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

May 04, 2022
19 min read
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Editor’s note: This is a recurring post, regularly updated with new card details.


Bank of America® Premium Rewards® credit 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.

It took me awhile to appreciate the value in Bank of America's credit card offerings. Many have low or nonexistent annual fees, but they tend to lack the perks that I’ve always associated with my favorite cards. The rewards earned also don't transfer to airline or hotel programs. Now that I have a better understanding of the Preferred Rewards banking program (and I know more about the value of fixed-rate rewards currencies), the more I see the benefits of having a Bank of America credit card.

This card isn’t like other products that have annual fees in the $400-$500 range plus a ton of perks. Instead, this card has a lower $95 annual fee and a more modest selection of benefits. Still, it offers great flexibility in redeeming points and can produce outstanding earning rates if you can maximize Bank of America’s Preferred Rewards banking program.

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Who is this card for?

(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 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: 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 (2 points per dollar and up with this card), but who also want solid rewards (1.5 points per dollar and up) for non-category bonus spending. And if you are an existing Bank of America customer, the card becomes even more valuable (more on that later).

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It’s also a great choice for semifrequent travelers, since it comes with valuable perks like an up-to-$100 Global Entry/TSA PreCheck credit, an up-to-$100 annual airline incidental statement 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: 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 is far from the most lucrative bonus out there, but $500 can go a long way toward airfare, hotel costs or anything in between.

When you consider that Bank of America 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 spending requirement. 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 credit cards you can get in a year — across all issuers — in order to be approved for a new Bank of America card. The limit depends on whether you have deposit accounts with Bank of America:

  • Bank of America customers will not be approved for a credit card if they have opened seven or more credit cards across all issuers in the past 12 months.
  • Non-customers will not be approved for a credit card if they have opened three or more credit cards across all issuers in the past 12 months.

Remember that your entire credit profile will be considered, so approval is not a guarantee, even if you fall under these numbers. Lastly, there are no restrictions in the application terms saying that you cannot get this bonus if you had the card previously or that you must wait a certain amount of time before applying again.

Related: The ultimate guide to credit card application restrictions

Main perks and benefits

While the Premium Rewards card doesn’t hold a candle to top-tier cards like The Platinum Card® from American Express, it does come with nice perks for the low annual fee — a lot more than basically any other mid-tier card out there. Let's look at the perks and what they're worth.

  • $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, change/cancellation fees, baggage fees, inflight services and lounge fees (but not airfare or purchasing miles). The benefit can only be used on U.S. airlines, however, and the terms say that the flight must originate within the U.S. to qualify for using your credits. Additionally, the following airlines aren't eligible for this credit: Allegiant Air, Spirit Airlines and Sun Country Airlines. The credit is processed automatically, so you don’t have to call in to apply it to a certain purchase. 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, but it’s still a great benefit for someone who travels a few times a year.
  • Global Entry: Global Entry is a lifesaver. As a frequent international traveler, I can't count how many hours of my life I've saved by not waiting in the regular passport control line. Premium Rewards cardholders get an up-to-$100 credit (every four years) that can be applied toward the application fee for 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's or family member’s application.
  • Travel protections: With the Bank of America Premium Rewards card, you’ll get travel protections including trip delay/cancellation/interruption insurance; baggage delay/loss insurance; emergency evacuation, transportation, travel and emergency assistance services; and secondary rental car insurance. As more and more cards cut these types of protections, having a card that does offer them is increasingly valuable. You don't know when you might need these protections on a trip.
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: For those unfamiliar with this perk, it can save you thousands of dollars. Here are some examples from TPG staffers' real experiences: American Express paid one of our employees $1,400 for a broken watch. Another received $2,600 for a painting that was damaged in transit, thanks to Chase's purchase protection benefit. You’ll get similar protection with the Premium Rewards card, which will repair, replace or reimburse you up to $10,000 for stolen 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). There is a maximum of $50,000 per cardholder under this benefit.

Related: Maximizing benefits with the Amex Platinum Card

So, what are these benefits worth? Purchase protection and travel protections are hard to quantify. They're not worth anything until you're in a situation where you need them. However, there are benefits that we can quantify with real numbers. The $100 available in annual airline incidental credits is worth a full $100, while the Global Entry/TSA PreCheck application fee is worth $25 annually. That's because you can only use the $100 value every four years.

Thus, the annual perks on the Premium Rewards card are easily worth more than the annual fee, which is $95. The bank will basically pay you to keep this card if you are using just these two perks.

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/Getty Images)

With this card, you’re earning 2 points per dollar spent on travel and dining and 1.5 points per dollar 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 1.5 points earned on everyday spending. If you are a member of the Preferred Rewards program, you can earn up to an impressive 2.625 points per dollar on non-bonus spending. That’s higher than any flat-rate card out there.

