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Most credit cards offer a fixed line-up of rewards-earning rates. There may be some built-in bonus categories, but the bonus categories are typically set by the bank, not the consumer. This can lead to a family needing multiple credit cards to maximize ever-changing spending patterns.

Choose Your Own 3% Bonus Category

However, Bank of America recently announced a change to the earning structure of the cards at the heart of its rewards portfolio. As of today, the new Bank of America Cash Rewards credit card offers not only a $150 bonus after spending $500 in the first 90 days of account opening, but card holders can also select which of six family-friendly categories they’d like to earn 3% cash back on each month:

  • Gas
  • Online shopping
  • Dining
  • Travel
  • Drugstores
  • Home improvement and furnishing
Earn 3% back shopping online (Getty Images / Roberto Westbrook)
Earn 3% back shopping online (Getty Images / Roberto Westbrook)

Changing Your 3% Bonus Category

The initial 3% back setting on the Cash Rewards card is for gas (which was the 3% cash-back category on the previous version of this card), but card holders can now change their 3% bonus category as frequently as each calendar month if they desire. This means if you set your initial 3% category to drugstores on Jan. 21, knowing you had lots of prescriptions to fill, you could then change it to online shopping as early as Feb. 1 to hop on some online winter clearance sales. On March 1, you could switch your 3% category to travel for upcoming spring break travel expenses. If you don’t change it each month, you continue to earn 3% back on the previous month’s selection.

The 3% bonus category of your choice is in addition to the consistent 2% back at grocery stores and wholesale clubs. Do note that the 3% and 2% bonus categories are limited to your first $2,500 in combined purchases each quarter. At 3% back, this could result in $75 back on $2,500 in spending each quarter. The BoA Cash Rewards card has no annual fee and also earns an unlimited 1% back on all other purchases.

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Earn up to 5.25% Back With the BoA Preferred Rewards Program

The $75 cap on bonus cash back each quarter (3% of $2,500) is a limiting factor for some who may do better with the Bank of America Premium Rewards credit card without bonus caps, but you can increase your earnings on the no annual fee Bank of America Cash Rewards credit card by enrolling in Bank of America’s Preferred Rewards program. You can enroll in this program if you have an eligible Bank of America (BoA) personal checking account and a three-month average balance of at least $20,000 in qualifying BoA and Merrill Edge/Merrill Lynch accounts. Members of the Preferred Rewards program enjoy a boost on their bonus earnings based on their eligible account balances:

Spend Categories Regular cardholder Gold ($20,000 – $50,000) Platinum ($50,000 – $100,000) Platinum Honors ($100,000+)
3% choice category 3% 3.75% (25% bonus) 4.5% (50% bonus) 5.25% (75% bonus)
2% grocery stores and wholesale clubs 2% 2.5% (25% bonus) 3% (50% bonus) 3.5% (75% bonus)

Platinum Honors customers with $100,000+ deposited in eligible BoA accounts would see the Cash Rewards card bonus earnings top out at about $130 a quarter with the 75% bonus. Everyday 1% earnings would shoot up to 1.75% at the Platinum Honors level with the 75% bonus. Of course, not everyone has $100k sitting in a BoA account, but even at the Gold level, getting 3.75% back in the monthly 3% category of your choice (with 25% bonus) is pretty solid.

Earn 3% rewards in one of six categories and use them however you wish - like at the beach! (Photo by Shelby Soblick for The Points Guy)
Earn 3% rewards in one of six categories and use them however you wish — like at the beach! (Photo by Shelby Soblick for The Points Guy)

Flexible Redemption Options

In addition to the new bonus categories, the Cash Rewards card has streamlined redemption options. This includes the ability to deposit your rewards directly into an eligible 529 account or receive a statement credit, check or deposit into a Bank of America account with no redemption minimums.

Bank of America has also told us to expect similar changes on the Bank of America® Business Advantage Cash Rewards Mastercard credit card later in the year, with businesses getting to select their 3% earning category from the following list:

  • Business consulting services
  • Computer services
  • Gas stations
  • Office supply stores
  • Travel
  • TV, telecom and wireless

Bottom Line

If you recently began or elevated your banking relationship with Bank of America to maximize your earnings on the Bank of America Premium Rewards card, the updated Bank of America Cash Rewards credit card might be a very good addition to your cash back strategy. With cash back, you aren’t tied to airline award seat availability, blackout dates, using specific booking sites, etc. You can use your rewards however and whenever you wish.

Freedom to use rewards however you wish (Photo by Shelby Soblick for The Points Guy)
Freedom to use rewards however you wish. (Photo by Shelby Soblick for The Points Guy)

While there are caps on bonus earnings, the ability to select your own bonus category is an exciting improvement for families who don’t necessarily want to manage multiple credit cards. Now one credit card can adjust each month to match your family’s spending patterns. Not only that, but online shopping and home improvement stores are two family-friendly bonus categories that aren’t frequently replicated by other rewards credit cards.

If you’re able to qualify for the BoA Preferred Rewards Program, earning 3.75 to 5.25% cash back in an otherwise overlooked category can be especially useful, even with the quarterly caps. Even without the Preferred Rewards program, the new BoA Cash Rewards Card is one to consider for your wallet.

Bank of America® Cash Rewards credit card

Families love vacations and cash back on purchases, but not all families spend their money in the same categories every month. Each month, The Bank of America® Cash Rewards credit card allows families to earn 3% cash back in the category of their choosing: Gas, Online Shopping, Dining, Travel, Drug Stores or Home Improvement/Furnishings. Now you don’t need multiple cards in your wallet to maximize rewards on your ever-changing expenses.

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More Things to Know
  • No annual fee
  • $150 online cash rewards bonus after you spend at least $500 on purchases in the first 90 days of account opening
  • New Offer: Maximize your cash back in the category of your choice: gas, online shopping, dining, travel, drug stores, or home improvement /furnishings
  • Now earn 3% cash back in your choice category and 2% at grocery stores and wholesale clubs (up to $2,500 in combined choice category/grocery store/wholesale club quarterly purchases), and unlimited 1% on all other purchases
  • You can update your choice category for future purchases once each calendar month using the Mobile banking app or Online banking, or do nothing and it stays the same.
  • No expiration on rewards
  • 0% Introductory APR for 12 billing cycles for purchases and for any balance transfers made in the first 60 days. After the intro APR offer ends, 16.24% - 26.24% Variable APR will apply. A 3% fee (min $10) applies to all balance transfers
  • If you're a Preferred Rewards client, you can get a 25% - 75% rewards bonus on every purchase
Intro APR on Purchases
0% Introductory APR on purchases for 12 billing cycles
Regular APR
16.24% - 26.24% Variable APR on purchases and balance transfers
Annual Fee
$0
Balance Transfer Fee
Either $10 or 3% of the amount of each transaction, whichever is greater.
Recommended Credit
Excellent/Good

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