★ MONEY · CREDIT CARDS · COMPARISONS
Spending $1,500 a month at 2% rewards earns $360.00 a year on a credit card — and costs nothing in cash. But carry a $1,000 balance at 24.99% APR and interest takes $249.90 of it back. Change the spending, rewards rate, annual fee, carried balance, or APR and the calculator re-runs the whole comparison, including the break-even balance where cash takes the lead.
Spending $1,500 a month at 2% rewards, no annual fee, no carried balance, 24.99% APR: rewards $360.00, interest $0.00, card net +$360.00 vs cash $0.00 — the credit card wins by $360.00 a year. The calculator below runs your numbers at any spending, rate, fee, balance, or APR.
The comparison has three moving parts, and only three. The card earns rewards on what you spend: annual rewards are 12 × monthly spending × the rewards rate. The card charges interest on what you carry: annual interest is the carried balance × the APR, simple interest on the balance held all year. And the card may charge an annual fee. Card net is rewards minus fee minus interest. Cash has no rewards, no interest, and no fee, so cash net is always $0. Whichever net is higher wins, and the difference is the size of the win. Two extra numbers make the decision sharp: the break-even carried balance, where interest exactly eats rewards minus fee, and the break-even rewards rate, the rate the card would need to cover the fee plus the interest on the balance you carry.
At the defaults the card wins easily: $1,500 a month at 2% is $360.00 of rewards a year, with no fee and no carried balance, so the card nets +$360.00 against cash at $0.00. But the win is fragile, because interest is charged at roughly twelve times the rewards rate: 24.99% APR against a 2% rewards rate. Every dollar carried costs about twelve times what a dollar spent earns. That is why the whole question turns on one habit — whether you pay in full.
Setup: monthly spending $1,500.00; rewards rate 2%; annual fee $0.00; carried balance $0.00; card APR 24.99%.
Line 1 — annual rewards. 12 × $1,500.00 × 2% = $360.00.
Line 2 — annual interest. $0.00 × 24.99% = $0.00.
Line 3 — card net. $360.00 − $0.00 − $0.00 = +$360.00.
Line 4 — cash net. No rewards, no interest, no fee = $0.00.
Line 5 — the winner. +$360.00 beats $0.00, so the credit card wins by $360.00 a year.
Line 6 — the flip. Break-even carried balance = ($360.00 − $0.00) / 0.2499 = $1,440.58. Carry more than that and cash wins.
Line 7 — the reverse. With no balance carried and no fee, the break-even rewards rate is 0.00% — any positive rewards rate wins. Carry $1,500 at 24.99% and the rate needed is 2.08% (interest $374.85 / $18,000 of annual spending).
Carry $1,000 at 24.99% APR: interest is $249.90, so card net is $360.00 − $249.90 = +$110.10 — the card still wins, by $110.10. A four-figure balance eats two-thirds of the rewards but not all of them.
Carry $2,500 at 24.99% APR: interest is $624.75, so card net is $360.00 − $624.75 = −$264.75 — cash wins by $264.75. Once the balance passes $1,440.58, every extra dollar carried is pure loss.
$95 annual fee, 2% rewards, no balance: card net is $360.00 − $95.00 = +$265.00 — the card still wins by $265.00. A fee only bites when the rewards are small or a balance is carried too.
1% flat rewards, no fee, no balance: rewards are 12 × $1,500 × 1% = $180.00 — the card wins by $180.00. Even the plainest 1% card beats cash when you pay in full.
5% on a $300-a-month category plus 1% on the other $1,200 a month: the category earns $300 × 12 × 5% = $180.00 and the rest earns $1,200 × 12 × 1% = $144.00, for total rewards of $324.00 a year — less than flat 2% on everything, because only a fifth of the spending gets the high rate.
Reverse — the 2.08% break-even rate: carry $1,500 at 24.99% and interest is $374.85. To cover that with no fee, the card needs a rewards rate of $374.85 / $18,000 = 2.08%. A 2% card loses by a hair at that balance; a 2.5% card wins.
Flip — the $1,440.58 break-even balance: at 2% rewards, $0 fee, and 24.99% APR, the balance where interest exactly eats the $360.00 of rewards is $360.00 / 0.2499 = $1,440.58. Below it the card wins; above it cash wins.
