Should you take dealer cash back or a lower interest rate offer? This calculator tells you which option saves more money.
This tool calculates how much cash back you'll earn on purchases based on your card's cash back percentage rate and spending amount, helping you understand and compare the value of different cash back credit card offers.
Cash Back Earned = Purchase Amount × (Cash Back Percentage ÷ 100). For cards with tiered or category-specific rates, each category's spending is calculated separately at its applicable rate, then summed for total cash back earned.
Enter your spending amount and the cash back percentage rate (or enter spending by category if your card has different rates for different purchase types), and the calculator returns your total cash back earned.
Example: Spending $2,000 in a month on a card offering 2% flat cash back earns $2,000 × 0.02 = $40 in cash back for that month.
Why do some cash back cards offer different rates for different categories? Category-based cash back cards (like extra rewards on groceries or gas) let card issuers target specific consumer spending behaviors, and can offer higher effective returns for cardholders whose spending aligns well with the bonus categories.
Is a flat-rate or category-based cash back card better? This depends on your individual spending patterns — category cards can earn more if your spending concentrates in bonus categories, while flat-rate cards offer simplicity and consistent value across all types of purchases.
Does cash back count as taxable income? In most cases, cash back on personal spending is treated as a rebate or discount rather than taxable income, though tax treatment can vary by jurisdiction and specific circumstances, so it's worth checking current tax guidance if uncertain.
Are there spending caps on cash back category bonuses? Yes, many cards impose a quarterly or annual spending cap on bonus-category cash back, after which the rate typically drops to a lower base rate — it's important to check your specific card's terms for these limits.
Should I prioritize cash back over other credit card rewards, like travel points? This depends on personal preference and how you plan to use rewards — cash back offers straightforward, flexible value, while travel points can sometimes offer higher redemption value if used strategically for travel.