Credit card annual fee break-even calculator
Affiliate disclosure: Some pages on this site may link to card offers and earn a commission at no cost to you. This calculator doesn't recommend any card. Not financial advice; card terms change, so verify with the issuer.
Is that annual fee a bargain or a very polite robbery? Enter your spending, the card's earn rates, a conservative value per point and the credits you'd genuinely use, and compare it to a simple cash-back card. Lavish Larry's tip: enter the credits you'd actually use, not the ones in the brochure. Larry did not follow Larry's tip.
Illustration only. Assumes you pay in full every month (interest would wipe out rewards). Excludes sign-up bonuses, which are one-time. Not advice.
How it works
- Points earned = bonus spending × bonus rate + other spending × base rate.
- Card net value = points × your value per point + credits you'd use − annual fee.
- Alternative = total spending × the no-fee cash back rate.
- Break-even value per point = (alternative + fee − credits) ÷ points. Above it, the fee card wins in this illustration; below it, the simple card wins.
- With the default inputs: 54,000 points at 1 cent = $540, minus $95 = $445, versus $600 cash back; break-even is about 1.29 cents per point.
What to do this week
- Run this for every annual-fee card before its renewal date.
- Use the cents per point from redemptions you actually made, not a headline valuation.
- If a card loses, ask the issuer about a no-fee version before cancelling.