Cashback Calculator

1. Enter the amount spent on the purchase or statement.
2. Enter the cashback rate for that purchase or category.
3. Optionally add your annual spend at this rate to project a year of rewards.
4. Read the cashback earned, the effective price after rewards and your yearly cashback.

Here is what each result means:

Cashback is a reward that returns a small percentage of what you spend, usually on a credit or debit card, as money back rather than points or miles. A 2 percent rate means every 100 you spend returns 2, which you receive as a statement credit or a deposit.

It is popular because it is simple and flexible, with no need to redeem points for travel or gift cards. Cashback only benefits you if you pay the balance in full, because card interest is far larger than any reward rate, and caps or categories can limit how much you actually earn.

It multiplies your spend by the cashback rate to find the reward, subtracts that from the amount for the effective price, and applies the rate to your annual spend for a yearly projection.

1. Multiply the amount by the rate divided by 100.
2. Subtract the cashback from the amount for the effective price.
3. Multiply your annual spend by the rate for a year of rewards.

Suppose you spend 1,000 on a card that pays 2% cashback, and your yearly spend at that rate is 12,000.

Calculation: cashback = 1,000 x 2% = 20. Effective price = 1,000 - 20 = 980. Yearly cashback = 12,000 x 2% = 240.

A 5 percent category rate on the same 1,000 would return 50 instead of 20, which is why matching the card to where you spend most matters more than the headline rate.

Rates are just a percentage of spend, so the reward scales directly with how much you put on the card.

Because cashback is a straight percentage, you can check any rate quickly with the percentage calculator.

The headline rate is only the start; several things decide what you actually keep.

Spending Categories

Many cards pay a high rate only in rotating or capped categories and a base rate elsewhere. Match the card to your biggest spend.

Caps and Limits

Bonus rates often stop after a quarterly or annual cap, after which you earn the base rate. Read the limits before assuming a rate.

Interest and Fees

Carrying a balance or paying an annual fee can wipe out rewards. A 2 percent reward is meaningless next to 20 percent interest.

Rewards come in different forms, and cashback is the most straightforward.

Cashback lowers the effective price, much like a discount. To compare it against a sticker price that includes tax, use the sales tax calculator.

Choosing a Card

Project a year of rewards at each card rate against your real spending to see which pays most.

Comparing a Big Purchase

Check how much a large buy earns back and what it truly costs after cashback.

Weighing a Rate Against a Fee

See whether the yearly cashback beats an annual fee. Compare a discount instead with the discount calculator.

1. Chasing Rewards While Carrying a Balance

Interest dwarfs cashback. If you do not pay in full, a rewards card usually costs you money.

2. Ignoring Caps and Categories

A headline 5 percent may apply only to limited spend. Your blended rate is often much lower.

3. Overspending to Earn Rewards

Spending more to earn cashback is a loss. The reward is a fraction of what you spend.

4. Forgetting the Annual Fee

A fee can outweigh the rewards unless your spending is high enough to cover it.

5. Treating Cashback as Free Money

It is a rebate on spending you were going to do anyway, not a reason to buy more.

The math is exact for the figures you enter, but real card rewards depend on terms this estimate cannot see.

Not all cashback works the same way, and the structure decides which card actually pays you most.

Flat-rate

The simplest kind pays the same percentage, often 1.5 or 2 percent, on everything. There is nothing to track, which makes it a strong default for people who do not want to think about categories.

Tiered

These pay different rates for different categories, for example 3 percent on groceries, 2 percent on fuel and 1 percent on everything else. They reward matching the card to where you spend, but you earn the base rate on anything outside the bonus categories.

Rotating

Some cards offer a high rate, often 5 percent, in categories that change each quarter and usually require activation and a spending cap. They can be lucrative for the organised, and mediocre for anyone who forgets to activate or spends outside the current category.

The best structure depends entirely on your habits. A predictable, concentrated spender benefits from tiered or rotating cards; a broad, hands-off spender usually does better with a flat rate.

The single rule that makes cashback worthwhile is to pay the balance in full every month. Beyond that, a few habits raise your effective rate.

Match your main card to your biggest spending category, and consider a second card to cover a different category if the maths justifies it. Activate rotating bonuses on time and note the caps so you know when a category drops to the base rate. Use the card for planned, budgeted spending rather than treating rewards as a reason to buy more, since spending an extra 100 to earn 2 back leaves you 98 worse off. And redeem your cashback rather than letting it expire or sit unused.

Done well, cashback is a small, steady rebate on spending you would do anyway. Done badly, it is a marketing tool that nudges you into interest and extra purchases that dwarf the rewards.

