How to use the business credit card rewards calculator
The inputs: The “Monthly Spend” amount is the only required input to generate a list of results. Expanding the “Spend Categories” menu lets you tailor the results even further by entering your monthly credit card spending amounts in seven key categories (Cell Phones, Dining, Gas, Office Supplies, Travel, and “Other”). We strongly urge you to do so, since a lot of cards pay elevated rewards rates on purchases in certain categories which can affect how much cash back you’ll really earn. “Filter Results” lets you hand-pick the cards you see.
The math: When you tap in how much you spend per month for each of the spending categories, we apply each provider's rewards rate for that spend type to calculate the “Cash Back Per Year” amount. To ensure the most accurate results, we factor in rewards program spending category bonus rates, rewards spending caps and default rewards rates, when applicable. If a card charges an annual fee, that amount is backed out of the total annual rewards figure.
The extras: Clicking “Apply Now” will take you to that credit card’s application page. But before that, you might want to take a gander at our homework. Click “Dayana’s Take” for a high-level overview of each card’s reward program and our likes and dislikes.
Note: The results include all of the rewards cards in our database, listed in descending order of the amount each card is expected to pay out annually based on the spending inputs. (See “Methodology” below for more.)
How do you calculate the reward rate for credit cards?
Not all credit card rewards are created equal. Points or percentage cash back earned can vary from card to card depending on each loyalty program's rules. But a few mathematical shortcuts make it easy to calculate and compare reward rates.
Calculating cashback credit card rewards
Cashback credit cards that pay a percentage of each purchase back to you are the easiest reward rates to calculate.
To convert a 1.5%, 3%, or 5% cashback rate into dollar terms, divide the cashback percentage number by 100. For example, a card that pays 1.5% cash back on all qualifying purchases has a rewards rate of $0.015 (1.5 divided by 1000) per $1 spent. A card offering 3% cash back pays you $0.03 for each dollar you spend; 5% nets you $0.05, and so on.
The above math works for a card that offers the same rewards rate for all purchases. But there are other reward structures that aren’t as straightforward and require a bit of reverse engineering to calculate.
Here’s how to calculate the rewards rate per $1 spent on cards with different bonus tiers or caps on how much you can earn: Divide the total amount you earned in rewards by the amount you spent to earn it.
- Rewards rate example of a card with bonus spending categories: Let’s say you use a card that offers elevated cashback rates on travel (3%) and gas (2%) and 1.5% on everything else. During the month you spend $400 on a plane ticket (earning $12 in rewards), $100 on gas ($2) and $500 on other stuff ($7.50). Your total rewards rate — $21.50 divided by the $1,000 you spent — is $0.0215 per dollar. Multiply that by 100 and you’ve got your cashback rewards rate percentage: 2.15%.
- Rewards rate example of a card with spending caps: YYou spend $1,000 treating your staff to a celebratory dinner at a local fine dining establishment. You use a rewards card that offers 5% cash back on restaurant spending up to $500 a quarter, and 1% cash back on amounts above that. Your total rewards payout is $30 — $25 for the portion of your tab that qualified for the 5% bonus rate and $5 cash back for the amount that exceeded the spending cap. Your total rewards rate comes to 3% ($30 divided by $1,000 = $0.03 back per $1 spent.).
Calculating points-based credit card rewards
To figure out the reward rate on a credit card that rewards you points on your spending, you need to know 1) how many points you get per $1 spent and 2) the cost of the item your points can buy.
Here’s the math: divide the value of the reward (what it would cost to purchase the item outright) by the number of points required to redeem it to calculate the point value.
- Rewards rate example for credit card points: If you earn 1 point for every dollar you spend, and it takes 50,000 points to cover a $500 plane ticket, each point is worth one cent, which equals a 1% rewards rate.
Calculating the rewards rate on a points-based credit card gets tricky quickly depending on a card’s setup and your redemption options. Cards may award the same number of points on all purchases (e.g., one point for each $1 spent), or have a category-based points system (e.g., four points for each dollar spent at hotels, three points for airfare, two for gas, etc.). Check your rewards card agreement for details. Similarly, points can be worth different amounts based on what you redeem them for.
