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Cash Back or Low Interest Calculator
by tools1
2025. 9. 3.
Cash Back vs Low Interest Calculator
Cash Back vs. Low Interest Calculator
Which credit card strategy saves you more?
Enter Your Details:
Your Average Monthly Credit Card Spending: $_______
Current Credit Card Balance (if any): $_______ (for interest calculations)
Option 1: Cash Back Card
Cash Back Rate: _______% (e.g., 2%)
Annual Fee: $_______ (if any)
Option 2: Low-Interest Card
APR (Interest Rate): _______% (e.g., 12%)
Annual Fee: $_______ (if any)
Do You Carry a Balance?
✅ Yes (calculate interest savings)
❌ No (compare cash back only)
Calculate Your Savings:
💰 Cash Back Card Annual Earnings: $_______ (rewards – fees)
💳 Low-Interest Card Annual Savings: $_______ (interest avoided – fees)
📊 Better Option: Cash Back or Low Interest
(Based on your spending habits and debt!)
How It Works:
If You Pay in Full Monthly (No Balance):
Cash Back Wins: Earn 2% on $1,000/month = $240/year.
Low-Interest Card: $0 savings (no interest charged).
If You Carry a $5,000 Balance:
Low-Interest Wins: 12% APR vs. 22% APR = $500 saved/year.
Cash Back (2% on spending): $120 – $500 interest = -$380 net loss.
Example Calculation:
Monthly Spending: $1,500
Balance: $3,000
Cash Back Card: 2% back, $0 fee → $360/year rewards
Low-Interest Card: 9% APR vs. 22% (saves $390/year)
Winner: Low-Interest Card (saves $30 more)
Key Factors:
✔ Paying in Full? → Cash Back is better.
✔ Carrying Debt? → Low-Interest saves more.
✔ Annual Fees: Can negate benefits!
Try It:
🔹 Spend $2,000/month, $0 debt → Cash Back: $_______/year
🔹 Spend $1,000/month, $4,000 debt → Low-Interest Saves: $_______/year
(Note: Assumes consistent spending/balances. For exact numbers, use your card terms.)
