Not to be underestimated: Bank of America Premium Rewards credit card review

Mar 12, 2020

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Bank of America Preferred Rewards card overview

If you qualify for Bank of America Preferred Rewards, the Bank of America® Premium Rewards® credit card has the potential to be quite a lucrative card to use on everyday spending. For those who prefer other banks, there are better earning travel cards available. Card Rating*: ⭐⭐⭐½

*Card Rating is based on the opinion of TPG’s editors and is not influenced by the card issuer.

I’ll be honest, I haven’t always been a fan of Bank of America credit cards. Though affordable, with low or nonexistent annual fees, most lacked the perks that I’ve always associated with my favorite cards. However, the more familiar I get with the Preferred Banking Rewards program (and the more useful fixed-value points currencies become), the more I see the benefits of having a Bank of America card.

This card isn’t like other products that have $450 annual fees and a ton of perks; this card has a modest $95 annual fee and a more modest selection of benefits. Still, it offers great flexibility in redeeming points and yields extraordinary earn rates if you can maximize BofA’s Preferred Banking Rewards program.

In This Post

Who is this card for?

(Photo by The Points Guy)
(Photo by The Points Guy)

The Premium Rewards credit card has a wide appeal to both points fans and credit card novices. It might not have the most lucrative points or numerous transfer partners, but what it does offer is simplicity.

I think of it as a stress-free travel card. Since points are worth 1 cent apiece no matter what you redeem them for, you don’t have to worry about getting the maximum value out of every point, which can sometimes be time-consuming and frustrating. If you like the idea of redeeming your points as a statement credit against big purchases that aren’t covered by points — such as new luggage or a TV — then this would be the card to get. You can redeem points for any purchase, whether it’s a flight, a new car or an over-the-top dinner. The points function essentially like cash back.

Related reading: 5 reasons to get the Bank of America Premium Rewards credit card

The Premium Rewards card is also a strong option for those who tend to spend in broad bonus categories like travel and dining (2x and up with this card), but who also want solid rewards (1.5x and up) for non-category bonus spend. And if you are an existing Bank of America customer, the card becomes even more valuable (more on that later).

It’s also a great choice for semi-frequent travelers since it comes with valuable perks like an up to $100 Global Entry/TSA PreCheck credit, an up to $100 airline credit, trip delay/cancellation insurance, baggage loss/delay insurance and no foreign transaction fees, so you won’t be hit with any surprise charges when using your card abroad.

Related reading: Is the Bank of America Premium Rewards card worth the $95 annual fee? 

Welcome bonus — modest, but valuable

With the Premium Rewards card, you’ll receive 50,000 bonus points after you spend $3,000 on purchases in the first 90 days of account opening. These points have a fixed value of 1 cent each, meaning that this bonus is worth $500. This far from the most lucrative bonus out there, but $500 can go a long way towards airfare, hotel costs or anything in between.

When you consider that BofA is essentially paying you $5 every year (after you redeem the up to $100 airline credit) to have this card, you’re basically getting $500 for free just for signing up and meeting the minimum spend. Use the sign-up bonus to treat yourself to something extravagant, such as a helicopter or private jet ride on Blade.

(Photo by Benji Stawski/The Points Guy)
You can use the welcome bonus on redemptions you otherwise couldn’t use points or miles on, such as a private jet ride with Blade. (Photo by Benji Stawski/The Points Guy)

While Bank of America doesn’t have any published restrictions that apply specifically to earning welcome bonuses, remember that it does have the infamous 2/3/4 rule when it comes to card applications. You can only get approved for two Bank of America cards in a two-month period, three cards in a 12-month period and four cards in a 24-month period.

In 2019, there were reports of a threshold similar to Chase’s 5/24 rule that limits how many cards across issuers you can get within a year in order to be approved for a new BoA card. The exact threshold is uncertain and Bank of America has not confirmed the existence of a set policy, but it is something to keep in mind.

Main perks and benefits

While the Premium Rewards card doesn’t hold a candle to top-tier cards such as The Platinum Card® from American Express, it does come with a nice set of perks for the low annual fee — a lot more than basically any other mid-tier card out there. Here are my favorite perks and their value:

$100 airline incidental credit — This credit works like the Amex airline fee credit in that you can only use it for purchases such as seat upgrades, baggage fees, in-flight services and lounge fees (and not airfare). You receive the credit every year, and if you’re able to use the full amount, you’re essentially getting paid $5 a year to be a cardholder. Unfortunately, it’s not as flexible as the Chase Sapphire Reserve’s travel credit or the Citi Prestige® Card’s travel credit, but it’s still a great benefit for someone who travels a few times a year. It only works on certain domestic airlines, but it’s processed automatically, so you don’t have to call in and apply it to a certain purchase. The information for the Citi Prestige has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

Global Entry — I love having Global Entry — it’s saved me from standing in countless hours of security and customs lines. Premium Rewards cardmembers get an up to $100 credit (every four years) that can be applied toward purchasing Global Entry or TSA PreCheck. It’s surprising that this card offers a Global Entry credit, as that’s usually only offered by top-tier rewards cards with higher annual fees (although the Capital One® Venture® Rewards Credit Card is another mid-tier card that offers this benefit). If you’re already part of the program, you can still use the credit for a friend or family member’s application.

