The Bank of America Cash Rewards credit card is a cash back card with a twist. Cardholders can juice their cash back earning potential by selecting an eligible category to earn 3% cash back in each month. This card really starts to shine if you are an existing Bank of America customer and qualify as a Preferred Rewards client. This will increase your earnings by between 25% - 75%, depending on your average account balances with Bank of America.
First, you're going to need to select a category to earn 3% cash back in each month. Eligible categories include gas, online shopping, dining, travel, drug stores, or home improvement/furnishings. Then, you'll earn an additional 2% earn rate at grocery stores and wholesale clubs. The 2% and 3% categories are capped at the first $2,500 in spend each quarter, which makes things a little complicated. All other purchases earn 1% cash back. As we mentioned, the real value comes in being a Bank of America Preferred client.
Now that we have you on the edge of your seat, here’s how Preferred Rewards works. Existing Bank of America customers are lumped into rewards earning tiers based on their combined balances with Bank of America and Merrill Edge. The more money you have tucked away in your account the more rewards you’ll earn. It’s true what they say. It takes jars of pennies to make jars of pennies.
|Tier||Account Balance||Earning Potential|
|Gold||$20,000 - $49,999||>25%|
|Platinum||50,000 - $99,999||50%|
As you can see in the tables above and below, this changes the game a bit. If you are an existing Bank of America customer and you redeem your cash back into a Bank of America account, your earn rate in your eligible category could be up to 5.25% cash back. This is one of the best earning rates out there. Even at the lowest tier, 3.75% is one of the stronger offers on the market today.
|Tier||Everyday Purchases||Grocery & Wholesale||Rotating Category Purchases|
A reward earning feature that sets this card apart from some competitors is the lack of rotating categories. Some cards will offer flashy 5% cash back categories that changes every 3 months. In our experience, it takes a dedicated person to really get values out of these. This card takes the guess work out of earning by keeping enhanced earn rates static on gas and grocery purchases. We’d definitely prefer to see a higher earn cap on the quarterly spend. If your family goes through food like ours does, you can approach that $2500 cap pretty quickly!
Earn rates aside, the Bank of America Cash Rewards card has some additional perks that help round it out. A no annual fee product is a good way to reduce costs on a line of credit you may already have open. It’s also a nice way to start building your credit history. If you outgrow this card later, you can hold on to it to help with your average age of accounts without worrying about an annual fee. This card also offers 0% on purchases for the first 12 billing cycles.
This card has a lot of math to keep track of. Are there any other benefits or bonuses that can help you justify the mental gymnastics?
We’d only recommend this card to those who already have an existing relationship with Bank of America or those planning to open a checking or savings account with them soon. Bank of America really values long term relationships, so this it a winner for those looking for a more entry level product and will help you build a relationship for other product lines down the road, or for more established customers that would benefit from the increased earning potential. Frequent travelers might want to consider pairing this card with the Bank of America Premium Rewards card.
Keep in mind that getting this card will require good to excellent credit.
Those that have a tendency to carry a balance from month to month. This is not the, so if you have an established credit history you will be best off shopping around a bit more. Also, since this is a rewards card, it’s base APR is higher than a more basic non-rewards card. If you’re going to carry a balance, let’s keep looking for ways to save, shall we?
Additionally, if you're going to hit that $2,500 threshold each quarter this probably isn’t the best card for you. We'd take a look at a card that earns uncapped rewards, like our favorite cash back card, the Uber Visa.
This is going to vary based on your situation, but does stashing $100k with Bank of America make sense to you? There are many good options for storing cash within the Bank of America family, but we beg you, do not open a Bank of America savings account. Their abysmal interest rate for savers will negate any credit card rewards you may receive.
The Bank of America Cash Rewards Card is a middle of the road cash back credit card. It’d help round out the wallet of a user that already has or would like to establish a relationship with Bank of America long term. Bank of America does offer the full gamut of financial products, such as mortgages, auto loans, and investing tools. This could be a solid start if you’re looking to build a portfolio with a major financial institution. If you're worried about getting approved for the card, Bank of America is partnered with Card Match. You can see if your credit profile is a match for the card before applying.