The 5 numbers to compare before applying
Comparing rewards cards feels overwhelming because offer pages drown you in perks, bonuses, and fine print. But a comparison only needs five numbers. Get these five from each card's terms document, apply them to your own spending, and two cards become directly comparable — no hype required.
1. Annual fee — what you pay for the privilege
The fee is the simplest number and the one people underweight. It's charged once a year, it comes out whether you use the card or not, and everything else has to earn it back. Note two things beyond the headline figure: whether it's waived for the first year (a waiver makes year one cheap and year two the real test), and whether there are extra fees for additional cardholders, which matter if a partner or family member needs a card on the account. When you compare a fee card against a no-fee card, the fee card's rewards have to beat the no-fee card's rewards by more than the fee, every year.
2. Earn rate — what you get, on what you buy
Cards rarely pay one flat rate. Most pay a higher rate in a few categories (often groceries, gas, dining, or travel) and a lower base rate on everything else. To compare earn rates you need three details from the terms: the category rates, the base rate, and any caps — the high rate may apply only to the first few thousand dollars of spending in a category each year. Also check the issuer's category definitions: "groceries" usually means supermarkets specifically, and big-box or warehouse stores often don't count. Apply the rates to your own category spending (see our fee-vs-earn-rate framework), not to the brochure's fantasy shopper.
3. Redemption value — what a point is actually worth
For cash back this number is trivial: a dollar of rewards is a dollar. For points and miles, the value of a point depends entirely on how you redeem it, so you have to pick a redemption method you would actually use and value the points at that method. If you'll redeem for travel through the issuer's portal, use that value; if you'll transfer to an airline program, use a realistic transfer value for trips you'd actually take. Comparing two points cards at their headline earn rates ("2 points per dollar!") is meaningless until both are converted to dollars via redemption. A card earning 2 points per dollar redeemed at half a cent each loses to a card earning 1 point per dollar redeemed at two cents each — the earn rate only matters after redemption.
4. Bonus requirements — what the sign-up bonus really costs
Sign-up bonuses are the loudest number on the offer page and the least important in a long-term comparison — unless the requirements change your behaviour. Read the terms for the two real numbers: the spending threshold (how much you must spend) and the time window (usually a few months from account opening). Then ask two questions. Can you hit the threshold with spending you were going to do anyway? And is the bonus worth concentrating your spending on one card for those months? A bonus you earn with normal spending is free money; a bonus that requires manufactured spending or purchases you wouldn't make is a cost disguised as a reward. Annualize it, too: a $200 bonus on a card you'll keep for five years is $40 a year of value — nice, but it shouldn't drive the decision.
5. Foreign transaction fee — the travel and cross-border tax
If you travel abroad or shop from foreign websites, this fee applies to every purchase made in a foreign currency — typically a few percent of each transaction, charged on top of the exchange rate. It applies to the purchase price, which means it silently eats a chunk of your rewards on every foreign transaction. If you rarely spend in foreign currency, this number is nearly irrelevant; if you travel or cross-border shop regularly, a card with no foreign transaction fee can easily be worth more than a higher earn rate elsewhere. Some cards charge it and some don't — it's one of the clearest binary differentiators between two otherwise similar cards.
Putting the five numbers to work
With the five numbers in hand, the comparison is arithmetic. For each card: estimate your yearly rewards (earn rate × your spending, converted at realistic redemption value), subtract the annual fee, and adjust for foreign spending if relevant. Treat the sign-up bonus as a one-time sweetener, not a tiebreaker. The card with the higher net number wins — for you, this year. Re-run the comparison at each annual fee renewal, because your spending and the card's terms both change over time.