Cash Back Calculator

How to Use This Cash Back Calculator

Our cash back calculator helps you compare credit card rewards based on your actual spending habits. Enter your monthly spending in each category, then customize up to 3 credit cards with their specific rewards rates, annual fees, and sign-up bonuses. The cash back calculator will show you which card maximizes your rewards and whether annual fee cards are worth it for your spending level.

Understanding Cash Back Rewards

• Flat Rate Cards: Earn the same percentage on all purchases (typically 1.5-2%)
• Category Bonus Cards: Earn higher percentages in specific categories (3-6% on groceries, gas, etc.)
• Rotating Category Cards: Bonus categories change quarterly (not modeled in this cash back calculator)
• Tiered Rewards: Higher rates up to spending caps (this calculator assumes no caps)

Are Annual Fee Cards Worth It?

Annual fee cards often offer higher rewards rates and valuable perks. Use this cash back calculator to determine if the extra rewards justify the fee. Generally:

• High Spenders: Annual fee cards often worth it if you spend $20,000+ annually
• Category Alignment: Worth it if your spending aligns with the card's bonus categories
• Break-Even Analysis: The cash back calculator shows how much you need to spend to justify the fee
• Additional Perks: Consider travel credits, lounge access, and other benefits beyond cash back

Maximizing Sign-Up Bonuses

Sign-up bonuses can provide significant value in your first year. This cash back calculator factors in these bonuses if you meet the minimum spending requirement. Tips for earning bonuses:

• Plan large purchases around new card applications
• Never overspend just to earn a bonus
• Set calendar reminders for spending deadlines (typically 3-6 months)
• Consider business expenses or bills you can pay with the card

Multiple Card Strategy

Many rewards optimizers use multiple cards to maximize returns in each category. For example:

• Card A: 5% groceries, 3% gas
• Card B: 4% dining, 3% travel
• Card C: 2% everything else (catch-all card)

While this cash back calculator compares cards individually, using the right card for each purchase can significantly increase rewards.

Cash Back vs Points vs Miles

This is a cash back calculator focused on straightforward cash rewards. However, consider:

• Cash Back: Simple, flexible, exact value (1% = $1 per $100 spent)
• Points: Can be worth more when redeemed for travel (1.25-2¢ per point)
• Miles: Best for frequent travelers, complex redemption, potential for high value
• Hybrid Cards: Some cards let you choose between cash and travel redemption

Important Cash Back Rules

• Pay in Full: Interest charges will always exceed rewards - pay your balance in full every month
• Don't Overspend: Never buy something just for rewards - you're still spending 95-99% of the purchase price
• Read Terms: Bonus categories may have caps, exclusions, or activation requirements
• Track Progress: Monitor spending to ensure you're hitting bonus category caps and sign-up requirements
• Protect Your Score: Opening too many cards at once can hurt your credit score