Cash back is the purchase times the card's reward rate, paid back to you after you buy. At 3%, an $80 purchase earns $2.40, so it really costs you $77.60.
Many cards cap their best rate, though. Enter the cap, and the calculator shows the rate you really earn. It also shows where the cap kicks in and what that costs you. The headline, effective cost, is the price after the reward. Compare it with a straight store discount in the discount calculator.
Enter the cap as cash back, not as spending
Card terms state caps as a spending limit. On Chase Freedom Flex, "5% is earned on up to $1,500 in combined purchases in the bonus categories each quarter." The Discover it card uses the same $1,500 quarterly limit.
The calculator's cap field wants the most cash back you can earn, so multiply: $1,500 × 5% = $75. Discover spells it out: "That's up to $75 cash back each quarter." The American Express Blue Cash Preferred card pays 6% at U.S. supermarkets on up to $6,000 a year. That's a $360 cap.
Enter spending for the same period as the cap. Use one quarter's bonus-category spending for a quarterly cap, and a full year's for a yearly one.
"Over twelve months" appears only without a cap
That line multiplies the reward by 12, as if you entered a month's spending. Enter a cap, and the line disappears: the calculator can't tell a monthly cap from a quarterly one. For a quarterly cap, multiply the reward by four yourself. For a yearly cap, the reward shown is already the year's total.
How fast a cap waters down 5%
Here's a 5% bonus with a $75 cap, at four levels of bonus spending in one quarter:
| Bonus spending in the quarter | Cash back | Effective rate |
|---|---|---|
| $1,000 | $50 | 5.00% |
| $1,500 | $75 | 5.00% |
| $2,500 | $75 | 3.00% |
| $4,000 | $75 | 1.88% |
Up to $1,500, you earn the full 5%. After that, the reward stays at $75 while spending keeps growing, so the effective rate falls. At $4,000 of bonus spending it's 1.88%, not 5%. Each row follows these steps:
The calculator stops at the cap, but your card may not
Past the cap, the calculator adds nothing. It then reports the reward lost to the cap: what the full rate would have paid, minus the cap.
| Card rule | Spending | Cap reached at | Lost to the cap |
|---|---|---|---|
| 5% bonus, $75 a quarter | $4,000 | $1,500 | $125 |
| 6% supermarkets, $360 a year | $9,000 | $6,000 | $180 |
Treat that loss as the worst case. American Express says outright that its 6% applies to the first $6,000, "then 1%". Chase pays 1% on all other purchases.
To price a real card, run the calculator twice. Enter spending up to the cap at the bonus rate, then the rest at the base rate. Here's $9,000 a year at supermarkets on the 6% card:
| Supermarket spending | Amount | Rate | Cash back |
|---|---|---|---|
| Up to the cap | $6,000 | 6% | $360 |
| Above the cap | $3,000 | 1% | $30 |
That's $390 in all, an effective 4.33% ($390 ÷ $9,000). You end up $150 short of a full 6%, not $180.
When a flat 2% card pays as much as a 5% card
Think of both cards as 1% on everything plus an extra. The rotating card's extra is 4 percentage points on $1,500 of bonus spending. That's $60 a quarter at most (4% × $1,500).
A flat 2% card's extra is 1 percentage point on every dollar you spend. The two extras match at $6,000 of total spending a quarter (1% × $6,000 = $60), about $2,000 a month. Spend more and the flat card pays more, even if you max out every bonus. Spend less and a maxed-out bonus keeps the rotating card ahead. If your bonus spending is under $1,500, the break-even drops to four times that amount.
Carrying a balance costs more than the reward
Cash back only comes out ahead if you pay the statement in full. Card accounts charged interest averaged a 22.15% rate in the second quarter of 2026, the Federal Reserve reports.
At that rate, one month's interest on a $2,000 balance is about $36.92 (2,000 × 22.15% ÷ 12). A 2% reward on the same $2,000 is $40. By the second month, the interest has overtaken the reward.
The credit card interest calculator runs this on your own balance and APR. If you already carry a balance, the balance transfer calculator shows what moving it would cost.
An annual fee comes off the top
The Blue Cash Preferred card charges $0 in the first year, then $95. To see the spending that covers a fee, divide it by the extra rate you'd earn over a no-fee card.
Say your alternative is a no-fee 2% card and you count supermarkets only. The extra is 4 points, so $95 ÷ 4% = $2,375 of supermarket spending a year. Spend less than that and the fee eats the whole bonus.
Cash back you can still lose
Rewards cards are the norm. About three in four general purpose credit card accounts are rewards cards. That comes from a May 2024 report by the Consumer Financial Protection Bureau (CFPB).
Complaints it reviewed showed four ways people lost promised rewards: unexpected promotional conditions, devaluation, redemption problems and revocation. Devaluation means you need more points for the same redemption. Revocation means the issuer takes back rewards you had already earned. In the worst cases, the issuer closes the account and the rewards go with it.
So redeem as the cash builds up rather than saving it for later. And note every activation deadline: for Chase's October to December 2026 categories, it's December 14.
Sources
- Chase, Chase Freedom Announces Q4 2026 5% Cash Back Categories (September 15, 2026)
- Discover, 5% Cash Back Calendar (accessed September 26, 2026)
- American Express, Blue Cash Preferred Card (accessed September 26, 2026)
- Federal Reserve, G.19 Consumer Credit, terms of credit (September 8, 2026)
- CFPB, Issue Spotlight: Credit Card Rewards (May 2024)