Cashback Category Optimizer
Add up your monthly spending by category and its cashback rate to see your annual rewards and effective return rate.
How it works
Category reward = spend × rate · Annual = Σ(category rewards) × 12 · Effective rate = total reward ÷ total spend × 100
Cashback is only worth chasing where you actually spend. Multiplying each category’s monthly spend by its bonus rate shows where your rewards really come from, and the blended "effective rate" reveals what your whole wallet earns on average. If most of your money sits in a 1% "everything else" bucket, a card with a high grocery rate may matter less than it seems.
Worked example
Groceries $500 at 3% earns $15/month, gas $150 at 2% earns $3, dining $200 at 4% earns $8, and other $400 at 1% earns $4 — $30 a month, or $360 a year. On $1,250 of monthly spend that is a 2.4% effective rate.
Frequently asked questions
Is a high category rate always worth it?
Only if you spend enough in that category. A 5% grocery card beats a flat 2% card only once your grocery spending is large enough that the extra 3% outweighs a lower rate elsewhere. The effective rate here shows the real blended return.
Do rewards offset an annual fee?
Compare the yearly cashback to the fee. If a $95-fee card earns you $360 a year versus $200 on a no-fee card, the fee card still nets more — but run your own numbers, since it flips at lower spending.
Should I carry a balance to earn rewards?
Never. Interest on a revolving balance dwarfs any cashback rate, so rewards only make sense when you pay the statement in full each month.
Related calculators
Educational estimate, not financial advice. Returns are assumed constant and are not guaranteed.