1. Split spending into reward buckets
Create separate buckets for accelerated cashback, base cashback and non-eligible spend. Apply each rate only to the spend that belongs in that bucket.
2. Convert the cap into a spend ceiling
If the accelerated cashback has a monetary cap, determine how much eligible spending is required to reach that cap. Spending above that level may earn at a lower rate or no additional accelerated cashback.
accelerated spend ceiling = cashback cap ÷ accelerated cashback rate
3. Calculate the effective rate
The effective rate uses total card spending in the denominator, not only the transactions that earned the highest cashback rate.
effective cashback rate = total cashback earned ÷ total card spend
4. Add annual cost last
After calculating gross cashback, subtract annual ownership cost to compare the card with alternatives on a net basis.
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