Link: Apply now for the Bank of America® Premium Rewards® credit card with 60K bonus points
With airlines having largely devalued their frequent flyer programs over the years, there’s more value than ever before in getting a cash back card. After all, a cash back card gets you money that you can spend on anything, including travel.
The Bank of America® Premium Rewards® credit card has the potential to be the single most lucrative cash back credit card out there for everyday spending, as you can earn up to 2.625% cash back on all purchases. That’s virtually unheard of, though there are some hoops to jump through.
In this post I wanted to take an in-depth look at this card. First let’s cover the basics of the card, and then we’ll talk about the Bank of America Preferred Rewards program, which is what transforms this card from ordinary to extraordinary.
In this post:
Bank of America Premium Rewards Card basics
Let’s go over the details of the Bank of America Premium Rewards Card, including the welcome bonus, annual fee, rewards structure, and perks. Let me again emphasize that this card might just seem ordinary at first, so you’ll want to read on to the section about the Preferred Rewards program.
Premium Rewards Card 60K bonus points offer
The Bank of America Premium Rewards Card is offering a best-ever welcome bonus of 60,000 points after spending $4,000 within the first 90 days. Points on this card can be redeemed for one cent each, meaning the bonus is worth $600 cash back, which is quite good.
Note that this card had the same bonus of 50,000 points for years, so this new bonus is 20% better than before. If you’ve been considering this card, you’ll definitely want to apply with this current offer.
Per the terms of the application, the welcome bonus may not be available if you currently have this card, or have had the card in the past 24 months. However, you should be eligible for the bonus if you’ve had any other Bank of America card.
Premium Rewards Card $95 annual fee
The Bank of America Premium Rewards Card has a $95 annual fee, which isn’t waived for the first year. This puts the annual fee in line with many other mid-range credit cards, including the Chase Sapphire Preferred® Card (review) and Citi Strata Premier℠ Card (review). Personally I think the annual fee is easy to justify from the $100 airline credit alone.
Premium Rewards Card 1.5-2x points rewards structure
The Bank of America Premium Rewards Card offers 2x points on travel and dining, and 1.5x points on all other purchases, all with no foreign transaction fees. 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 too exciting, since there are some other cash back cards that offer the equivalent of 2% back on all purchases. But as I’ll discuss below, the Preferred Rewards program can increase your rewards by up to 75%, putting this card in a league of its own.
Premium Rewards Card redeeming points
As I mentioned above, the Bank of America Premium Rewards Card offers points that can be redeemed for one cent each. How does that work in practice? When your points balance is 2,500 or higher, you can choose from a variety of ways to redeem your points at that rate, including:
- 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 Wealth Management or Merrill, or College 529 savings account held at Merrill
Points on the card also don’t expire, as long as the account remains in good standing. 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.
Premium Rewards Card $100 airline incidental credit
One of the easiest ways to justify the $95 annual fee on the Bank of America Premium Rewards Card is with the card’s annual $100 airline incidental credit. What qualifies for the airline fee credit? This includes purchases made on domestic-originated flights on certain US airlines, including for the following:
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 doesn’t qualify for this credit:
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. Anecdotally I’ve seen pretty positive reports with being able to use this perk.
Premium Rewards Card TSA PreCheck or Global Entry credit
The Bank of America Premium Rewards Card also offers a TSA PreCheck or Global Entry fee credit once every four years. Just charge the eligible fee of up to $100 to your card, and you’ll automatically be reimbursed. You can even use this for someone else, as many cards offer these credits nowadays.
Bank of America Preferred Rewards program
This is where the Bank of America Premium Rewards Card goes from average to incredible. As mentioned above, ordinarily, this card earns rewards worth 1.5-2% back, though you can do significantly better than that in conjunction with this program, making this a best-in-class card.
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:
Gold | Platinum | Platinum Honors | Diamond | |
|---|---|---|---|---|
Required 3-month average combined balance | $20K to | $50K to | $100K to | $1M to |
Rewards bonus on eligible BofA credit cards | 25% | 50% | 75% | 75% |
Effective category bonus | • 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 | • 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 (or above), you’re earning:
- 3.5% on dining and travel
- 2.625% on non-bonused spending
That’s an unrivaled return on everyday spending! For example, you could pay your taxes by credit card for a fee of 1.85% and earn 2.625% rewards, which gives you a 0.775% return on your tax payments. This is extremely generous, as Bank of America presumably loses money on most transactions.