The goal is to redeem points for the highest-value reward, which may require putting in some elbow grease to manage your options. But if points math makes your head spin, a straight-up cashback credit card is a straightforward — and still highly rewarding — option to consider.
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Methodology
The results of the investor.com Credit Card Business Rewards Calculator are based on the monthly spending amounts you enter and the annual dollar value of the rewards each credit card program pays per $1 spent. Credit card companies often express this payout amount as a percentage (e.g., 1.5% of every dollar spent) or on a points basis (e.g. ,1.5 points for every dollar spent). We converted all of them to a dollar amount (“Cash Back Per Year”) to make comparing offers easier.
To calculate the amount of cash back you could earn per year, we factored in:
- Tiered rewards rates: Some business cards pay a flat cashback rate on all purchases. Others pay higher cashback rates on purchases that fall under specific spending categories. The investor.com algorithm incorporates each issuer’s unique reward’s program to determine the “Cash Back Per Year” tally.
- Spend category inputs: Based on the rewards cards in our database, cell phones, dining, gas, office supplies, travel and "other" are the categories most often used by business credit cards that feature tiered rewards programs. We encourage you to customize the monthly spend inputs for the most accurate results.
- Monthly spend: The default dollar amounts for each spend category in the Business Credit Card Calculator are based on average small-business spending data from the U.S. Bureau of Labor Statistics and other sources. Click the arrow on the “Spend Categories” to customize the monthly spend inputs and find the business card with the highest payout rate for your small-business spending.
- Rewards spending caps: Some cards impose category- or time-based limits (monthly, quarterly, annually) that affect the amount of rewards you can earn. For example, a card may pay 3% cash back on office supplies on up to $1,000 of spending each quarter, then revert to the base/default rewards rate until the following quarter. We accounted for bonus spending caps and timeframe in the calculations.
- Default rewards rates: Purchases that exceed a spending cap are usually subject to a lower default rewards rate (e.g., 1% or 1.5%). We mathed that out too.
- Annual fees: If a rewards card charges an annual fee, we deducted that amount from the “Cash Back Per Year” total to provide a true accounting of a card’s annual rewards payout.
What’s not included in the “Cash Back Per Year” total is the cash value of any sign-up/introductory bonus. We highlight any Welcome Bonus separately. While sign-up bonuses can be the most lucrative part of getting a new cashback rewards credit card, not everyone will want or be able to do what it takes to earn the extra cash. (It usually requires spending a certain amount in a specified time period after the card is activated.)
About the results
The investor.com Business Credit Card Calculator relies on your actual spending patterns to identify which rewards programs are most worth your while. The results are listed in descending order based on the annual dollar value of the rewards — “Cash Back Per Year” — each credit card program pays based on your calculator inputs.
To ensure the most accurate results, we factor in rewards program spending category bonus rates, rewards spending caps and default rewards rates, when applicable. If a card charges an annual fee, that amount is backed out of the total annual rewards figure. (See Methodology above for more details.)
All of the business rewards cards in our database are included in the results so you can compare the good, the bad and the meh. (Click “View More” to see the full list of credit cards. And please email us if there’s a card you want to see in the list.)
Here’s more on the calculator inputs:
- “Monthly Spend” amount: This the only required input to generate a list of results. The default amounts we use in the calculator is based on average small-business spending data from the U.S. Bureau of Labor Statistics and other sources. Changing the dollar amount will update the “Cash Back Per Year” figures for all cards.
- “Spend Categories” inputs: Expanding the “Spend Categories” menu lets you tailor the results even further by entering your monthly credit card spending amounts in six key business card categories (Cell Phones, Dining, Gas, Office Supplies, Travel, and “Other”). We strongly urge you to do so, since a lot of cards pay elevated rewards rates on purchases in certain categories which can affect how much cash back you’ll really earn.
- “Filter Results”: This feature allows you to choose which credit cards to include in the results list.
- Our research: Clicking “Apply Now” will take you to that credit card’s application page. But before that, you might want to take a gander at our homework. Click “Dayana’s Take” for a high-level overview of each card’s reward program and our likes and dislikes.
Drop us a line: We regularly add new cards to our database. Let us know if there’s a credit card rewards program you’d like to see included by emailing us.
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