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Bank of America has a solid lineup of cards worth looking into, especially if you’re an existing Bank of America customer. The Bank of America Cash Rewards credit card, for example, offers a unique choose-your-category rewards structure and an easy-to-hit sign-up bonus. If you’re a credit card beginner with a smaller budget, it just might be the perfect card for you.

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Who Is This Card For?

Bank of America’s intro cash back credit card is perfect for existing Bank of America customers who want to dip their toes into the credit card rewards game. The card comes with no annual fee and high earning potential for cardholders who qualify for Bank of America Preferred Rewards. Busy families or those whose spending habits fluctuate throughout the year can also get value from the card’s choose-your-category rewards structure, which you can adjust as often as every month to fit your lifestyle.

Keep in mind that the card does cap its bonus categories at $2,500 in combined bonus category purchases each quarter, so those who spend more can more value elsewhere. Furthermore, your redemption options are best suited for those with existing Bank of America accounts. You’re earning cash back that can be redeemed in the form of a statement credit or deposited into eligible Bank of America or Merrill Lynch accounts. While you don’t have to worry about point valuations or a wide range of potential redemption options, that might not appeal to frequent travelers who can often get more value by taking the time to strategize redemptions. Beginners, however, could enjoy the simplicity of the redemption process.

Sign-Up Bonus

The BoA Cash Rewards card offers a modest $200 cash back bonus after spending $1,000 within the first 90 days of account opening. It’s certainly not the most competitive bonus out there, but it’s easy to earn. More premium cash back cards may offer anywhere from $300 to $500 as a sign-up bonus, but that will come at a higher spending threshold (typically $3,000 in the first three months) and an annual fee (typically starting at $95).

A $200 bonus isn’t going to get you a round-trip ticket to Italy or Singapore, but you can find some domestic fares for under $200 depending on where you live. Plus, $200 is a nice discount on a more expensive plane ticket. This bonus can also get you one night at Marriott’s new Indonesian “glamping” experience, Natra Bintan.

Natra-Bintan-glamping-tent-interior
Natra Bintan’s glamping interior (Photo courtesy of Natra Bintan)

Earning

For a card with no annual fee, this card offers a generous rewards structure — especially for BoA customers who qualify for the Preferred Rewards program.

Cardholders earn 3% cash back on one of the following categories of your choosing: gas, online shopping, dining, travel, drug stores or home improvement/furnishings. You’ll also earn 2% cash back at grocery stores and wholesale clubs. Note that there’s a $2,500 cap on combined 3% and 2% cash back purchases; you’ll earn 1% afterward.

All of the bonus categories are fairly broad. Travel includes traditional travel expenses like airfare and hotels, plus transit, home rentals like Airbnb, tourist attractions and more. Dining includes both dine-in and take out. The drug store category includes anything bought at a drug store, from prescription purchases to gift cards to batteries. The home improvement category counts hardware store purchases and services like landscaping, plumbing, electrical and more. Gas includes gas stations and marinas, so you can earn money filling up your car or your boat. Online shopping is also a broad category.

Bank of America allows you to change your selected 3% cash back category each month, so you can easily customize this rewards structure to fit your needs. Going on a trip this fall? Select travel as your bonus category for the month you book your trip. Plan on replacing some of the plumbing in your bathroom this fall? Pick home services that month to earn bonus rewards on the service. Have kids who are prone to getting the flu? Choose drug stores to earn cash back on the cost of flu shots and prescriptions during flu season.

If you are eligible to enroll in BoA Preferred Rewards, this card could earn even more cash back. You’ll need an eligible Bank of America personal checking account and a 3-month average combined balance of $20,000 or more in a Bank of America account and/or Merrill Edge or Merrill Lynch investment accounts to enroll. There are three tiers you can fall into based on the 3-month average account balance.

Spend Categories Regular Cardholder Tier 1 – Gold ($20,000 – $50,000) Tier 2 – Platinum ($50,000 – $100,000) Tier 3 – Platinum Honors ($100,000+)
3% Bonus Category 3% cash back 3.75% cash back 4.5% cash back 5.25% cash back
2% Bonus Categories 2% cash back 2.5% cash back 3% cash back 3.5% cash back
Other Spending 1% cash back 1.25% cash back 1.5% cash back 1.75% cash back

 

The Preferred Rewards program also offers an Interest Rate Booster for eligible savings accounts and other banking and investment perks.