Related: 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. Cash back can be an important part of your credit card rewards strategy. As airlines continue to devalue frequent flyer programs, the value of cash doesn't change. Additionally, there are times when you might not be able to redeem your points and miles, and it comes in handy to have a card that can cover things like bus tickets, fees on award tickets or paying a tour agency for an upcoming excursion.

To be fair, we value most airline miles at more than 1 cent each. Your Bank of America rewards points will only be worth 1 cent each, so they are most useful in situations where you can't redeem miles — either because of what you are trying to book or because of a lack of award availability.

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.

Redeeming points

Another thing I like about using 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 membership. 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 are a few ways to redeem points:

  • Cash back: When your points balance is 2,500 points or more, you can receive cash back as a statement credit or deposit it into an eligible Bank of America checking or savings, Merrill or 529 college savings account.
  • Travel purchases: You can book flights directly through the Bank of America travel portal. This is a good way to redeem points, because you can still earn award miles and elite credits by flying on a paid ticket (buying directly from the airline may be better, though, because you may get a lower fare class when booking through a portal).
  • Gift cards: A final option allows for converting points into gift cards at popular merchants like Amazon, Whole Foods and Starbucks. I advise against this. It's better to just purchase gift cards with your credit card outright, because you would get purchase protection benefits that way.

Being able to convert points to cash and put it straight into a 529 college savings account is impressive. This can be an excellent way to prepare for expensive tuition costs for yourself or someone in your family.

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 1 cent each, you can use points to pay for travel experiences like your tickets to Disney World. (Photo by Joshua Sudock/Disneyland Resort)

Hearing that points are worth 1 cent each may seem disappointing at first, especially when comparing it to what other points and miles are worth. However, the simplicity of not jumping through hoops or stressing about "maximum redemption value" can be a strong point here. You can use the rewards whenever you want.

Related: Step by step: How to redeem points using the Bank of America 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 Bank of America or Merrill accounts — including retirement or investment accounts — are eligible for increased rewards when spending on the Premium Rewards card. To enroll in Bank of America 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 earnings with the Premium Rewards card. The numbers below are points earned per dollar spent in each category.

Spending categoriesRegular cardholderGold ($20,000-$50,000)Platinum ($50,000-$100,000)Platinum Honors ($100,000-plus)
Travel/dining earnings2 points.2.5 points.3 points.3.5 points.
Other earnings1.5 points.1.875 points.2.25 points. 2.625 points.

At the base level of 2 points per dollar on travel and dining and 1.5 points per dollar 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 spending and no annual fee (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 2.625 points per dollar on everyday spending and 3.5 points per dollar on travel and dining. This requires significant investments with Bank of America or Merrill, obviously. That said, I’ll still probably put most of my travel and dining spending on my Sapphire Reserve because I value Ultimate Rewards points at 2 cents each — meaning I can get a return of 6 cents per point in value on these purchases. However, 3.5 points per dollar on travel and dining and 2.625 points on everything else is quite strong. That's especially true for those who want points they can redeem for anything and everything or those who want cash back.

Putting it all together, if you can use the annual airline incidental credit, this is basically a no-annual-fee card. If you are able to leverage the Bank of America Preferred Rewards program, you now have a "free" card that's earning 3.5 points per dollar on travel and dining as well as 2.625 points per dollar on everything else. Those seeking a cash-back or purchase-eraser card won't find anything else that comes close to these rates.

Moving savings and investments into Bank of America or Merrill accounts can be worthwhile in light of the rewards-earning opportunities this can open up with Bank of America credit cards. Bank of America also allows the option to roll over an existing 401(k) account into a Merrill retirement account, so this could be an easy way to qualify for Preferred Rewards.

Related: Stop ignoring Bank of America Preferred Rewards

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, doctors, executives and others who have a lot of expenses and then experience mileage overload. At some point, you may feel you have too many Amex points and physically can’t redeem all of them for travel (since that is the best way to redeem Membership Rewards points). So if you own your own business, this card can offer 2.625 points per dollar on all of your everyday spending and 3.5 points on all travel and dining. You can easily redeem these points for cold hard cash to offset your expenses.

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. This card doesn't match everyday earning rates from cards like the Citi Double Cash Card or American Express Blue Business Cash™ Card for those who don't participate in Bank of America's Preferred Rewards. The real value of this card is unlocked by Preferred Rewards members.

Bank of America is obviously telling customers that they will be rewarded with its Preferred Rewards program if they move their assets to Bank of America. On top of the earning and redeeming possibilities, the Bank of America Premium Rewards credit card comes with a solid sign-up bonus and some pretty nice perks, which are worth far more than the card’s annual fee. If you're a Preferred Rewards member, this card could easily earn a spot in your wallet year after year. If you aren't, the card can still be "free" by using its perks and then using it to pay for purchases on which you can't use points or miles.

Additional reporting by Madison Blancaflor.

