1. What is Points vs Cash Back Comparison?

This calculator compares the value of credit card points versus cash back rewards to help you determine which reward type gives you better value for your purchases.

2. How Does the Calculator Work?

The calculator uses two formulas:

Where:

• \( Points \) — Points earned from the purchase
• \( Value\ per\ Point \) — Dollar value of each point
• \( Cash\ Back\ \% \) — Percentage of purchase returned as cash back
• \( Purchase\ Amount \) — Total amount spent

Explanation: The calculator computes the dollar value of both reward options and compares them to show which is more valuable.

3. Importance of Reward Comparison

Details: Understanding the true value of different reward types helps maximize credit card benefits and make informed spending decisions.

4. Using the Calculator

Tips: Enter the points you would earn, the value per point (typically 0.01-0.02 for most cards), the cash back percentage, and the purchase amount. All values must be non-negative.

5. Frequently Asked Questions (FAQ)

Q1: What's a typical point value?
A: Most credit card points are worth 1 cent (0.01) each, but premium cards can offer higher values, especially for travel redemptions.

Q2: When is cash back better than points?
A: Cash back is usually better when point values are low (< 1 cent) or when you prefer simplicity over potential higher-value redemptions.

Q3: How do I find my point value?
A: Check your credit card's rewards program details. For flexible points, value depends on how you redeem them (cash, travel, etc.).

Q4: Are there cards that offer both?
A: Some cards let you choose between points or cash back, while others automatically convert points to cash back at a set rate.

Q5: Should I always choose the higher value option?
A: Not necessarily. Consider other factors like redemption flexibility, expiration policies, and your personal spending habits.