Channeling Daenerys Targaryen, Bank of America has soared into the battle field bringing new blood to the rewards card market. The Penny Jar is glad to see the fresh face and we will gladly bend the knee. Launched in September of 2017, the Premium Rewards card is the newest addition to the Bank of America card portfolio. As the name implies, Bank of America is looking to compete in the premium card space and retain their best customers. In the process, they aren't planning to take any prisoners.
Don’t let the premium name and other reviews fool you - this card is a card of the people and isn’t designed to compete with the ultra-premium cards with annual fees over $400. This isn’t a Chase Sapphire Reserve, AmEx Platinum, or a Citi Prestige, and it’s not meant to be. This card is meant to appeal to the masses and compete against the Citi Premier and the Chase Sapphire Preferred, and it does that brilliantly.
On the Surface:
At a high level, it’s easy to see the card’s brilliance. The Premium Rewards card offers a 50,000 point bonus if you spend $3,000 on the card in the first 90 days of account opening. That’s a value of $500. Just think of all the Game of Thrones Wine you could buy. You’ll also earn 2 points on travel and dining purchases, and 1.5 points on all other purchases. Points are worth a penny a piece.
In addition to earning points, you’ll also get a $100 annual statement credit for airline incidental purchases. This could be seat upgrades, lounge access, inflight drinks, and we can probably stop at inflight drinks. Additionally, you’ll get up-to a $100 statement credit for TSA PreCheck or Global entry.
Additional premium features include access to premium hotel perks when you make reservations through the Visa Luxury collection. This may include things like a $50 resort credit, best available room on check-in, etc. The perks vary by hotel. You’ll also receive trip insurance for lost baggage, trip delays, and the like. These are ancillary benefits you hope you don’t have to use, but it’s a nice background feature.
The card does come with a $95 annual fee, but if you take advantage of incidental credit each year, you are effectively washing out the annual fee and left with a card that offers a competitive rewards structure.
This all seems pretty easy. Let’s throw in a plot twist!
If the Iron Bank is on your side, you are sure to win. Bank of America accelerates rewards for existing customers that carry balances in their checking, savings, or investment accounts. You’ll be grouped in a tier for Preferred Rewards based on your existing balances and the rewards earning potential on your credit card will be accelerated accordingly. The real sweet spot here is if you have 100k invested with Merrill Lynch. It’s hard to justify keeping 100k in a Bank of America savings account - they have some abysmal APYs. As of 9/21, the rate on a Bank of America savings account is .01%, whereas industry standard is closer to 1%.
BOA Preferred Rewards Point Earning
|Spend Category||Base |
Bank Of Ameirca Premium Rewards - Slaying the Competition
|Category||BOA Premium||BOA Premium Gold||BOA Premium Plat||BOA Premium Honors||Sapphire Preferred||Citi Premier|
*The Citi Premier earns 3x points on gas. We allocated $100 monthly out of the other category to travel for the Citi Premier.
One thing to keep in mind is that the Sapphire Preferred and Citi Premier offer points that can be transferred out to qualifying travel partners. We valued their points at 1.25 cents each for this exercise, but with the right travel redemptions you could see values upwards of 2 cents each. Bank of America Premium Rewards does not offer the same flexibility.
For the average consumer that is going to use points to redeem for cash or statement credits, the Bank of America Premier Rewards card is a clear best in class offer. If you like the flexibility of transferring points to travel partners, the Sapphire Preferred would probably be a good first choice, as it offers more travel partner flexibility than the Citi Premier. Just remember, winter is coming and you’re going to want that 3x points on dining. It’s bulking season yo.