Why I finally applied for a new credit card — and what made the card worth the effort
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It’s been a long time since I applied for a new credit card. I’d guess it’s been about a year, which may be a record for me. That’s partly because I’ve just been busy (like everyone else), partly because of a dose of laziness and complacency. I had a well-stocked wallet of rewards credit cards, and with the realities of Chase 5/24 and more, you have to be extremely choosy when getting new cards if you’ve been at this hobby for a while like I have.
But, over the past week, I stopped procrastinating and added a card to my wallet that I really should have had for a while now.
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This particular card gives me more rewards per dollar charged on everyday expenses than any of my other credit cards and won’t box me into solely travel redemptions if my future redemption needs don’t fit neatly into that one box. And if you value an annual $100 airline credit as cash, then the card actually pays you $5 each year to keep the card. Even if you don’t value the airline credit at full value, this is a card with an under $100 annual fee.
The new (to me) credit card I was just approved for is the Bank of America® Premium Rewards® credit card.
Of course, I’m excited about the welcome bonus of 50,000 points (worth 1 cent each toward basically anything, even a 529 deposit) earned after spending $3,000 on the card in the first 90 days of account opening. That will be $500 in rewards we can use on Texas road trips this summer, at Disney World when it ultimately reopens, on cabin or home rentals, or something totally different if we decide to redeem the points on clothes, groceries, entertainment or whatever. But, the welcome bonus by itself isn’t what propelled me to hit apply.
Related reading: How to redeem Bank of America Premium Rewards points
I wanted the card primarily because it is so solid on earnings on everyday spending … especially if you bank with Bank of America and trigger the higher-earning thresholds because of the money you have on deposit in your Bank of America accounts or Merrill investment accounts (based on a three-month average).
Without those bonuses, the card earns 2x points on travel and dining charges, 1.5x elsewhere. Those are OK rates, but they aren’t earth-shattering. However, that earning rate goes as high as 3.5x on travel and dining and — more importantly to me — 2.625x points per dollar on everyday charges if you qualify for the highest Platinum Honors tier in Bank of America’s Preferred Rewards Program by having $100,000 or more on deposit.
Related reading: Everything to know about Bank of America’s Preferred Rewards program
|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|
|Everyday earnings||1.5x points||1.875x points||2.25x points||2.625x points|
Now, I 100% get that not everyone has $100,000 on deposit or in eligible investments sitting at Bank of America. But that’s OK. That made the card good for my situation at the moment, but it’s not the point of the article.
Related reading: Best Bank of America credit cards for 2020
The point is, the world has changed a bit. Hopefully, it gets back to a form of (new) normal we are all comfortable with, but some spending and travel patterns likely won’t be exactly what they were before, at least not for a while. So, I decided I wanted a card that made earning points on everyday spending easy and redeeming them on whatever we needed just as easy. If you don’t qualify for a higher tier at Bank of America, there are other cards with solid everyday spending earnings, too.
For example, the Citi® Double Cash Card gives you 2% cash back (1% cash back when you spend, and another 1% when you pay your bill) — all with no annual fee or deposit minimums.
The no annual fee Chase Freedom Unlimited is also pretty great for everyday spending at 1.5% cash back on purchases (1.5x points per dollar) charged. If you also have a Chase Sapphire Reserve®, then you can redeem the points earned by the Freedom at 1.5 cents per point, which gets you to 2.25 cents in award earning per dollar charged when combined with the 1.5x earning rate.
At least through Sept. 30, the Sapphire Reserve has added categories you can redeem at 1.5 cents per point in the form of grocery stores, home improvement stores and dining establishments, including takeout and delivery services. Typically, only travel redemptions can be redeemed at that higher rate, but right now there is more flexibility for some Chase cards.
For me, right now, it’s all about flexibility and simplicity in the credit card and rewards realm. If that’s true for you, too, then find that credit card that not only gives you a jolt of bonus points upfront but is strong in the categories where you’re spending the most, while ensuring that using your points down the road is also as simple and flexible as possible.
Related reading: How to use Chase Pay Yourself Back feature
Maybe that perfect card is already in your wallet or sock drawer, or maybe it’s lurking out there still waiting for you to decide the time is right to change up your card lineup a bit to maximize life as it stands right now, not life as it was.
Featured image courtesy of Lisa Weatherbee
Welcome to The Points Guy!
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.
- Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 when you redeem through Chase Ultimate Rewards®. Plus earn up to $50 in statement credits towards grocery store purchases.
- 2X points on dining at restaurants including eligible delivery services, takeout and dining out and travel & 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.
- With Pay Yourself Back℠, your points are worth 25% more during the current offer when you redeem them for statement credits against existing purchases in select, rotating categories.
- Get unlimited deliveries with a $0 delivery fee and reduced service fees on eligible orders over $12 for a minimum of one year 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.