Travel protections — With the Bank of America Premium Rewards Card, you’ll get insurance protections including trip delay/cancellation/interruption insurance, baggage delay/loss insurance, emergency evacuation, transportation and travel and emergency assistance services and rental car insurance. As more and more cards cut these types of protections, having a card that does offer them is increasingly valuable.

IMG-Away-Luggage
If your bag is lost, stolen or damaged, the card’s protection plan will help pay to replace all of your items. (Photo courtesy of Away)

Purchase protection — I’ve used purchased protection many times and it’s saved me thousands of dollars over the last year — Amex paid me $1,400 for a broken watch and my Sapphire Reserve reimbursed me $2,600 for a painting that was damaged in transit. You’ll get similar protection with the Premium Rewards card, which will repair, replace or reimburse you up to $10,000 for lost or damaged items purchased on the card. If you want to return an item within 90 days of purchase but the retailer won’t accept the return, you can submit your receipt and be reimbursed up to $250 (up to $1,000 annually).

Related reading: Maximizing benefits with the Amex Platinum Card

Earning points

(Photo by Jens Kalaene/picture alliance via Getty Images)
Earn more points for dining with the Bank of America Premium Rewards card. (Photo by Jens Kalaene/picture alliance via Getty Images)

With this card, you’re earning 2x points on travel and dining and 1.5x point on everything else. Travel and dining are defined broadly, meaning there are a lot of expenses that can qualify for double points. The real value for me personally is the 1.5x on everyday spending. As a member of the Preferred Rewards program, you can earn up an impressive 2.625x on non-bonus spending. That’s higher than any flat-rate card out there.

Related reading: The best credit cards for dining out — and ordering in

The Premium Rewards card doesn’t earn traditional points or miles that can be transferred and redeemed with travel partners. It acts more like some of our best cash back credit cards with huge earning potential. I honestly never thought I’d be thinking about cash back, but as airlines have devalued frequent flyer programs, the idea seems more appealing.

Although we value most airline miles at more than 1 cent each, that’s mainly based on being able to find premium cabin saver seats. With it becoming harder and harder to get good value out of points and miles, that’s where this card can come in handy.

Points are flexible with the Premium Rewards card; you can use them on anything — airlines, the gym, etc. — essentially anywhere that accepts Visa. Your points can go toward paying for those purchases (as a statement credit) and the credit posts automatically.

Related reading: How I earned and redeemed with BoA Premium Rewards 

Redeem points

Another thing I like about this card is that it’s zero stress and consumes very little time. You don’t need to jump through hoops to find award availability and you don’t have to go to a specific portal if you want to use your points to pay for your gym. Since points are worth the same no matter what you redeem them for, you’re not penalized for redeeming them for cash back. You just redeem for whatever you want.

There a few ways to redeem points:

  • Cash back — You can receive cash back as a statement credit or deposit it into an eligible BofA checking or savings, Merrill or 529 college savings account
  • Travel purchases — You can book flights directly through the BofA travel portal. This is a good way to redeem points because you’ll still be eligible to earn award miles and elite credits by flying on a paid ticket (although personally I’d recommend buying directly from the carrier, because sometimes when buying through a travel portal you’ll get a lower fare class).
  • Gift cards — A final option allows for converting points into gift cards at popular merchants such as Amazon, Whole Foods and Starbucks. I wouldn’t plan on going this route, since it’d be smarter to just purchase the items and redeem your points as a statement credit in case you have to return the item.

I especially love that you can convert points directly into cash that can go straight into a 529 college savings account. Last year, I converted the points from my sign-up bonus and deposited them directly into 529 accounts for my nieces and nephews. After that, I used my additional points as statement credits against BLADE trips to my office, which saved me hours of time.

And if you’re solely focused on travel rewards, this card can cover travel expenses that you can’t redeem miles for, like offsetting surcharges on an award ticket or amazing experiences on the ground.

Disneyland Sleeping Beauty Castle in California
Because points are always worth one cent each, you can use points to pay for travel experiences like your tickets to Disney World. (Photo by Joshua Sudock/Disneyland Resort)

Originally when I heard that points were worth only 1 cent each, I was a bit disappointed. But it’s honestly nice that I don’t have to jump through hoops to find award availability and I don’t have to feel bad about redeeming these points for maximum value. I can use them whenever and for whatever I want.

