How is Value to You Calculated?
If you are familiar with one or many credit card rewards programs, you know that not all rewards are created equal. Some cards offer cash rebates; others earn points; and some earn miles. At FiLife, we want to bring those all down to a level playing field by calculating the rebates and rewards in actual dollars.
Try our credit cards picker to find the best card for you!
Most cash rebate and point cards are easy to understand – you accrue a certain amount of spending or points for every dollar you charge to your card. For hotel and airline mile cards, the conversion is not as simple.
We attempt to classify how much these points are worth based on what they can be most easily exchanged for – either flight credits (in dollars) or the closest near-cash exchange. Credit card companies provide these conversion numbers in the details of every card.
The equation becomes a little more complicated when credit cards reward you for certain kinds of spending. For instance, some cards give you more points for any gas purchase you make, or when you fly on certain airlines.
In order to account for the rewards that relate to certain kinds of spending, our personalized product picker uses average spending figures from the Bureau of Labor Statistic 2006 Personal Expenditure Survey (the most recent report). This spending survey considers the average household in the United States to have 2.4 people.
Our tool assumes that you do all your spending, save mortgage payments/rent, with your credit card. We also built in our own spending assumptions for multiple categories in which credit card rewards can be earned.
|
Category |
% Spend |
|
Supermarket and Drugstores |
16.4% |
|
Gas, Auto and Commuting |
11.3% |
|
Clothing, Books, Electronics etc. |
10.3% |
|
Dining and Fast Food |
8.9% |
|
Utilities |
7.7% |
|
Home Improvement |
5.5% |
|
Airlines and Hotels |
5.1% |
|
Cable and Phone |
3.0% |
|
Business Services and Supplies |
2.9% |
|
Gym, Beauty and Leisure |
2.1% |
|
Other |
26.8% |
Using the average consumer from government data doesn’t catch everyone. Small businesses, for example, will have much higher business services, fuel or data spending. For those who wish to personalize their spending, FiLife is developing a tool that will allow you to enter exactly how much you spend on individual categories.
Feel free to shoot us an email with any questions or suggestions on our tool.
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