Bank Gap & Liquidity Optimizer
See whether idle cash should stay liquid, pay down high-interest card debt, or move toward a stronger savings benchmark. The first dollars usually do the most work when they attack APR instead of chasing APY.
Benchmark APY
4.40%
Avg card APR
21.50%
The formula
Annual wealth burn = credit card interest cost - deposit interest income
Bottom line
Keeping an emergency buffer can be rational. Keeping excess cash at a low APY while paying card APR is usually expensive.
Enter your cash and card debt
Rough estimates are fine. All values stay in your browser.
Enter your cash and card debt to calculate — or load an example.
Your result will appear here
Enter your cash and card debt above, then run the calculator to see your annual wealth burn and how much reallocating idle cash could save.
The rates behind this calculation
Average card APR
21.50%
Debt cost usually dominates deposit yield.
Editable — defaults to the Federal Reserve G.19 national average.
Current deposit APY
0.38%
Low-yield cash offsets only a small part of card interest.
Editable — enter the rate your own account pays.
High-yield benchmark
4.40%
Used only after modeled card debt is paid down.
Best available high-yield savings APY, tracked daily.
Annual wealth burn
APR cost - APY income
Turns separate account choices into one annual dollar figure.
The single figure this tool works to shrink.
| Metric | Current value | Why it matters | How we source it |
|---|---|---|---|
| Average card APR | 21.50% | Debt cost usually dominates deposit yield. | Editable — defaults to the Federal Reserve G.19 national average. |
| Current deposit APY | 0.38% | Low-yield cash offsets only a small part of card interest. | Editable — enter the rate your own account pays. |
| High-yield benchmark | 4.40% | Used only after modeled card debt is paid down. | Best available high-yield savings APY, tracked daily. |
| Annual wealth burn | APR cost - APY income | Turns separate account choices into one annual dollar figure. | The single figure this tool works to shrink. |
FAQ
Cash drag, card debt, and savings — answered
What is cash drag?
Cash drag is the annual cost of keeping money in a low-yield account when that same cash could be reducing expensive debt or earning a higher benchmark yield. It is the quiet gap between what your money earns and what it could earn.
Is it smart to keep money in checking while carrying credit card debt?
Usually only up to the amount you need for near-term bills and an emergency buffer. Credit card APR is often above 20%, while traditional checking and savings pay a fraction of a percent — so every dollar past your buffer typically does more good against the card balance.
How does the Bank Gap & Liquidity Optimizer calculate annual wealth burn?
It compares your annual card interest against your deposit interest, then models redirecting idle cash first toward card debt and, only after that debt is cleared, toward a high-yield savings benchmark. The formula is: annual wealth burn = credit card interest cost minus deposit interest income.
Should I use all my savings to pay off credit card debt?
Not all of it. Keep enough liquid cash to cover near-term obligations and an emergency reserve first. Beyond that buffer, the math usually favors paying down high-APR card debt before chasing yield, because the interest avoided is larger and more certain than the yield gained.
What savings rate benchmark does SwitchWize use?
The high-yield benchmark is the best available FDIC-insured high-yield savings APY, tracked daily across the institutions SwitchWize monitors. The card APR defaults to the national average from the Federal Reserve G.19 series. Both values are editable so you can model your own accounts.