Cashback vs Points Calculator
Compare a flat cashback card against a points card by converting points to their real cash value on your actual spending.
How it works
Points value = spend × 12 × points per $1 × value per point · net = points value − extra annual fee · compare to spend × 12 × cashback%
Points are only worth what you can redeem them for, so a fair comparison converts them to cash at your real redemption rate — often well under or over 1 cent each depending on how you use them. Subtracting any extra annual fee the points card carries turns a flashy earn rate into a net number you can set beside plain cashback. Redemption value, not the headline points multiplier, usually decides the winner.
Worked example
On $2,000 a month ($24,000 a year), a 2% cashback card returns $480. A 3×-points card earning 72,000 points redeemed at 1.2¢ each is worth $864, minus a $95 higher fee, for $769 net — beating cashback by $289 a year.
Frequently asked questions
How much is a point actually worth?
It depends entirely on redemption. Cash or statement credit is often 1 cent per point, while transferring to travel partners can be worth more or, redeemed poorly, much less. Use your realistic redemption value, not the best-case one.
When does flat cashback win?
When you redeem points at low value, when the points card charges a higher fee you cannot offset, or when you value simplicity. Cashback is guaranteed and effortless; points only beat it if you redeem them well.
Should I include the annual fee?
Include the difference between the two cards fees, since that is the extra cost of choosing points. A high earn rate can still lose once a large annual fee is subtracted from its net value.
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This calculator is for educational purposes. Double-check important results before acting on them.