Updated: 2 days ago
I’ve written in passing about The Bank of America® Premium Rewards® Credit Card, though in chatting with a reader last night realized that many people still haven’t heard of this card and the situations in which it can be quite lucrative.
Simply put, for some people this might be by far the most valuable credit card out there, as you can earn up to 2.625% cash back on all purchases. That’s virtually unheard of for other cards.
Here’s what you need to know about this card (and make sure you read until the section about the Preferred Rewards Program, which is where this card goes from ordinary to extraordinary).
Bank of America Premium Rewards Card welcome bonus
The Bank of America Premium Rewards Card offers a welcome bonus of 50,000 bonus points after you make at least $3,000 in purchases in the first 90 days of account opening.
Points earned on the card can be redeemed for one cent each (more on that below), so that means the bonus on this card is worth $500.
Current Offer Card Details
50,000 bonus points – a $500 value – after you make at least $3,000 in purchases in the first 90 days of account opening
• Receive 50,000 bonus points - a $500 value - after you make at least $3,000 in purchases in the first 90 days of account opening
• Earn unlimited 2 points for every $1 spent on travel and dining purchases and unlimited 1.5 points per $1 spent on all other purchases
• If you’re a Bank of America Preferred Rewards member, you can earn 25%-75% more points on every purchase
• No limit to the points you can earn and your points don’t expire
• Redeem for cash back as a statement credit, deposit into eligible Bank of America® accounts, credit to eligible Merrill Edge® and Merrill Lynch® accounts, or gift cards or purchases at the Bank of America Travel Center
• Get up to $200 in combined airline incidental and airport expedited screening statement credits + valuable travel insurance protections
• No Foreign Transaction Fees
• Low $95 annual fee
Eligibility for the Bank Of America Premium Rewards Credit Card
It’s worth noting upfront that Bank of America has a 24-month rule for many new applications. In the case of the Premium Rewards card, the application notes:
This Premium Rewards card will not be available to you if you currently have or have had a Premium Rewards card in the preceding 24 month period.
So if you already have this card, you likely won’t be eligible for a second version of this particular card.
Annual fee on the Bank of America Premium Rewards credit card
The Bank of America Premium Rewards Card has a $95 annual fee that isn’t waived the first year, so the annual fee is roughly in line with cards like the Chase Sapphire Preferred® Card and Citi Premier℠ Card.
Bank of America Premium Rewards Card rewards structure
The Bank of America Premium Rewards Card offers 2x points on travel and dining, and 1.5x points on all other purchases. Since points can be redeemed for one cent each, that means the card offers 1.5-2% cash back.
On the surface that’s not very good, since the Citi® Double Cash Card offers 1% cash back on every purchase, plus an additional 1% cash back when you pay for those purchases.
But there’s a secret weapon to this card.
This card offers bonus points on travel purchases
Perks of the Bank of America Premium Rewards Card
This card offers two big perks that can help cover the annual fee, and then some. Specifically, the Bank of America Premium Rewards Card offers:
- A TSA Pre-Check or Global Entry fee credit up to once every four years
- A $100 airline incidental statement credit annually for qualifying purchases
- No foreign transaction fees
- Chip & signature technology
How the Premium Rewards Card airline credit works
As you can see, the $100 airline incidental credit alone is potentially worth more than the $95 annual fee, so you could come out ahead on that alone. What qualifies for the Premium Rewards Card airline fee?
They include the following purchases made on domestic-originated flights on certain US domestic airlines:
preferred seating upgrades, ticket change/cancellation fees, checked baggage fees, in-flight entertainment, onboard food and beverage charges, and airport lounge fees affiliated with eligible airline carriers
Meanwhile, the terms state that the following don’t qualify:
airline ticket purchases, mileage point purchases, mileage point transfer fees, gift cards, duty-free purchases, award tickets and fees incurred with airline alliance partners do not qualify
You have to use your card to pay eligible incidental fee transactions, and statement credits will post to your account within seven days. There’s no registration or airline designation requirement.
Use your airline fee credit to purchase a lounge day pass
How redeeming points on the Premium Rewards card works
Points earned on the Bank of America Premium Rewards Card can be redeemed for one cent each, and you can redeem when your points balance is 2,500 or higher. You can choose whether you want to redeem your points as:
- A statement credit
- An electronic deposit into a Bank of America checking or savings account
- A contribution to an eligible Cash Cash Management Account with Merrill Lynch Wealth Management or Merrill Edge, or College 529 savings account held at Merrill Lynch
Points on the card also don’t expire, as long as the account remains in good standing.
Use cash back for purchases you couldn’t otherwise redeem points for
Premium Rewards points can be easily redeemed online by logging in to your BofA account and selecting the “Rewards” tab, or you can call 800.434.8313 and select option 2 (Mon-Fri 9 a.m.-9 p.m. ET)
This is where the Bank of America Premium Rewards Card goes from unremarkable to being in a league of its own (potentially).
Preferred Rewards Program tiers & bonuses
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 points 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 The Bank of America® Premium Rewards® 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 Premium Rewards Card and belong to the Platinum Honors tier, this card offers an unrivaled 2.625% return on all your spending, along with 3.5% on dining and travel.
Put another way, if you have the Bank of America Premium Rewards Card and belong to the Platinum Honors tier, you’re earning:
- 3.5% on dining
- 2.625% on non-bonused spend
That’s an unrivaled return on everyday spending!
For example, you could pay your taxes by credit card for a fee of 1.87% and earn 2.625% rewards, so that gives you a 0.75% return on your tax payments.
This is truly ridiculously generous, as they presumably lose money on you on every transaction.
Preferred Rewards Program eligible balance
The balance is determined based on your qualifying Bank of America deposit accounts and/or your qualifying Merrill Edge and Merrill Lynch investment accounts. Eligible brokerage accounts include IRAs, so rolling over an old 401k could be an interesting option for some to help meet the higher thresholds (though of course check with your own financial advisors to determine if this makes sense for your situation).
Obviously, these are significant balances, though I’d note that you have some highly flexible options as to what qualifies towards these amounts, including being able to trade your own stocks, for example.
On the surface, the Bank of America Premium Rewards Card is a pretty average card with a good welcome bonus and decent rewards structure. However, combining it with the Preferred Rewards Program potentially puts this card into a league of its own.
Being able to earn 2.625% on your everyday spending is something that’s not offered by any other credit card. So this card most definitely won’t be for everyone, but for those who either have assets with Bank of America or have the option of moving assets to Bank of America, this card is incredible.
I find the business case for this to be fascinating. It’s one thing for a card to have generous bonus categories, but I imagine Bank of America is losing money on every transaction here, and they’re using this card primarily to get people to increase their banking relationship with them.
If you have $100,000 in assets with Bank of America, or can move them to Bank of America without much of an opportunity cost, I recommend applying for the Bank of America Premium Rewards Card.
Even for others, it can be worth picking up the card for the solid bonus, and seeing how you like it.