The background on why this page exists are a pair of post (series) from the blog. One on finance and the other on using AI tools for software development, for example.

After this page is posted, roughly end of year 2025, there will be more posts about AI coming. The discussion on 0% APR purchase loans is complete though and the below calculator is the result. For the curious, the implementation and README are over on Github.

Please note fields marked with a ‘*’ are required and find additional instructions below the calculator and fold.

We are comparing three ways of making purchases,

  1. With a rewards credit card where the entire purchase balance is paid off at the balance due date
  2. With a 0% (or more!) nominal annual rate loan
  3. And, finally, with a loan where the money for the loan payments is held in a high yield deposit account until each payment due date

Those of you who have read the above post are aware that there are no realistic scenarios where the loan beats a rewards credit card in terms of reducing the effective purchase price. This is particularly true if the loan charges interest or fees. This calculator further demonstrates this principle in a way where you can play with the numbers. In order for the calculator to return results, you’ll need to supply

  • the purchase price
  • the nominal annual loan rate (NB: this is not quite the same thing as APR, but that will work just fine if it’s what you have)
  • how many months the loan runs for
  • a deposit account APY
  • and, for rewards, the credit card rewards rate

Optionally, you can chose ‘Real world calendar’ calculation mode which returns slightly more accurate numbers and supply a credit card APR to estimate the interest charge if the purchase was not paid off.

With this information, the calculator returns data like,

  • the loan’s monthly payment and interest charges, if any, for non-zero nominal rates
  • the potential benefit gained by holding loan payments in a high yield savings account for the duration of the loan
  • and credit card rewards from the single purchase