The monthly break-even for a fee-charging points debit card: how much non-Amex spend it needs before its points cover the fee

A fee-charging points debit card pays for itself when your monthly spend on it reaches fee ÷ (points per £ × your value per point in £). Take a hypothetical card at £10 a month, earning 1 point per £, with points you’d redeem at 0.6p each. It needs £1,667 of spend every month. Value the same points at 1p and the bar drops to £1,000.

That swing matters more than the fee. The fee is fixed and printed in the terms, while the value per point is your own estimate. The figure is only trustworthy if three inputs are right: the earn rate on the spend you’ll actually put through the card, a value per point based on the redemption you’ll really make after cash charges, and an honest count of spend that Amex genuinely can’t take. Even then, the card’s own terms have to confirm that points land the way the formula assumes.

Every card figure below is a hypothetical round number chosen to show the method. None of it describes a real product.

Setting up the three inputs

The monthly fee

If the card bills monthly, use that number. If it bills annually, divide by 12, so a £120 annual fee becomes £10 a month. If there’s a minimum term, the monthly figure understates the cost of a short tactical sign-up. The real cost is whatever you’re committed to paying, so ask what happens to fees already paid, or still owed, if you cancel early.

Points per £ on eligible spend

Start with the headline earn rate, but only for the kind of spend you’ll actually do. Exclusions, rounding and caps can drag the effective rate below the headline, and because they can overturn the result, they get their own check later.

Value per point, in pounds

Express your value in pounds, not pence: 0.6p is £0.006. Get the units wrong and the result is nonsense: £10 ÷ 0.006 gives £1,667 of spend, while £10 ÷ 0.6 gives £16.67. The formula’s output is pounds of monthly spend.

A worked scenario at £10 a month

Assume a hypothetical card charging £10 a month and earning 1 point per £, with points you’d value at 0.6p.

• Each £1 spent returns 1 × £0.006 = £0.006 of value.
• Break-even spend is £10 ÷ £0.006 = £1,667 a month (rounded).
• At £1,000 a month, you’d earn £6 of value against a £10 fee, a net cost of £4 a month.
• Over a year, break-even means roughly £20,000 of spend that you can’t put on your Amex.

The annual figure is the reality check. If your Amex already takes most of your spend, a card that needs £20,000 a year of Amex-refused payments is a narrow proposition, unless your work or household runs on merchants that won’t take Amex.

How sensitive the answer is to each input

The table shows hypothetical monthly break-even spend across fees, earn rates and point values.

Fee and earn rate	0.5p per point	0.6p per point	0.8p per point	1p per point
£5 a month, 1 point per £	£1,000	£833	£625	£500
£10 a month, 1 point per £	£2,000	£1,667	£1,250	£1,000
£10 a month, 2 points per £	£1,000	£833	£625	£500
£15 a month, 1 point per £	£3,000	£2,500	£1,875	£1,500

Two patterns stand out. The fee scales the answer in a straight line, so a fee that’s 50% higher needs 50% more spend. Earn rate and value per point sit in the denominator, so the break-even is inversely proportional to them: doubling the earn rate halves the required spend.

That inverse relationship is why the valuation input deserves the most scrutiny. Suppose you value points at 0.9p when your real redemption delivers 0.6p, an overstatement of 50%. You’d calculate a break-even of £1,111 instead of £1,667, understating the spend you need by a third. A fee of £10 or £12 is easy to read off a terms page. The value you assign to a point isn’t, and that’s where optimism usually creeps in.

Count only spend Amex can’t take

The spend column for the debit card should contain only payments where Amex isn’t an option: the merchant refuses it, or the payment type can’t go on a card you hold. Spend that Amex accepts already earns on your Amex, whether that’s Membership Rewards or a co-brand card’s own currency. Moving it to the debit card is a separate trade-off, because you’d give up the Amex earn to gain the debit card earn, so counting that spend here makes the debit card look better than it is.

To build this column, go through recent statements and bank records and mark each payment that genuinely couldn’t have gone on your Amex. Be strict. A merchant that accepts Amex but where you happened to use another card doesn’t count.

The incremental version: subtract what a free option would earn

The simple formula assumes the alternative to the paid card earns nothing. That’s true if you’d otherwise pay by bank transfer or cash. If you’d otherwise use a free debit or other card with some return of its own, the paid card only earns the difference:

Break-even = fee ÷ (points per £ × value per point − return per £ from the free alternative)

Keeping the hypothetical £10 fee, 1 point per £ and 0.6p:

• Free alternative returns nothing: £10 ÷ £0.006 = £1,667.
• Free alternative returns 0.2p per £: £10 ÷ £0.004 = £2,500.
• Free alternative returns 0.4p per £: £10 ÷ £0.002 = £5,000.
• Free alternative returns 0.6p per £ or more: the paid card can’t break even at any level of spend.

The closer the free option comes to the paid card’s return, the steeper the climb. This is the version to use if you already have somewhere free to put Amex-refused spend.

You normally don’t need a line for card surcharges. The Payment Systems Regulator says that since 13 January 2018 UK merchants aren’t allowed to charge extra for payment by a card capped under the interchange regulation, with limited exceptions. Because exceptions exist, treat it as a general rule rather than a guarantee for every payment. If a merchant does add a surcharge, it comes straight off the card’s return on that transaction.

