True cost of rewards calculator
Cash back and points sound like free money. Enter your own spending, rewards rate and interest rate to see what a year with the card really adds up to.
Everything you put on it in a typical year: groceries, gas, bills.
Cash back as a percent. For points or miles, use what a point is worth to you: one cent per dollar spent is 1%.
Find it on your statement under "Interest charge calculation".
The balance left after you pay each month, on average. Enter 0 if you pay in full every month.
Enter 0 if there is none.
Spending you would not have done without the card. We assume none; this is yours to set.
Your numbers never leave your browser. Saved data stays on this device only.
True cost of rewards
$12,000 spent at 2% rewards, 24% APR, $3,000 carried, $0 annual fee. Estimates only.
Three ways to pay
- Cash or debit$0
- This card, paid in full every month$240
- This card, carrying $3,000 on average-$480
Net for a year, compared with paying cash or debit.
What carrying a balance does
- Your net for the year at each average balance
- You are here: $3,000 carried, -$480 net
- Break-even: $1,000 carried
Above the $0 line the rewards win. Below it, interest and fees win.
Why rewards are not free
Rewards are paid for by someone. Part of the fee a store pays each time you swipe goes back to you as cash back or points. Card issuers also earn interest from people who carry a balance from month to month.
That is why the line in the chart slopes down. The rewards are a fixed amount for the year, but the interest grows with every dollar you carry. At a typical card rate, a balance of a few thousand dollars can cost more in interest than the rewards are worth.
How to read your result
Net for the year compares the card with paying cash or debit, which earns nothing and costs nothing. A positive number means the card came out ahead. A negative number means the rewards cost you money.
The break-even balance is the average balance at which interest cancels the rewards. Carry less and you are ahead. Carry more and you are behind. If you are near it, one expensive month can tip you over.
What this calculator leaves out
Sign-up bonuses, category caps, promotional rates and foreign-transaction fees are not included, and rewards are valued at their cash worth. The extra-spending box is empty by default because we do not assume anything about how a card changes what you buy. If you think it does for you, you can try a number and see the effect.