Is a high annual fee card worth it?

Only if your actual spending pattern earns enough to clear the fee, which the break-even spend figure shows. A card optimised for spending you do not do is worth nothing.

Do rewards matter if I carry a balance?

No. Credit card interest runs far above any reward rate, so a revolving balance loses money regardless of what you earn on it.

Everydayfinance

Credit Card Rewards Value Calculator

Credit card rewards net of the annual fee, with the monthly cap applied. Headline accelerated rates are almost always capped, and the cap is what determines the real return.

Also called: card rewards calculator, best credit card for me.

Net annual value

₹19,000

₹19,000 a year after the 5,000 fee, from ₹24,000 of rewards. The effective return on ₹7,92,000 of spending is 2.4%. The monthly cap costs you 3720 a year: you would earn more without it.

Rewards before the fee

₹24,000

Annual spend

₹7,92,000

Effective reward rate

2.4%

First year, with the welcome benefit

₹24,000

Lost to the monthly cap

₹3,720

Spend needed to cover the fee

₹1,00,000

On the cap

The monthly cap costs you 3720 a year: you would earn more without it.

How this is calculated

Method and background

How this is calculated

Each category earns at its own rate, the total is capped monthly, and the annual fee comes off. The cap is the part that matters: a card advertising five percent on dining with a two thousand rupee monthly cap returns five percent only until the cap binds, after which the marginal rate is whatever the base rate is. The effective rate shown here is the number to compare between cards, and the first year figure is separated because a welcome benefit does not repeat.

rewards by category, capped monthly, less the annual fee

s: Spend by category
r: Reward rate

Worked examples

Each of these is asserted on every build. If a change to the engine ever moved one of these answers, the build would fail before the page could print it.

a rewards card at typical spend

Monthly spend by category: 25000, 12000, 8000, 15000, 6000
Reward rate for each category (%): 5, 1, 2, 4, 3
Annual fee: ₹5,000
Welcome benefit value, first year only: ₹5,000
Monthly cap on rewards: ₹2,000
Value of one reward point: 0.25

Net annual value₹19,000

The cap of 2,000 binds: uncapped rewards would be 2,310 a month

Open this example

no cap keeps everything earned

Monthly spend by category: 25000, 12000, 8000, 15000, 6000
Reward rate for each category (%): 5, 1, 2, 4, 3
Annual fee: ₹5,000
Welcome benefit value, first year only: ₹5,000
Monthly cap on rewards: ₹0
Value of one reward point: 0.25

Net annual value₹22,720

boundary

Open this example

Method and limits

What it assumes

A single overall monthly cap. Real cards often cap by category.

What it deliberately does not model

Points expire and redemption options vary, so the point value is an input you must set honestly.
This assumes the balance is paid in full. Interest at credit card rates dwarfs any reward.

Formula version 1.0.0 · definition 1.0.0 · India · Report a problem with this calculator

Frequently asked questions

Is a high annual fee card worth it?: Only if your actual spending pattern earns enough to clear the fee, which the break-even spend figure shows. A card optimised for spending you do not do is worth nothing.
Do rewards matter if I carry a balance?: No. Credit card interest runs far above any reward rate, so a revolving balance loses money regardless of what you earn on it.