Rewards are calculated on all spending at one flat rate, with no caps, no rotating categories, and no sign-up bonus; real cards often pay more on some categories and less on others, and a big sign-up bonus can dwarf a whole year of rewards. Interest is simple interest on the carried balance held all year: real cards charge interest on the average daily balance, and new purchases can lose their grace period when you carry a balance, so real interest is usually higher than the number here. The carried balance is treated as constant; a balance that grows or shrinks through the year changes the interest. Cash discounts and card surcharges are not in the model: a store that charges 3% extra for cards or gives 3% off for cash changes the answer directly. Taxes are ignored: cash-back rewards are generally not taxed, and interest is not deductible. Rounding convention: money is rounded to cents and all figures are computed from unrounded values, rounded only for display.
| Output | Formula | What it means |
|---|---|---|
| Annual rewards | 12 × monthly spending × rewards rate | $360.00 a year at the defaults. |
| Annual interest | carried balance × APR | $0.00 a year — no balance carried. |
| Card net | rewards − fee − interest | +$360.00 a year at the defaults. |
| Cash net | always $0 | $0.00 — cash earns nothing and costs nothing. |
| Winner by | |card net − cash net| | $360.00 a year — the card wins. |
| Carry $1,000 | same math, $1,000 carried | $249.90 interest; card net +$110.10. |
| Carry $2,500 | same math, $2,500 carried | $624.75 interest; card net -$264.75. |
| $95 fee | rewards − $95 | +$265.00 — card still wins. |
| 1% flat | 12 × $1,500 × 1% | +$180.00 — card still wins. |
| 5% category | $180.00 + $144.00 | $324.00 a year of rewards. |
| Break-even balance | (rewards − fee) / APR | $1,440.58 — carry more and cash wins. |
| Break-even rate | (fee + interest) / annual spending | 0.00% at the defaults; 2.08% with $1,500 carried. |
The math is exact for the numbers you enter: annual rewards are 12 × monthly spending × the rate, annual interest is the carried balance × the APR, card net is rewards minus fee minus interest, and the break-even balance and rate are the two equations solved in the other direction. But the model is simplified on purpose. Real cards charge interest on the average daily balance, not a flat annual balance, and new purchases may lose their grace period when you carry a balance, so real interest is usually higher than this calculator shows. Rewards often exclude some categories, cap the high rate, or pay out as points worth less than their face value. Cash discounts and card surcharges vary by merchant and are not in the model: a 3% card surcharge at your usual store beats a 2% rewards rate. A sign-up bonus is not included and can dwarf a year of ordinary rewards. Read the cash vs credit card guide for the full picture.
Bright Side Kit. "Cash vs Credit Card Calculator: Rewards vs Interest" https://brightoolbox.com/cash-vs-credit-card/ Accessed October 24, 2026.Pay in full — carrying a balance is what flips the card from winner to loser. At the defaults the card wins by $360.00 a year with no balance carried. Carry $1,000 and the win shrinks to $110.10; carry $2,500 and cash wins by $264.75. The break-even balance is $1,440.58 — below it the card wins, above it cash wins.
Only if the discount is smaller than 2%. A store that knocks 3% off for cash beats a 2% card by a full point on every dollar, so cash wins there. A 1% cash discount loses to a 2% card. Compare the two percentages directly: the bigger one wins, whichever side it sits on.
Any APR, once the balance is big enough — the balance matters more than the rate. At 2% rewards and no fee, the card breaks even when the carried balance reaches $1,440.58 at 24.99% APR. At a lower 18% APR the break-even balance rises to $2,000.00 ($360.00 / 0.18); at 29.99% it falls to $1,200.40. The rate sets the tipping point, but the balance decides which side of it you stand on.
Yes, when your spending is high enough to cover them. At $1,500 a month and 2% rewards, a $95 fee still leaves the card +$265.00 a year ahead of cash. The fee only loses when the rewards are smaller than the fee: at $300 a month and 2%, rewards are $72.00, so a $95 fee flips the card to a $23.00 loss and cash wins.
Credit, if you pay in full — debit earns nothing. The same $1,500 a month on a debit card earns $0 of rewards, exactly like cash, while the credit card earns $360.00 at 2%. Debit also pulls money straight from your account, so a fraud hold hits your cash, while credit puts the bank's money between you and the merchant. The only reason to pick debit is if you cannot trust yourself to pay the credit card in full.
The math is the same; the amounts are just smaller. At $300 a month and 2%, the card earns $72.00 a year instead of $360.00 — still more than cash's $0, so the card still wins. What changes is the fee: a $95 annual fee wipes out $72.00 of rewards and leaves the card $23.00 behind cash, so small spenders should stick to no-fee cards.
Then the year is a mix: the months you pay in full earn rewards, and the months you carry a balance pay interest. Put your average carried balance into the calculator — the balance you typically owe across the year — and the interest line is a fair estimate. A balance carried for three months of the year costs roughly a quarter of the full-year interest on that balance.
Yes, but only when the merchant charges for cards or discounts cash. Paying in full means no interest and no fee, so the card's net is the full rewards rate — $360.00 at the defaults. Cash wins only if a store charges a card surcharge or gives a cash discount bigger than the rewards rate: a 3% surcharge beats 2% rewards, and a 3% cash discount does the same. Without a surcharge or discount, the card always wins when you pay in full.