Preferred Rewards program eligible balance
Obviously having to deposit $100K with a bank is a significant hurdle. Even if you have $100K sitting around, you might not want to park it somewhere just to get elevated credit card rewards. However, I think it’s worth highlighting how much flexibility you have with that balance requirement.
The balance is determined based on your qualifying Bank of America deposit accounts and/or your qualifying investment accounts with Merrill. Eligible brokerage accounts include IRAs, so rolling over an old 401(k) 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 toward these amounts, including being able to trade your own stocks, for example.
Bottom line
On the surface, the Bank of America Premium Rewards Card is a pretty average card with a nice 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% cash back on your everyday spending is something that’s not offered by any other credit card. 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 is 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.
A word of caution: you must open and MAINTAIN a Bank of America checking account to get the enhanced benefits. As a significant Merrill Lynch investment customer, I had specifically asked the BofA rep what minimum balance I needed to maintain to qualify and was told "zero" so I let them open an account which I left unfunded and unused. Several months later, however, BofA closed the checking account due to "inactivity" so in response...
A word of caution: you must open and MAINTAIN a Bank of America checking account to get the enhanced benefits. As a significant Merrill Lynch investment customer, I had specifically asked the BofA rep what minimum balance I needed to maintain to qualify and was told "zero" so I let them open an account which I left unfunded and unused. Several months later, however, BofA closed the checking account due to "inactivity" so in response I have cancelled the credit card. The BofA app in general is about the most "kludgy" of the banking apps -- difficult to use, short on information, and rather confusing.
What you don't discuss is the premium version of this card which charges a higher annual fee but does not give enough more in benefits to justify it.
I'm a Preferred Rewards member, and this is my primary credit card I use while working here in the middle east. During the December holidays I used account credits to help off-set my trips to Thailand and Vietnam.
Last two commenters miss the point.
Any securities in a Merrill account fulfill the requirements, including SEP-IRA. I just transferred an IRA, including all the securities, I had at Schwab. No trade off involved.
It does qualify but you will also need a BofA checking account too. It does qualify for receiving the bonus.
It's a tough sell given the current interest rate environment. Was much better before.
1. BoA does not offer the most competitive IRA accounts.
2. $100k would generate $4000-5000 in another bank (pre-tax though)
3. Assuming I pay $300,000-400,000 in taxes (spread of .77 percent ~ $2600). Also, spread on delaying the actual cash outlay by another 30-45 days from the charge (.5%)
4. If I put all other non bonus...
It's a tough sell given the current interest rate environment. Was much better before.
1. BoA does not offer the most competitive IRA accounts.
2. $100k would generate $4000-5000 in another bank (pre-tax though)
3. Assuming I pay $300,000-400,000 in taxes (spread of .77 percent ~ $2600). Also, spread on delaying the actual cash outlay by another 30-45 days from the charge (.5%)
4. If I put all other non bonus category spend on it - maybe another $200,000 ~ $1400
5. Best case scenario, I come out slightly ahead given the rewards are not taxes.
If we ever get crazy low interest rate environment again, it would make sense.
Not limited to BofA, anything in a Merrill account also “counts” including an IRA.
Exactly
Basically everyone getting 2.6 has a brokerage account at Merrill. Obviously, sticking more than 100k in a .1 savings account is dumb.
And even if one does happen to have cash to park, it would be best to use Merrill Edge's Institutional Money Market funds which have some of the lowest expense ratios and highest yields available to consumers (significantly better than what you would get at Schwab and Fidelity).
Merrill Edge is the best kept secret to overcome many of Bank of America's deficiencies.
$100K can easily get 4% at say Ally savings, ($4K per year.) BAC pays next to nothing. But back when all interest bearing accounts were next to nothing, this made sense.
It is not limited to BofA or to savings accounts. Investment accounts with BofA or Merrill count too.
Need to know what interest rate BofA is offering on accounts to do a proper analysis. A quick Google search shows that's it's.....0.01%.
So for $100,000 you are giving up almost $3,000 a year (pre-tax) in interest. That's a lot of money just to hit that cash back tier.
This card made sense in a low interest rate environment but unless you're spending a ton of money on it I don't see how it works for most people.
Not limited to BofA, anything in a Merrill account also “counts”, including an IRA.
I've used the $100 airline incidental credit for:
* seat upgrades (AMEX airline credit doesn't cover, though they will sometimes comp a 1-time credit)
* United Airlines Travel Bank
And I've seen credible reports of the "cheap airfare" technique working. It's basically $100 cash every year (presuming you travel and ever need something besides a regular economy seat).