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The Points Guy believes that credit cards can transform lives, helping you leverage everyday spending for cash back or travel experiences that might otherwise be out of reach. That's why we publish a variety of editorial content and card comparisons: to help you find a great card to turn your goals into reality.
Our site may earn compensation when a customer clicks on a link, when an application is approved, or when an account is opened with our partners, and this may impact how or where these products appear. While we don't cover all available credit cards, our editorial team creates and maintains all of the analysis of these cards, and our content is not influenced nor subject to review by any credit card company, bank or partner prior to (or after) publication. Please view our advertising policy and product review methodology for more information.
News
Bank of America Launches New Preferred Rewards Program
Since launching TPG in 2010, founder Brian Kelly has expanded the team to include a distinguished editorial staff and an extensive network of freelancer contacts from around the globe. Today, TPG reaches 11 million unique monthly visitors and more than 3 million followers across social media platforms and has offices in New York City, Charlotte and the U.K.
October 8, 2014 • 7 min read
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Quick summary
A major bank has introduced a new rewards program that boosts points-earning potential for select customers with high account balances.
The program features three membership tiers, each offering increasing benefits such as enhanced rewards, waived banking fees and mortgage credits.
Eligibility requires a personal checking account and a minimum combined balance across eligible accounts, with higher tiers demanding larger balances.
While the boosted rewards can be competitive, the most significant benefits are reserved for those who maintain substantial funds with the bank.
What to consider
Enrollment requires maintaining a three-month average combined balance of at least $20,000 across eligible accounts, with higher tiers needing $50,000 or $100,000.
The rewards boost applies at the time of redemption, not when earning points, and is tier-dependent.
Some offers mentioned in the article are no longer available.
What you'll miss from the article
A detailed comparison of how these new rewards stack up against other leading cash-back and travel rewards products, including specific scenarios for maximizing value.
Generated by AI with support from our editorial team.
Update: Some offers mentioned below are no longer available. View the current offers here.
The travel rewards credit card market is always evolving, with new opportunities popping up just as fast as others disappear. While this year will spell the end of some cards and benefits, we've also seen new ones arise, like primary rental insurance on the Chase Sapphire Preferred, and the launch of the new Citi Double Cash card. This week it's Bank of America's turn to make waves; read on to find out just how big those waves are, and whether you should get your swimsuit.
Bank of America is shaking things up...sort of.
Apart from a few co-branded airline cards, Bank of America has mostly focused on cash back cards (like the Bank of America Cash Rewards credit card) and travel rewards cards that earn a fixed rate of return (like the Bank of America® Travel Rewards credit card). Both of these cards provide fairly simple earning and redeeming formulas; you earn a certain number of points per dollar depending on the card and bonus categories, and you can redeem those points at one cent apiece for cash back or travel purchases. It's straightforward, but not terribly exciting.
However, Bank of America is now spicing things up a bit by introducing a new points program called Preferred Rewards that targets high-value banking customers, and can boost your points-earning potential by up to 75%.While this is not the new transferable points program that Nick Ewen wrote about in The Weekly Wish last month, and these cards come with some fairly rigorous minimum balance requirements, Preferred Rewards is a step in the right direction, and one that makes BofA’s cash back cards more competitive with the other top cash-back cards out there.
Enrollment Requirements
To enroll in Preferred Rewards, you need to fulfill the following requirements:
Have an eligible Bank of America personal checking account
Maintain a 3-month average combined balances of $20,000 or more in qualifying Bank of America banking accounts and/or Merrill Edge and Merrill Lynch investment accounts.
Those are just the basic requirements, and there's no fee to enroll or participate. However, there are tiers based on your qualifying combined balances.
The Bank of America Preferred Rewards program has three tiers based on your banking relationship.
Membership Tiers
Preferred Rewards membership has three tiers: Gold, Platinum, and Platinum Honors. All three membership tiers offer up to 4 eligible checking and savings accounts with no monthly maintenance fees, plus no fees on select banking services (such as standard check orders, cashier's checks, and stop payments), as well as priority customer service with extended hours. Here's what other benefits you'll get at each level of membership, and the requirements to qualify.