If you qualify for Platinum Honors, you can earn up to $131.25 in bonus cash back each quarter. That’s more than $500 every year for only $10,000 in annual bonus category spend. Keep in mind, this card doesn’t charge an annual fee, so for those who already qualify for the Preferred Rewards program, you’re essentially getting up to $525 in free bonus cash back annually.

Redeeming

Unfortunately, the redemption options for the Bank of America Cash Rewards credit card are lacking. You currently have four options:

  1. Redeem your cash back as a statement credit
  2. Deposit your cash back into an eligible Bank of America checking or savings account or an eligible Merrill Lynch or Merrill Edge account
  3. Redeem as a contribution to a qualifying 529 account with Merrill Lynch or Merrill Edge
  4. Redeem for a check starting at $25

If you are an existing Bank of America or Merrill customer, you can easily use your cash back to contribute to your accounts. However, if you’re hoping to find added value by redeeming for travel, this isn’t the card for you.

Cash back has a fixed-rate value (1% is worth 1 cent per dollar). While savvy travelers might find cash back lackluster as a rewards option, beginner travelers or those just looking for a way to save on everyday expenses will enjoy the lack of hoops to jump through. You don’t have to worry about rewards valuations shifting or subpar redemption options. No matter how you plan on redeeming, you’re getting the same value out of your rewards.

Perks

The Bank of Ameria Cash Rewards credit card doesn’t come with any real additional perks or benefits aside from standard consumer protections, but it does come with World Mastercard benefits, including:

Concierge Services – You can get assistance buying gifts, arranging delivery services, booking event tickets and more.

Mastercard Travel Services – This service is operated by Carlson Wagonlit Travel, and it can help arrange your travel.

Enhanced Price Protection – All Mastercard holders receive a perfunctory 60-day price protection window where you’ll be reimbursed if an eligible purchase experiences a price drop. World Mastercard holders have extended coverage for 120 days.

ShopRunner – Receive unlimited free two-day shipping and return shipping on purchases made from over 140 eligible online stores using ShopRunner.

Postmates Rebate – Get $5 back on every Postmates purchase of $25 or more (not including taxes, delivery fees or tips).

Which Cards Compete With the BoA Cash Rewards?

For existing Bank of America customers, other Bank of America credit cards are the most direct competitors of the BoA Cash Rewards card. The Bank of America Premium Rewards credit card offers unlimited 2x points on travel and dining and 1.5x points on everyday purchases, plus a higher sign-up bonus and perks like a $100 airline fee credit Global Entry/TSA PreCheck application fee credit and travel protections. The Bank of America Travel Rewards credit card offers unlimited 1.5x points on all purchases and a higher sign-up bonus.

Upon first glance, the BoA Cash Rewards card gets a higher potential return (up to 5.25% cash back with Cash Rewards vs. up to 3.5% return with the Premium Rewards and 2.625% with the Travel Rewards), but remember that the Cash Rewards has a $2,500 quarterly cap on bonus category earnings. While someone who’s only spending around $800 a month will still benefit more from the rewards structure of the Cash Rewards, larger budgets will likely earn more with the Premium or Travel Rewards cards. For example, if you’re spending $20,000 each year (around $1,667 a month) on travel and/or dining, you’ll end up earning more with the Premium Rewards credit card. That level of spend with the Cash Rewards will earn up to $625 for Platinum Honors members, while Premium Rewards cardholders can earn up to $700 as Platinum Honors members. That’s also not considering the additional perks you get with the Premium Rewards card.

For non-BoA customers, the US Cash+ Visa Signature card is another competitor. You’ll earn 5% cash back on the first $2,000 you spend on your choice of two categories, plus unlimited 2% cash back on your choice of grocery store, gas station or restaurant purchases. The eligible categories change every now and again, but you can see the current list here.  The categories aren’t quite as broad, but include a larger variety (such as streaming services and gyms/fitness memberships). If you aren’t eligible for Bank of America Preferred Rewards, this could be a better option for you long term.

Bottom Line

If you qualify for Preferred Rewards through Bank of America, the BoA Cash Rewards card has the potential to offer lucrative rewards for smaller budgets. Frequent travelers and those with larger budgets will probably get more out of one of Bank of America’s more premium cards.

Also keep in mind that Bank of America cards are best suited for those who use other Bank of America products like their savings and investments accounts. Those who bank elsewhere can find a higher cash back rate with cards offered by other issuers.

Featured photo by Isabelle Raphael/The Points Guy

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