Choosing your value per point

Base the value on the redemption you’ll actually make, net of any cash you pay alongside the points. The calculation is (cash price you’d otherwise pay − cash you still pay on the reward) ÷ points used.

Avios shows why the cash side matters. British Airways states that reward flight bookers pay Avios plus a cash amount to cover taxes, fees and carrier charges. The same factsheet says members short of Avios can buy more or pay cash to reduce the number required, so the same point can be redeemed at quite different values depending on the booking.

A hypothetical example: a reward needs 20,000 points plus £100 in cash charges, and the same trip would cost £300 in cash. The value is (£300 − £100) ÷ 20,000 = 1p per point. Ignore the £100 and you’d claim 1.5p, an overstatement of 50%. That’s the same size of error that, in the sensitivity section, understated the required spend by a third. The same logic applies to hotel redemptions with extra charges, which we worked through in this piece on Hilton points at resort-fee hotels.

Two further adjustments belong in this input. If the card’s points convert into another programme, apply the conversion rate before you value them. And if you have no specific redemption in mind, use a conservative figure rather than a best case you may never book.

Checking the figure against the card’s terms

The formula assumes every eligible pound earns the headline rate with no ceiling. The terms decide whether that holds. Work through the checks in order, and don’t call it a pass until every one is done: a result that looks comfortable can still fail at step two.

1. Earn exclusions. Ask which transaction types don’t earn: bill payments, tax payments, cash-like transactions, transfers, top-ups. Strip excluded spend out of your monthly total first. If what’s left is below break-even, stop. Nothing further down the list can rescue it.
2. Monthly earn caps. Multiply the maximum points per month by your value per point. If that’s below the fee, the card can’t break even at any spend, and this overrides whatever the formula said. A hypothetical cap of 1,000 points at 0.6p is worth £6 a month, short of a £10 fee however much you spend. If the cap’s value is above the fee but below your expected earn, use the capped figure.
3. Per-transaction rounding. Ask whether points are calculated per transaction, per whole £, or on the monthly total. Under a hypothetical whole-£-per-transaction rule, a £4.99 payment earns 4 points, an effective rate of about 0.8 points per £. Lots of small payments pull the real rate below the headline, so recalculate with the effective rate.
4. Foreign spend. Ask whether there’s a foreign-currency fee and whether overseas spend earns at the same rate. The regulator notes that cross-border payments where the issuer or acquirer sits outside the UK are no longer covered by the UK or EU interchange caps. That doesn’t tell you what any card does, but it’s a reason not to assume overseas spend is treated the same as domestic. Any foreign-currency fee comes off the return per £ on those payments.
5. Minimum term and cancellation. Confirm whether you can cancel monthly, and what happens to fees already paid. This decides whether a three-month trial costs three months of fees or a full year.
6. Conversion and expiry. Confirm which programme the points go into, at what rate, whether conversion is irreversible, and whether it’s limited to an account in your own name. Then check the expiry rule. As an example of the kind of rule to look for, British Airways states that Avios don’t expire as long as members collect, use or purchase at least one Avios every 36 months. That factsheet is undated, so check current terms. Points that can expire before you redeem them are worth less than your valuation assumes.

Why the welcome bonus stays out of the monthly figure

A welcome bonus is a one-off. Spread it across a year and the monthly break-even looks lower, but only until the bonus period ends. After that, the ongoing figure is the one you live with.

Assess it separately. A hypothetical 10,000-point bonus at 0.6p is worth £60, which covers six months of a £10 fee. That can make a short trial cheap, but whether you keep the card afterwards still depends on the monthly break-even. If a bonus requires qualifying spend, run that spend through the exclusions check too.

Why these cards charge a fee at all

What follows is my analysis, not something the regulator says. According to the Payment Systems Regulator, where the UK caps apply, interchange on consumer debit cards is limited to 0.2% of the transaction value, against 0.3% for consumer credit cards. The caps apply where merchant, acquirer and issuer are all in the UK. The same page notes that interchange flows from the merchant’s bank to the cardholder’s bank for most card payments, but not for American Express cards.

At the 0.2% cap, a £100 domestic debit payment generates at most 20p of interchange for the issuer. Our hypothetical card hands back 1 point per £ valued at 0.6p, which is 60p per £100. Interchange alone doesn’t look like enough to fund that, which plausibly explains why points debit cards lean on subscription fees.

Running it on your own last three months

1. Pull three months of bank and card statements.
2. List every payment that couldn’t have gone on your Amex.
3. Remove any payment types the card’s terms exclude from earning.
4. Divide the total by three to get your monthly average.
5. Work through the rest of the terms checklist above: adjust the earn rate for rounding, check the cap against the fee, and confirm foreign-spend treatment, minimum term, and conversion and expiry rules.
6. Calculate the incremental break-even using your net value per point and your free alternative’s return.
7. Compare your average with the break-even.

My own rule is to want the average comfortably above break-even, around a quarter higher, because three months of spend may not repeat. That margin is a judgement, not a sourced threshold. If the average only scrapes past, a small drop in spend or an optimistic valuation could turn the gain into a loss, while the free option carries no fee risk.

In short: divide the fee by points per £ times your value per point in pounds. Count only spend Amex can’t take, net off what a free option would earn, and value points at the redemption you’ll actually make after cash charges. Then confirm the earn against the card’s exclusions, caps, rounding, foreign-spend rules, minimum term and expiry before you trust the figure.