A cashback rate never exists in isolation. Two costs can quietly turn a rewards card into a losing proposition.

The first is interest. Cashback rates of 1 to 5 percent are trivial next to credit card APRs that often run 20 percent or more. Carry a balance for a few months and the interest erases a year of rewards. The second is the annual fee. A card paying a higher rate may charge a fee that only pays off above a certain spend. To check, divide the annual fee by the extra reward rate over a no-fee card, and see whether your yearly spend clears that threshold.

The rule of thumb is simple: cashback is only real if you pay in full and the fee, if any, is covered by your spending. Otherwise a plain no-fee card, or no card debt at all, wins.

Cashback is not exclusive to credit cards. Some debit cards and current accounts offer it, and the calculation is identical, amount multiplied by rate.

Debit and account cashback tends to be lower and more conditional, sometimes tied to minimum monthly deposits, a set number of transactions, or specific retailers. Its advantage is that it carries no risk of interest, since you are spending your own money, which makes it a safer option for anyone who prefers not to use credit. Retailer and app-based cashback schemes work similarly, paying a percentage back on purchases through particular shops, and can stack with a rewards card, though they often come with redemption thresholds and delays.

Headline sign-up offers can be worth more than a year of ordinary cashback, but they come with conditions worth reading closely.

A typical bonus requires spending a set amount within the first few months to unlock a lump sum or an elevated rate. If that spend fits your normal budget, the bonus is close to free money; if it tempts you to spend more than you would have, the cost outweighs it. Introductory rates work the same way, offering a boosted percentage for an initial period before reverting to the standard rate. Note the end date, and never let a promotion push you into carrying a balance, since promotional cashback almost never survives contact with everyday interest charges.

Suppose you spend about 20,000 a year, roughly 6,000 of it on groceries. Card A pays a flat 2 percent with no fee. Card B pays 5 percent on groceries and 1 percent elsewhere, with a 60 annual fee.

Card A: 20,000 at 2 percent is 400 a year, with no fee, so 400 net.

Card B: 6,000 groceries at 5 percent is 300, plus 14,000 elsewhere at 1 percent is 140, totalling 440, minus the 60 fee, so 380 net.

Despite the flashier 5 percent headline, Card A quietly wins for this spender once the fee and the low base rate are included. Change the numbers, say a much larger grocery spend, and Card B pulls ahead. This is exactly the comparison the calculator is built to make quick.

Multiply the amount you spend by the cashback rate. For example, 1,000 spent at 2 percent returns 1,000 times 0.02, which is 20. To project a year, multiply your annual spend by the rate.

Flat-rate cards commonly pay 1.5 to 2 percent on everything, while category cards can pay 3 to 5 percent on specific spend. A higher rate is only better if it applies to where you actually spend and has no offsetting fee.

No. It is a rebate on money you were already spending, so it only benefits you if you pay the balance in full. Interest on a carried balance far exceeds any cashback rate.

Subtract the cashback from the amount spent. If a 1,000 purchase earns 20 in cashback, the effective price is 980. It shows the true cost after the reward.

Often yes. Many cards cap bonus categories at a quarterly or annual spend, after which you earn a lower base rate. Always check the cap so you do not overestimate your rewards.

Cashback is simpler and more flexible, while points and miles can be worth more to frequent travellers who redeem carefully. The best choice depends on how you spend and whether you value simplicity.

It can. Divide the annual fee by your reward rate to find the spend needed to break even. If your yearly spend is below that, a no-fee card usually wins.

The reward mechanics are the same, but debit cashback tends to be lower and less common than on credit cards. The calculation of amount times rate still applies, and it carries no risk of interest since you spend your own money.

Flat-rate pays the same percentage on everything, which is simple and hands-off. Tiered pays higher rates in specific categories and a lower base rate elsewhere, rewarding you for matching the card to where you spend most.

They can be, often worth more than a year of ordinary rewards, but only if the required spend fits your normal budget. If a bonus tempts you to spend more than you otherwise would, its real cost usually outweighs the reward.

Estimate your yearly spend, split it by category, apply each card rates, then subtract any annual fee. The card with the higher net figure wins. A flat-rate no-fee card often beats a flashier tiered card for broad spenders.

No. The calculation runs entirely in your browser and nothing you enter is stored or sent anywhere unless you choose to Save a result, which stays only in this browser.

• How credit card rewards work (Corporate Finance Institute).
• Credit cards: shopping for a card (US SEC Investor.gov).
• Percentage basics (Corporate Finance Institute).