Bank Of America Cash Rewards Card basics for January 2020
The Bank of America® Cash Rewards Credit Card is a card that could either be moderately valuable or extremely valuable, depending on your situation. This no annual fee card lets you earn 3% cash back in a category of your choice, but you can potentially increase that to up to 5.25% cash back, which is excellent.
What I like about this card is that it has some unique bonus categories — like offering a bonus on online shopping — and you also have the potential to really maximize the card if you also have assets with Bank of America.
$200 Cash Rewards Bonus Offer
The card offers a $200 cash reward bonus after spending at least $1,000 on purchases within the first 90 days from account opening.
That’s a pretty solid welcome bonus when you consider that this is a no annual fee card.
Bank of America has a 24-month rule on many of their applications. For the Cash Rewards Card, the application notes:
This Cash Rewards card will not be available to you if you currently have a Cash Rewards card unless you have had that Cash Rewards card for at least 24 months.
Nonetheless you’d be eligible for the bonus if you have another Bank of America card (and there are several excellent cards to choose from). See this post for all the application rules to be aware of by card issuer.
No Annual Fee
Okay, I hinted at this above, but the card has no annual fee… it doesn’t get better than that!
What I love about no annual fee cards is that it can make sense to get them even if they just have a niche purpose, since there’s not much opportunity cost to having them.
Maximizing Value With The Bank Of America Cash Rewards Card
The Bank of America Cash Rewards Card offers cash back for rewards. The card offers anywhere from 1% to 3% cash back, with some limits. However, there are some tricks that allow you to earn anywhere from 1.75% to 5.25% cash back on your purchases.
The card offers 3% cash back in the category of your choice from the following:
- Online shopping
- Drug stores
- Home improvement/furnishings
You’re able to choose the category for which you want to earn the bonus every calendar month. If you don’t change it then it will stay the same as before, but this is some really nice flexibility to have.
Then the card also offers 2% cash back at:
- Grocery stores
- Wholesale clubs
Then the card offers 1% cash back on all other purchases.
$2,500 Bonus Limit
The one catch here is that the card only offers 2-3% cash back in the first $2,500 in combined purchases each quarter for your chosen category, grocery stores, and wholesale clubs.
What Does The Online Shopping Category Include?
I think most of the 3% cash back categories are fairly self-explanatory. You can find a full description of the categories here.
I think the category that’s probably most confusing is the one for online shopping. What are the limits to earning 3% cash back for online shopping?
The online shopping category includes online and mobile app purchases in a wide variety of merchant categories, including everything from bookstores to clothing and apparel to department stores to discount stores to electronics to special retail stores to sporting goods.
For example, online purchases with Amazon, Apple, Nordstrom, and Walmart, would all qualify, just to give a few examples.
How Do I Redeem My Bank Of America Cash Rewards?
You can redeem your cash rewards for statement credits, deposits made directly into a Bank of America checking or savings account, for credit to a qualifying Cash Management Account with Merrill Lunch Wealth Management or Merrill Edge, for contributions to a qualifying 529 account with Merrill Lynch, or checks.
Personally it seems easiest just to get a check or statement credit.
Bank of America Preferred Rewards Program
If you really want to take the Bank of America Cash Rewards Card to the next level, pay attention. As mentioned above, the card ordinarily earns 1-3% cash back with no annual fee, though this is where the card gets really awesome.
Bank of America has the Preferred Rewards program, which has tiers based on your combined balance with Bank of America. Here are the tiers, the balances required to earn them, and the bonus you earn on your credit card rewards for each tier:
|Required 3-month average combined balance||$20k to < $50k||$50k to < $100k||$100k+|
|Rewards bonus on eligible BofA credit cards||25%||50%||75%|
|Effective category bonus on Bank of America® Premium Rewards Visa® credit card||• 2.5% on dining and travel|
• 1.875% on non-bonused spend
|• 3% on dining and travel|
• 2.25% on non-bonused spend
|• 3.5% on dining and travel|
• 2.625% on non-bonused spend
So your banking relationship with Bank of America determines how much of a rewards bonus you get on your credit card.
Put another way, if you have the Bank of America Cash Rewards Card and belong to the Platinum Honors tier, you’re earning:
- Up to 5.25% on your choice of gas, online shopping, dining, travel, drug stores, home improvement/furnishings
- Up to 3.5% on grocery stores and wholesale clubs
- 1.75% on non-bonused spending
This is an area where the Bank of America® Premium Rewards Visa® credit card also shines, because you can potentially earn up to 2.625% on your everyday spending with that card if you belong to the Platinum tier.
Is The Bank Of America Cash Rewards Card Worth It?
The Bank of America Cash Rewards Card is a niche card. It’s not for everyone, but I also think it’s underrated, because it’s a great card for some people.
This card isn’t for you if:
- You’re looking to earn travel rewards and/or points
- If you’re looking for a card that maximizing your everyday spending (meaning spending that doesn’t belong to one of the bonus categories)
- If you’re a huge credit card spender
But I do think this card is great for many. I love that this card lets you choose in which category you earn 3% cash back, and that even includes some unique categories you don’t see with many other cards, like online shopping.
In and of itself that’s great. But imagine if you are in the Platinum tier of the Preferred Rewards Program, and you’re earning 5.25% back on online shopping. That’s an incredible return. And this is a no annual fee card, so this is a card that you can get and use when it’s useful, and then put in your sock drawer when it’s not useful.
Complement This With The Premium Rewards Card
It could make sense to complement the Bank of America Cash Rewards Card with the Bank of America Premium Rewards Card. The card offers 2% cash back on travel and dining and 1.5% cash back on all other purchases.
However, if you’re in the Platinum tier of the Preferred Rewards program, that translates to 3.5% cash back on travel and dining, and 2.625% cash back on all other purchases.
Simple No Annual Fee Cash Back Card
If you’re just looking for the simplest no annual fee cash back credit card, it’s tough to go wrong with the Citi® Double Cash Card, which offers 1% cash back when you make a purchase, and 1% cash back when you pay for that purchase.
That card will be better for non-bonused, everyday spending, since you’re earning two cents back on the dollar, rather than at most 1.75 cents on this card.
Bank Of America Cash Rewards Card Summary
If you’re looking to earn cash rewards and spend any amount on gas, online shopping, dining, travel, drug stores, and home improvement, then the Bank of America Cash Rewards Card is worth having, in my opinion.
The card has no annual fee, and earning 3% cash back in a category of your choice is some awesome flexibility that not many cards offer.
Best of all, if you can take part in the Bank of America Preferred Rewards program, you could even be looking at up to 5.25% back in those categories.