Do Your Rewards Pay Off? — Tickle & Compass

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Rewards don't pay for themselves if you carry a balance.

The math only works out if you pay the statement in full — here's how to tell if a rewards card is actually worth it.

Two kinds of rewards

CASH BACK

A flat percentage back on purchases, paid out as a statement credit or deposit. Easy to value — the number on the card is close to the number you'll actually get.

POINTS & TRAVEL

More upside if you redeem well through transfer partners or travel portals, but the real value per point swings — and drops fast if you cash out for gift cards or merchandise instead.

Do the annual-fee math

A bigger rewards rate doesn't always beat a no-fee card.

$120

earned on $12,000/year spend with a no-fee 1% cash-back card

$120

net from a 2% card with a $120 annual fee on the same spend

Illustrative example — run the numbers on your own spend and fee before switching.

The guaranteed loss

Carrying a balance erases rewards instantly.

Many standard cards charge around 20% interest on unpaid balances. Carry $1,000 for a year and the interest alone can cost more than a 1–2% cash-back rate ever earned you on that spending.

Watch for

Foreign fees, spend caps, and expiry.

Most Canadian cards add about 2.5% on purchases in a foreign currency, category bonuses often cap out after a set amount of spend per quarter, and unused points can expire on an inactive account.

The one habit that matters

Pay the statement balance in full, every cycle.

That's what keeps you inside the interest-free grace period — the entire case for a rewards card depends on never paying interest to earn them.

Tickle & Compass

Save this, then check your own card.

See how a rewards card stacks up against a plain no-fee option in our full breakdown.

See the full breakdown →

General information, not financial advice for your specific situation.