Your card economics
Rewards earned vs what the card costs you
The rewards line crosses the cost line around month 4 - after that, the card genuinely pays you.
Your rewards ROI audit
Your rewards card, audited
Spending $1,500/month at 2.00% back earns $360/year. Against the $95 annual fee, your true net is $265/year (1.47% effective return on spend).
The fee math
• Break-even spend for the $95 fee: $396/month. Below that, a no-fee card wins automatically.
• At your spend, the fee is earned back by month 4; everything after is profit.
Squeezing the real ROI
• Pay in full every month - rewards only exist as a rebate on money you'd spend anyway.
• Don't manufacture spending to hit thresholds: 2% back on an unneeded purchase is a 98% loss.
• Re-run this math at renewal each year; issuers count on you never re-checking whether the fee still earns its keep.
How the rewards ROI calculator works
The calculator computes your gross annual rewards from your monthly spend and reward rate, then subtracts the two costs that marketing ignores: the annual fee and - the silent killer - interest on any balance you carry. The result is your true net value per year and your effective return on spend, which is often dramatically lower than the headline rate on the card's landing page.
Two break-even numbers do the heavy lifting. The break-even spend is the monthly spending below which the annual fee eats all rewards - below that line, a no-fee card wins automatically. And if you carry a balance, the comparison usually isn't close: interest at 25% APR on a carried balance can exceed a year of rewards within a couple of months. Rewards are a rebate for people who pay in full; for everyone else they're a distraction from the real number.
Sign-up bonuses complicate the picture in the calculator's favor if you're disciplined: a one-time $500-$1,000 bonus for hitting a minimum spend can dwarf a year of ordinary category rewards, but only counts as real value if the minimum spend threshold is money you'd have spent anyway. Treat the bonus as a one-year windfall in your net-value math, not as evidence the ongoing rate itself is unusually good.
Frequently asked questions
- Is a card with an annual fee worth it?
- Only if your natural spending earns more in rewards than the fee costs - the break-even spend on this page gives the exact line. Re-run the math at every renewal; issuers count on you never re-checking.
- Do rewards matter if I carry a balance?
- Almost never. Carried-balance interest at typical APRs dwarfs reward earnings - 2% back cannot outrun 25% APR. Clear the balance first (our Credit Card Payoff calculator), then optimize rewards.
- Should I spend more to earn more rewards?
- No - manufactured spending to hit thresholds is a 98% loss: you spend $100 you didn't need to earn $2 back. Rewards only have positive value on spending you'd do anyway.
- Cash back or points - which is better?
- Cash back is simple, guaranteed value. Points can be worth more with effort and flexible travel, but their value is set by the issuer and can be devalued. This calculator's math works for both - just enter your realistic redemption rate.
- Do rotating category cards beat flat-rate cards?
- Only if your spending genuinely concentrates in the bonus categories each quarter and you remember to activate them - a common failure point. A flat 2% card with zero activation effort often wins in practice even though the rotating card's peak categories look better on paper.