Sign-Up Bonus ROI
Calculate the effective percentage return of a new credit card welcome offer.
Offer Analysis
Return on Spend (ROI)
Net Profit (Year 1)
How This Tool Works
This calculator determines the Return on Investment (ROI) of a credit card sign-up bonus.
- Formula:
(Bonus Value - Annual Fee) / Required Spend = Return %. - Logic: We treat the spending requirement as your "investment" and the net bonus value (bonus minus fee) as your "profit."
- Assumptions: Points are valued at 1 cent each by default, but you can adjust this if you know how to redeem for higher value (e.g., business class flights).
How to Use (Steps)
- Enter Bonus Amount: (e.g., 60,000 points).
- Input Required Spend: (e.g., $4,000).
- Add Annual Fee: (if any).
- Calculate: Click to see your effective discount percentage.
Example Calculation
Offer: 60,000 points after spending $4,000. $95 Annual Fee.
• Value: $600 (Points) - $95 (Fee) = $505 Net
Profit.
• ROI: $505 / $4,000 = 12.6% Return on Spend.
Why This Tool Is Accurate
Most blogs strictly look at point totals. This tool subtracts the annual fee first, giving you the true mathematical return on your spending.
Limitations & Disclaimer
This calculator does not account for the temporary drop in credit score from a hard inquiry. Disclaimer: Do not spend money you wouldn't otherwise spend just to earn a bonus. That ignores the math and costs you money.
Frequently Asked Questions
No. Banks almost never count the annual fee towards the "minimum spend." You must spend the required amount in purchases.
Generally, no. The IRS views credit card rewards as a "rebate" or "discount" on spending, not income. However, referral bonuses are often taxable.
If a return drops your total spending below the requirement, the bank may claw back the bonus. Be careful and try to spend a little over the minimum to be safe.