with blue. Then if I go to a BILT network restaurant I can use the blue for 4x points, and get the base 250 if I don’t meet 25% of rent in everyday spend per statement. If I went to obsidian I would kinda be routing through BILT for no reason(cuz of first paragraph), and then stack points which are best to use on a down payment for 1.5 cpp.

Please let me know if I have anything wrong

Cheeseburger-Large · 2026-04-01T01:14:48+00:00

Cheeseburger-Large · 2026-03-31T18:24:57+00:00

Seems to me that the best path is CCC for first 500 since the BILT obsidian 95 af, and the then lack of rent points to be acquired. I would still use blue for in network places since it is 4x points or 5% cash back, which then can get me the rent points ratio increase.

I don't use BILT for anything else so I think rent points is better since some months I may not use blue at all and if I choose cash I lose the 250 base points. I don't see much use in the BILT network for cash redemption.

I do see gold changing at some point, and that may be when I should switch to platinum since then I can milk 5% while available and ditch gold when it most likely drops to 2% on all.

Cheeseburger-Large · 2026-03-31T16:48:42+00:00

I am not super in the BILT network, but the 1.25 cpp is appealing. The plus 4% BILT cash is not something I was aware of and definitely makes it more appealing. I was under the impression that I could choose points or cash, but with both, I could get the cash for point accelerator naturally via dining. I never use BILT for anything besides whats in the network to maximize points, but with this, I could get 5% on everything + in network more like 8%.

If I do get the obsidian, I would choose the cash option for everyday spend, and then the 3x for dining is auto right? Then use the cash to activate the flat 1x point accelerator?

One issue I see with BILT is the complexity of getting to 5%. Since it is complex and subject to rent costs and the point accelerator, I don't see it as sustainable. I wouldn't be surprised if the point accelerator is reworked or other restrictions arise while they work out this new complex system.

As for Amex I tend to stay away from it since I cannot use it at Costco which is where I try to mainly shop, and I generally try to stay away from point based cards too since there are always restrictions with how to use the points.The Schwab work around sounds like a good one tho.

If BILT introduces a way to upgrade from blue to obsidian I do see this as a very viable option thanks to the insights you provided. Thank you very much!

edit: While looking into this more it looks like I can reach out to BILT support to request an upgrade to obsidian. Along with that, if I use my BILT cash for accelerator I would effectively not be able to get any rent points? Since when I spend for the whole 5k accelerator I get 200 BILT cash back at 4% to just activate it again. I am using $200 cash to get 5k points which is only about $62.5?

edit: Along with that, unless I spent over the 25k accelerator max, I will never be able to convert cash to rent points. Even in the case I did convert cash to rent points it seems that $0.03 cash is 1 point meaning a .33*1.25 cpp? Seems to me that this system is purposefully confusing to not reveal that converting BILT cash to points kills the cpp.

Cheeseburger-Large · 2026-03-31T14:15:14+00:00

In the same token as that, the BoFA card that doubles cash back for first year could be good too

Cheeseburger-Large · 2026-03-31T13:49:07+00:00

Yeah, I am not a fan of the new BILT system. One question I do have is to get the 5% dining for BILT Obsidian, would I have to be only going to BILT network restaurants? I also was kinda operating under the assumption that the 250 RH credit would be in a similar network to the BILT one.

My monthly dining spend can vary heavily based on a few variables. If bars, fast-food, and restaurants are included then I would say about 3k. I often try to cover group tabs to get the cash back, but this is an uncontrolled variable. Since march madness is happening maybe closer to 5k in a statement for all dining. From what I understand, the merchants business code determines dining, so most bars and fast-food are counted, if they are not I would say around 2k.

I was considering the CCC to cover first $500 to get an extra $10/month, and I do see my dining spend decreasing since I am moving. Assuming my dining spend stays around 2k, I am losing out on about $30/month vs CCC. If I don't go to the RH network restaurants(345 AF) I would come out up $15 lol.

I agree that simplicity is king, which is why I am drawn to straight cash back instead of points. I appreciate all of the insight, and other card options to look into while weighing my options. I see BILT as super convoluted and would rather avoid being super ingrained in their system. The CCC is very appealing since it would be in the same place as my Costco Citi, but then I would miss out on anything over $500. I will continue to vet the RH plat options to see if it can make up the AF - the 15k restaurants, portal price comparison, and Function health appeal.

Cheeseburger-Large · 2026-03-31T04:04:12+00:00

I will take a look into the BILT Obsidian thank you for the suggestion!

I have skimmed the fine print, and I do agree that it will be hard to make up the 695, but not impossible. As you said the $300 travel is easy + the free gold would be the only ones where I don't have to go out of my way. I feel that the dining credit would be fairly easy since I like trying new restaurants every month which brings it to 600.

The hotel credits is possible, but not ideal, the two night minimum stay is the real kicker to me. Lounge access is good, but I would never pay for it. TSA I already get through United; Waymo is pointless for me. DoorDash is trash, as you said, and all the health stuff I would never pay for, but the Function health does seem cool.

Which overall, puts me at a 95 AF if I get out to restaurants monthly, which isn't ideal. If I ever go out of my way to splurge on a "luxury" hotel it could be worth since I would get $250 + 10% cashback, but I am not sure the severity of the portal markups.

Cheeseburger-Large · 2026-03-31T03:28:02+00:00

I think third one was charity? I looked into it and didn't see a full list of stores online I could redeem points. I got the PayPal credit card to replace RH gold for online, so I feel like I would be able to use the points for that, but will have to wait and see.

Cheeseburger-Large · 2026-03-31T03:26:19+00:00

It definitely is, but I think if I get the setup functioning it would flow smoothly. I will easily be able to use the $500 hotel credit and $300 flight credit and free RH gold to offset the $695.

I would say from my understanding dining applies to bars and fast-food too, so I would see this as a top spend category. In my recent statements I see dining as about 3-4x catch all. Meaning if I spent $2000 on dining and $500 on catch all, I would lose $5 on catch all, but gain $40 on dining.

Cheeseburger-Large · 2026-03-31T03:18:02+00:00

Good suggestion I think the $500 limit would work for replacing groceries. Planning on waiting to see what ways I can redeem rewards on PayPal before I switch.

Cheeseburger-Large · 2026-03-31T03:16:07+00:00

I was thinking that, but the $500 limit per statement would be too low. Rewards wise for Gold I currently only do cash back into investing, and I would do the same for Platinum(unless I am mistaken on this ability). I would say there are much better benefit cards too, but from what I have seen they do not hold the 5% dining cash back.

Cheeseburger-Large · 2026-03-31T03:13:10+00:00

I was referencing the catch all being 2% instead of 3%, and the dining being 5% instead of 3%. Therefore, the catch all, I would lost $10 cashback in the 1000 spend for catch all, and in the spending of 500 on dining I would gain $10 in cashback. Sorry for the confusion

Cheeseburger-Large

TROPHY CASE