This quarter my credit card [Discover offers 5% cashback for using Paypal. At the end of the year, it matches all the cashback that I earned and thus I will earn a total of 10% cashback for using Papal linked to my Discover card. At the same time, Paypal charges 2.9% plus $0.30 USD for receiving money.

So if I pay myself $1000 using Paypal, Discover gives me 10% back and it will be $100. At the same time, Paypal charges me $29.3 for receiving this money. Thus I will have a net gain of $70.7.

Will it even work? Or is it just another free money loophole?

  • 1
    you linked to a comment talking about the terms and conditions. Did you read your card's terms and conditions? Jul 27, 2022 at 15:44
  • @user253751, yes and I did not find paying myself with Paypal violates anything.
    – Zuriel
    Jul 27, 2022 at 15:48
  • but will you still get the cashback? Jul 27, 2022 at 15:52
  • @user253751, I don't know. That's why I am asking this question here.
    – Zuriel
    Jul 27, 2022 at 15:56
  • Usually cashback is on actual purchases, not transfers. So you might get cashback if you set yourself a merchant account and pay paypal the merchant commission.
    – littleadv
    Jul 27, 2022 at 15:57

1 Answer 1


According to the Discover promotion page, in the fine print, money transfers are included in the promotion:

PayPal eligible purchases are made through the PayPal wallet online, money transfers via PayPal using your card, and point-of-sale transactions using PayPal Here.

However, it's unclear if this would violate Paypal's terms, in particular this under "Restricted Activities":

... you must not ... Provide yourself a cash advance from your credit card (or help others to do so)

What you suggest sounds like a cash advance, even if it's not really intended to be one. Whether PayPal would object, or would even notice, is unknown (and not in scope here).

However, if you had various things to spend money on that involved sending people money anyway, it seems like this would be entirely permissible (such as, if you pay rent with a roommate and send them money for your half of the rent, or split dinner bills with your partner, or whatnot).

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