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How to Use the Cash Back Calculator
- Enter Your Spending: Input your average monthly spending across different common categories like groceries, dining, gas, and travel.
- Add Your Cards: Click "+ Add Card" to create a profile for each credit card you want to compare. Give each card a name.
- Set Reward Rates: For each card, enter the cash back percentage (%) it offers for each spending category. Also, enter any annual fee the card may have.
- Calculate & Compare: See a detailed breakdown of which card earns you the most cash back annually, after accounting for any fees.
Strategies to Maximize Your Cash Back Rewards
Use the Right Card for the Right Category: This is the most fundamental strategy. Always use the card that offers the highest cash back rate for the category you are spending in. For example, use Card A for groceries if it offers 5% back, and Card B for dining if it offers 3% back.
Pay Attention to Rotating Categories: Some cards (like the Chase Freedom Flex or Discover it) offer a high 5% cash back rate on categories that change every quarter. Make sure to "activate" these categories each quarter and use that card for all spending in those specific areas.
Always Pay Your Balance in Full: The value of cash back rewards is instantly wiped out if you carry a balance and pay interest. High interest charges will always cost more than the rewards you earn. The golden rule of rewards credit cards is to pay your statement balance in full, every single month.
Frequently Asked Questions (FAQ)
What about sign-up bonuses?
This calculator focuses on the long-term earning potential based on your regular spending. It does not include one-time sign-up bonuses. While sign-up bonuses are a great way to get a large initial value from a card, the long-term rewards rate is what matters for ongoing use.
Is a card with an annual fee worth it?
It can be, but you have to do the math. A card with an annual fee is only worth it if the value of the rewards you earn *exceeds* the cost of the fee. Use this calculator to see if your spending in a card's high-reward categories is enough to offset its annual fee compared to a no-fee alternative.