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Update: Some offers mentioned below are no longer available. View the current offers here – Bank of America Cash Rewards credit card

Despite its ever-growing credit card portfolio, Bank of America has stayed away from transferable points currencies and instead focused on building a rewarding cash-back program. Now, the issuer is making a change to one of its fixed-value cards.

Beginning Jan. 14, customers will be able to apply for the new Bank of America Cash Rewards credit card. This no annual fee card will allow customers to pick which of the following categories to earn 3% cash back on each month:

  • Gas
  • Online shopping
  • Dining
  • Travel
  • Drugstores
  • Home improvement and furnishing

Card holders will also earn 2% cash back at grocery stores and wholesale clubs. They’ll earn 3% and 2% on the first combined $2,500 spent in combined choice category/grocery store/wholesale club purchases each quarter, and an unlimited 1% back on all other purchases.

The $2,500-a-quarter limit really caps the potential value of this card, but you might be able to earn even more than 3% back by enrolling in the Bank of America Preferred Rewards program. To enroll, you must have an eligible BoA personal checking account and a three-month average balance of at least $20,000 in qualifying BoA and Merrill Edge/Merrill Lynch accounts. Based on your total balances, you’ll earn a 25-75% bonus bumping your earning rates up as high as 5.25%

Spend Categories Regular card holder Tier 1 – Gold ($20,000 – $50,000) Tier 2 – Platinum ($50,000 – $100,000) Tier 3 – Platinum Honors ($100,000+)
3% choice category 3% 3.75% 4.5% 5.25%
2% grocery stores and wholesale clubs 2% 2.5% 3% 3.5%

 

These features will be rolled out to all existing Cash Rewards cards starting in mid-January. In addition to the new bonus categories, BoA is adding new redemption options, including the ability to redeem for credit directly into an eligible 529 account or into an eligible BoA account with no redemption minimums.

Additionally, BoA says similar changes will be coming to the Bank of America Business Advantage Cash Rewards Mastercard credit card later in 2019. Card holders will be able to choose to earn 3% back on one of the following categories:

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

BoA currently has a number of Cash Rewards cards that use this capped 3%/2% cash back structure, such as the MLB credit card and Susan G. Komen credit card. While we don’t know what if any sign-up bonus this card will launch with in January, the current offer on the various Cash Rewards cards is a $200 bonus after spending $500 in the first 90 days.

Bottom Line

If you’d been eyeing a cash-back card, the ability to select your 3% bonus category is certainly a nice development. That being said, BoA caps the bonus categories at such a low amount that it really limits the . potential value. Even if you were a Platinum member of the Preferred Rewards program with $100,000+ parked with BoA, the maximum amount of cash back you could earn with this card would be $525 a year. If you’re not eligible for Preferred Rewards, that number drops to $300 a year. If you’re a current BoA customer and a medium to large spender, you’d be much better off opting for the Bank of America Premium Rewards credit card, which doesn’t cap its bonus categories.

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.

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