Gold: checking account and at least $20,000 in combined balances
5% Money Market Savings account interest rate booster – this does not mean you’ll earn a 5% return, it just means that you will get a 5% boost based on the current rate of your account (so if your return is currently 1%, your boosted rate would be 1.05%).
25% rewards credit card bonus.
$200 relationship credit at closing of a mortgage.
Platinum: checking account and at least $50,000 in combined balances
$600 relationship credit at closing of a mortgage.
Unlimited no-fee withdrawals at non-BofA ATM’s in the US.
Up to 100 $0 trades per month with individual or joint Merrill Edge self-directed brokerage accounts.
How much more are you really getting?
New Earning Rates
There are a lot of variables here depending upon your tier and the specific card you carry, but generally, Bank of America® Travel Rewards Visa® cardmembers who now earn 1.5 points per dollar on purchases would earn between 1.875-2.625 points per dollar. This isn't earth-shattering, but a consistent 2.625% return for Platinum Honors members is very solid, and usually beats the return offered by other comparable back cards.
Bank of America Cash Rewards Credit Card members who now earn 1 point per dollar on everyday purchases would earn between 1.25-1.75% return on their spending. Just note: cardholders will not see their points-earning increase with this card. Rather, they get the percentage bonus based on their Preferred level at the time of redemption.
This card earns 1% cash back on every purchase, 2% at grocery stores and now at wholesale clubs, and 3% on gas up to the first $2,500 in combined gas/grocery store/wholesale club purchases each quarter. So if you maxed out the 3% gas bonus, you could be earning 3.75%-5.25% back on up to $6,000 in gas purchases annually when you go to redeem your points.
Context
It was about time that Bank of America spruced up its somewhat lackluster rewards program to try and compete with other cash back products like Chase Freedom(No longer open to new applicants) and Discover it Cash Back, and fixed-rate travel cards like the Capital One Venture Rewards Credit Card and Barclaycard Arrival Plus World Elite Mastercard, but I think BofA could have gone further.
For the sake of context (and argument), let’s say you qualify for either the basic Gold tier or the top Platinum Honors tier.
If you have the Bank of America Cash Rewards credit card, as a gold member you'll earn 1.25 points per dollar on everyday purchases and up to 3.75% back on gas purchases (of up to $6,000 per year). As a Platinum Honors member you'll earn 1.75 points per dollar on everyday purchases, and up to 5.25% back on gas purchases (again, of up to $6,000 per year).
If you have the Bank of America® Travel Rewards credit card, you'll earn between 1.875-2.625 points per dollar. Done and done.
On the other hand, if you have the Chase Freedom card – which has no bank or investment account requirements – you earn 1 point per dollar on everyday purchases and up to 5% back on rotating categories of merchants up to $6,000 of purchases per year.
What this boils down to is that the new cash back earnings boost from Bank of America is not significant unless you're a high-tier customer and you're putting a huge amount of spending on your card for the cash back.
So if you're just looking for a simple, solid, high-performing cash back card, the Chase Freedom would still be my top pick. It has no banking requirements, earns a solid 1% return on everyday spending and 5% on quarterly rotating categories. Plus, it still handily beats the earning and redemption rates for the Bank of America® Travel Rewards Visa® Credit Card if you can max out the 5% rotating categories.
Bottom Line
While it’s interesting to see Bank of America offering some enhanced benefits, the hefty account requirements exclude many of their customers. That said, if you're a BofA customer and you meet the minimum requirements, you should absolutely sign up. Apart from the enhanced credit card benefits, if you do a lot of banking through BofA, all those other benefits could result in significant savings. The free banking services, the ATM withdrawal fee waivers, the mortgage closing credits and the investment account transaction fee waivers, and the savings account rate booster could all equate to hundreds of dollars in savings per year.
With additional reporting by Eric Rosen.
Comments
By commenting, you agree to our Community Guidelines to help create a positive space for conversation. The responses below are not provided or commissioned by the bank advertiser, our partners, or The Points Guy (“TPG”). They have not been reviewed, approved, or otherwise endorsed by any of these parties. All responses are submitted by individual contributors, and neither the bank advertiser, our partners, nor TPG are responsible for ensuring that all posts and/or questions are answered.
