How it works
Credit card marketing sells points and miles; the honest comparison is a single number — net annual value. This tool computes it for both cards the same way: rewards earned on your spend, plus the sign-up bonus (valued in cash, once), minus the annual fee, minus the interest you actually pay on any balance you carry. Enter the numbers from the two cards you are choosing between and the tool shows which one leaves more money with you. The carried-balance field is the one most people skip, and the one that changes the answer most. At a 22% APR, carrying a $3,000 balance costs about $660 a year — more than a 2% card earns on $33,000 of spend. If you carry a balance at all, the lower-APR card almost always wins, and rewards become a distraction. The break-even spend line shows the flip side: how much you must spend each month before a higher-rewards card overcomes its higher annual fee. That figure often runs into the thousands, which is why the no-fee flat-rate card is quietly the right answer for most people. Re-run with both bonuses set to zero to see which card wins in year two, once the sign-up incentive has been spent.
Formula
Net value = spend x rewards% + bonus - fee - balance x APR | Break-even spend = fee gap / rewards gap
Tips
- If you carry a balance, choose on APR and ignore rewards — 2% back cannot outrun 22% interest.
- Value a sign-up bonus in cash, once. A $750 bonus is a year-one windfall, not a reason to keep a $95 fee forever.
- Run the year-two comparison with both bonuses at zero before committing to a fee.
- Flat-rate cards win unless your spend is heavily concentrated in a bonus category you can verify.
- Rewards are only worth their redemption value — check what a point actually converts to before trusting the headline rate.
Frequently asked questions
- Is a credit card annual fee worth it?
- Only if the extra rewards and credits it unlocks exceed the fee, computed on your real spend. A $95 fee on a 3% card needs roughly $6,300 of qualifying spend a year just to match a free 2% card — below that, the no-fee card wins.
- Cash back or travel points — which is better?
- Cash back is better for most people because it has a fixed, verifiable value. Points only beat cash when you redeem them at above their cash-equivalent rate, which takes effort and flexibility. If you cannot name the redemption you will use, take the cash.
- How much do credit card rewards actually earn?
- Between 1% and 2% of spend for most cards, after accounting for the categories that earn less. A 2% flat card earns $600 a year on $2,500 of monthly spend — real money, but far less than the interest on a carried balance of the same size.
- Should I choose a card for the sign-up bonus?
- Treat it as a tie-breaker, not the decision. A $750 bonus on a card you keep for two years is $375 a year, which can flip a close comparison — but it disappears after year one, so the ongoing net value is what determines whether the card stays in your wallet.
- What matters more, APR or rewards?
- APR, the moment you carry a balance. Rewards top out around 3-5% of spend; APR starts around 20%. One month of interest on a $5,000 balance costs more than a year of rewards on typical spend.