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

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How we chose these cards

Our points-obsessed staff uses a plethora of credit cards on a daily basis. If anyone on our team wouldn’t recommend it to a friend or a family member, we wouldn’t recommend it on The Points Guy either. Our opinions are our own, and have not been reviewed, approved, or endorsed by our advertising partners.
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TPG featured card

Best card for premium perks while traveling
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards

2 - 10X points
10XEarn unlimited 10X miles on hotels and rental cars booked through Capital One Travel
5X5X miles on flights booked through Capital One Travel.
2X2 Miles per dollar on every purchase, every day

Intro offer

75,000 bonus miles
Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel

Annual Fee

$395

Recommended Credit

740-850
Excellent
Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

Why We Chose It

The Capital One Venture X card is one of the best all-round travel credit cards ever launched. Not only is it offering a tremendous welcome bonus, but cardholders can earn tons of miles on everyday spending and receive a 10,000-mile anniversary bonus to boot. Its annual fee is $395, but cardholders can count on up to $300 in statement credits toward travel booked through Capital One Travel each year and other valuable benefits like access to Priority Pass lounges and Capital One’s own growing family of airport lounges.

Pros

  • Excellent welcome offer worth 75,000 miles after you spend $4,000 on purchases in the first three months.
  • Up to $300 in annual travel statement credits toward bookings make through Capital One Travel.
  • 10,000 bonus miles (worth $100 toward travel) each account anniversary.

Cons

  • The $395 annual fee might be expensive for some, but this card’s benefits provide much more value than that.
  • If you don’t travel frequently, this might not be the best card for you.
  • Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel
  • Receive up to $300 back annually as statement credits for bookings through Capital One Travel, where you'll get Capital One's best prices on thousands of options
  • Get 10,000 bonus miles (equal to $100 towards travel) every year, starting on your first anniversary
  • Earn unlimited 10X miles on hotels and rental cars booked through Capital One Travel and 5X miles on flights booked through Capital One Travel
  • Earn unlimited 2X miles on all other purchases
  • Unlimited complimentary access for you and two guests to 1,400+ lounges, including Capital One Lounges and our Partner Lounge Network
  • Receive up to a $100 credit for Global Entry or TSA PreCheck®
  • Use your Venture X miles to easily cover travel expenses, including flights, hotels, rental cars and more—you can even transfer your miles to your choice of 15+ travel loyalty programs
  • Named editors' choice for "Best New Credit Card of 2021" by The Points Guy
  • Earn 10 miles per dollar when you book on Turo, the world's largest car sharing marketplace, through May 16, 2023
Best card for premium perks while traveling
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards Rate

10XEarn unlimited 10X miles on hotels and rental cars booked through Capital One Travel
5X5X miles on flights booked through Capital One Travel.
2X2 Miles per dollar on every purchase, every day
  • Intro Offer
    Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel

    75,000 bonus miles
  • Annual Fee

    $395
  • Recommended Credit
    Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

    740-850
    Excellent

Why We Chose It

The Capital One Venture X card is one of the best all-round travel credit cards ever launched. Not only is it offering a tremendous welcome bonus, but cardholders can earn tons of miles on everyday spending and receive a 10,000-mile anniversary bonus to boot. Its annual fee is $395, but cardholders can count on up to $300 in statement credits toward travel booked through Capital One Travel each year and other valuable benefits like access to Priority Pass lounges and Capital One’s own growing family of airport lounges.

Pros

  • Excellent welcome offer worth 75,000 miles after you spend $4,000 on purchases in the first three months.
  • Up to $300 in annual travel statement credits toward bookings make through Capital One Travel.
  • 10,000 bonus miles (worth $100 toward travel) each account anniversary.

Cons

  • The $395 annual fee might be expensive for some, but this card’s benefits provide much more value than that.
  • If you don’t travel frequently, this might not be the best card for you.
  • Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel
  • Receive up to $300 back annually as statement credits for bookings through Capital One Travel, where you'll get Capital One's best prices on thousands of options
  • Get 10,000 bonus miles (equal to $100 towards travel) every year, starting on your first anniversary
  • Earn unlimited 10X miles on hotels and rental cars booked through Capital One Travel and 5X miles on flights booked through Capital One Travel
  • Earn unlimited 2X miles on all other purchases
  • Unlimited complimentary access for you and two guests to 1,400+ lounges, including Capital One Lounges and our Partner Lounge Network
  • Receive up to a $100 credit for Global Entry or TSA PreCheck®
  • Use your Venture X miles to easily cover travel expenses, including flights, hotels, rental cars and more—you can even transfer your miles to your choice of 15+ travel loyalty programs
  • Named editors' choice for "Best New Credit Card of 2021" by The Points Guy
  • Earn 10 miles per dollar when you book on Turo, the world's largest car sharing marketplace, through May 16, 2023