Cashback vs Low Interest Calculator
Find out whether a cashback credit card or a low interest card will save you more money based on your spending and payment habits.
Calculation Details
Your total annual credit card spending.
The amount you typically pay each month.
Percentage of cashback rewards offered.
The APR on a cashback card.
The APR on a low-interest card (with no cashback).
Comparison Results
Cashback Card
$0.00
-$0.00
$0.00
Low Interest Card
$0.00
-$0.00
$0.00
Results Summary
These calculations are provided as guidance only. For financial decisions, please consult with a qualified financial advisor.
Understanding Cashback vs Low Interest Cards
Credit cards often come with different benefits, with cashback rewards and low interest rates being two popular options. Our calculator helps you determine which type would save you more money based on your spending and payment habits.
Cashback Cards
Cashback credit cards reward you with a percentage of your spending back as cash. However, they typically come with higher interest rates.
- Pros: Earn money on purchases you'd make anyway
- Cons: Usually have higher APRs
- Best for: People who pay their balance in full each month
Low Interest Cards
Low interest credit cards charge less on carried balances but usually offer fewer or no rewards.
- Pros: Lower costs when carrying a balance
- Cons: Few or no rewards on purchases
- Best for: People who regularly carry a balance
How to Use This Calculator
- Enter your annual spending: How much you charge to your credit card in a year
- Input your monthly payment: The amount you typically pay each month
- Specify the cashback rate: The percentage you'd earn with a cashback card
- Enter the standard APR: The interest rate on a cashback card
- Enter the low interest APR: The interest rate on a low-interest card
- Select your currency: Choose your preferred currency
- Click "Compare Options": See which option saves you more money
How We Calculate
For Cashback Cards:
Cashback Earned = Annual Spending × Cashback Rate
Example: $10,000 × 2% = $200 cashback
Average Balance = Annual Spending ÷ 12 - Monthly Payment
(Simplified calculation for illustrative purposes)
Interest Paid = Average Balance × Standard APR
Example: $500 × 19% = $95 interest per year
Net Benefit = Cashback Earned - Interest Paid
For Low Interest Cards:
Rewards = $0 (typically no cashback)
Average Balance = Annual Spending ÷ 12 - Monthly Payment
(Same as cashback card calculation)
Interest Paid = Average Balance × Low Interest APR
Example: $500 × 12% = $60 interest per year
Net Benefit = 0 - Interest Paid
When Each Type Is Better
Cashback Cards Win When:
- You pay your balance in full most months
- You have high spending in cashback categories
- The cashback earned exceeds the extra interest paid
Low Interest Cards Win When:
- You regularly carry a balance
- The interest savings exceed potential cashback rewards
- You're focused on paying down existing debt
Smart Credit Card Strategies
Mix and Match: Some people benefit from having both types of cards—using cashback cards for everyday purchases they'll pay off immediately, and low-interest cards for larger purchases they'll pay over time.
Watch for Promotional Periods: Many cards offer 0% APR introductory periods, which can be valuable for large purchases or balance transfers.
Consider Annual Fees: Some premium cashback cards charge annual fees. Make sure the rewards outweigh these costs.
Be Realistic: Base your decision on your actual payment habits, not what you plan to do ideally.
Note: This calculator provides estimates based on simplified calculations and is designed for guidance only. Credit card terms, interest calculations, and rewards programs vary. For important financial decisions, we recommend consulting with a qualified financial advisor.