Related reading: How to redeem points using the BoA Premium Rewards card 

Using the Preferred Rewards program to your advantage

To get the best value out of your Bank of America cards, you need to understand Bank of America’s Preferred Rewards program. Those who hold considerable assets in eligible BofA or Merrill accounts — including retirement or investment accounts — are eligible for increased rewards when spending on the Premium Rewards card. To enroll in BofA Preferred Rewards 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 investment accounts.

There are three tiers in Preferred Rewards, and your tier is based on how much money you have in your accounts. This will determine your earning with the Premium Rewards card.

Spend Categories Regular Cardholder Tier 1 – Gold ($20,000 – $50,000) Tier 2 – Platinum ($50,000 – $100,000) Tier 3 – Platinum Honors ($100,000+)
Travel/Dining Earnings 2x points 2.5x points 3x points 3.5x points
Other Earnings 1.5x points 1.875x points 2.25x points  2.625x points

At the base level of 2x points on travel and dining and 1.5x points on everything else, the card is pretty standard. It’s good, but the Citi® Double Cash Card and Fidelity Rewards Visa Signature Card are cash-back cards with higher earning rates on everyday spend and no annual fees (though those cards don’t come with any perks). The information for the Fidelity Rewards Visa has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

But the numbers get pretty spectacular when you’re able to get 2.625x points on everyday spend and 3.5x points if you meet the highest banking threshold. That said, I’ll still probably put most of my travel and dining spend on my Sapphire Reserve because I value Ultimate Rewards points at 2 cents each — meaning I get 6x points (toward travel per dollar spent). But 3.5x points back on travel and dining and 2.625x points on everything else for those who don’t value travel as much as I do — and want flexibility when redeeming points — is quite strong.

The way I see it is that if you can maximize Preferred Rewards, you’re essentially getting a no-annual-fee card (after using the airline credit) that gives you 3.5x on travel and dining and 2.625x on everything else. If you’re looking for a straight cash-back card, no other card comes close to that.

The moment I heard of this card, I immediately moved $100,000 into a Merrill investment account so I could start qualifying for Platinum Honors. BofA also allows the option to roll over an existing 401(k) account into a Merrill retirement account, so that this could be an easy way to qualify for Preferred Rewards.

Related reading: Stop ignoring the Bank of America Preferred Rewards program 

Bottom line

In general, this card is about diversifying your stock of points and using them for the purchases that normal airline miles or credit card points can’t cover. It’s great if you want to use your points to splurge on a crazy watch or piece of jewelry — or you can be generous and use the points to better your family.

It’s also an interesting option for small business owners. I know a lot of doctors and executives, and at a certain point there is mileage overload where they have too many Amex points and physically can’t redeem all of them for travel (because that is the best way to redeem MR points). So if you own your own business, this card can offer 2.625x points on all of your spend and 3.5x points on all travel and dining, which you can easily redeem for cold hard cash.

For those who have been eyeing a straight-up cash-back card, this could be your best option. Simply put, it’ll be improving your bottom line — either for you personally or for your business. You don’t have to waste time figuring out how to get the most value out of your points, as the stress-free redemptions make this an easy card to manage.

BofA is obviously telling customers that they will be rewarded with its Preferred Rewards program if they move their assets to BofA. On top of the earning and redeeming possibilities, it comes with a solid sign-up bonus and some pretty nice perks, which are worth far more than the card’s annual fee. For these reasons, I continue to be excited to have status with Preferred Rewards banking and to have the Bank of America® Premium Rewards® credit card in my wallet.

Additional reporting by Madison Blancaflor.

Featured photo by Isabelle Raphael/The Points Guy.

Chase Sapphire Preferred® Card

WELCOME OFFER: 60,000 Points

TPG'S BONUS VALUATION*: $1,200

CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners

*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.

Apply Now
More Things to Know
  • Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards®
  • 2X points on travel and dining at restaurants worldwide, eligible delivery services, takeout and dining out & 1 point per dollar spent on all other purchases.
  • Get 25% more value when you redeem for travel through Chase Ultimate Rewards®. For example, 60,000 points are worth $750 toward travel.
  • Get unlimited deliveries with a $0 delivery fee and reduced service fees on orders over $12 for a minimum of one year on qualifying food purchases with DashPass, DoorDash's subscription service. Activate by 12/31/21.
  • Earn 2x total points on up to $1,000 in grocery store purchases per month from November 1, 2020 to April 30, 2021. Includes eligible pick-up and delivery services.
Regular APR
15.99%-22.99% Variable
Annual Fee
$95
Balance Transfer Fee
Either $5 or 5% of the amount of each transfer, whichever is greater.
Recommended Credit
Excellent/Good

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.