A card with an annual fee usually earns more, but only some of that is real profit. The fee comes off the top every year. This calculator compares a card that has a fee with a no-fee card, using your own spending, so you can see which one leaves you with more.
Annual fee calculatorDoes a card with an annual fee pay for itself? Compare it with a no-fee card, using your own spending.
Enter how much each card gives back in each category, as a %. For a points card, multiply the points per dollar by what a point is worth: 2 points per $1 at 1¢ each is 2%. Not sure what your points are worth? Try our cents per point calculator. The numbers filled in are just an example.
Card with fee, per year
No-fee card, per year
How it works
For each card, the calculator adds up a year of rewards across your spending, then takes off the annual fee:
The card with the higher net value is the better deal for your spending. The calculator also shows how much you’d need to spend each month for the fee to pay for itself.
Worked example
These are the calculator’s example numbers. The rates are illustrative, not a specific card.
| Monthly spending | $2,550 ($30,600 a year) |
| Fee card rewards (4% groceries and bills, 2% dining and gas, 1% the rest) | $732 |
| Fee card net, after a $120 fee | $612 |
| No-fee card at 1% on everything | $306 |
| Difference | $306 a year for the fee card |
Here the fee card wins comfortably. Cut the grocery spending in half, though, and the gap shrinks fast. That’s why it’s worth running your own numbers.
What the calculator leaves out
- Spending caps. Many cards pay the bonus rate only up to a limit, then drop to the base rate. If your spending in a category goes past the cap, lower the rate to match.
- Welcome bonuses. A big first-year bonus can make a fee card worth it for year one, even if it isn’t after that. Count it separately, and see how welcome bonuses work.
- Perks. Insurance, lounge access or free checked bags have value only if you’d use them or would otherwise pay for them.
- What a point is worth. For points cards, the result depends on how you redeem. Use a value you’ll really get, not the best case.
Frequently asked questions
Is a credit card annual fee worth it?
It’s worth it when the extra rewards you earn, compared with a no-fee card, are more than the fee. That depends on how much you spend and where. Heavy spending in a card’s bonus categories usually makes a fee card pay off; light or scattered spending usually doesn’t.
How do I calculate the break-even point for an annual fee?
Divide the annual fee by the difference in earn rates. If a fee card pays 2 percentage points more than your no-fee card and charges $120, you need $6,000 a year of spending at that higher rate, or $500 a month, to break even.
Should I count a first-year fee waiver?
Count it for year one only. Use the checkbox to see the first-year result, but decide whether to keep the card based on the regular yearly numbers.
Related reading
- Cents per point calculator: turn points into a % back rate to use here
- Cash back vs. travel points: which pays more at three household budgets
- Start here: how to choose your first rewards card
- Foreign transaction fee calculator: what currency conversion fees cost you