If you’re interested in learning how to calculate cash back rewards earned from credit card purchases, you’re in the right place. Cash back rewards are usually earned as points which can later be redeemed for cash. In order to figure out how many points you’ve earned from a particular purchase, and how much cash those points are worth, you’ll need to use some simple math.
Easy Math
To calculate the points earned, simply multiply the price of the product by the credit card cash back percentage.
(Credit Card Cash Back Percentage) × (Price of Product) = Points
To calculate the cash earned, divide the points by 100.
(Points) / (100) = Cash
If you don’t care to know how many points you’ve earned, and you prefer to directly calculate the amount of cash earned, you can combine the previous two equations.
(Credit Card Cash Back Percentage) × (Price of Product) / (100) = Cash
Let’s go through an example together.
Example
You just bought a new TV with your Chase Freedom Unlimited card, a popular cash back credit card that earns 1.5% cash back on most purchases. To keep the math simple, let’s assume that the total, out-the-door price of your new TV was $500 including taxes. Let’s use the equations above to calculate the amount of points and cash earned.
(Credit Card Cash Back Percentage) × (Price of Product) = Points
(1.5) × (500) = 750 points
(Points) / (100) = Cash
(750) / (100) = $7.50
The result is the same when using the combined equation.
(Credit Card Cash Back Percentage) × (Price of Product) / (100) = Cash
(1.5) × (500) / (100) = $7.50
Mission Accomplished
Congratulations, you’ve learned how to calculate cash back credit card rewards! Feel free to pass along your newfound knowledge by sharing this article with your family and friends.
