Is The New Bank of America Premium Rewards Card Worth It?

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It’s now possible to apply for the Bank of America Premium Rewards Credit Card. While the card has “premium” in the name, it’s not actually intended to compete with $450-550 annual fee cards like The Platinum Card® from American Express, but rather is intended to compete with mid-range cards with $95 annual fees, like the Chase Sapphire Preferred® Card.

Let’s look at the details of the card, and whether or not it’s worth applying for?

Bank of America Premium Rewards Card sign-up bonus

The card offers a sign-up bonus of 50,000 bonus points after spending $3,000 within three months. Points can be redeemed for a penny each as a statement credit, so the 50,000 points are worth $500.

Bank of America Premium Rewards Card annual fee

The card has a $95 annual fee, which isn’t waived the first year.

Bank of America Premium Rewards Card perks

The card offers two main perks to help offset the annual fee:

  • You get a $100 airline incidental statement credit annually for qualifying airline purchases, which is automatically applied to your statement; if you are able to use that every year and value it at close to face value, that basically wipes out the annual fee on the card
  • You get a $100 TSA Pre-Check or Global entry application fee credit every four years

Typically this is a benefit you only see with higher annual fee cards, so that’s a nice benefit on a mid-range card like this.

The other perk is that the card has no foreign transaction fees, though that’s not exactly special anymore.

Bank of America Premium Rewards Card ability to redeem points

As I said above, points are worth a penny each, so while you can choose whether you want them as a statement credit or in your Merrill Lynch account, it doesn’t change the amount you get back. There are no transfer partners or any other ways to redeem these points.

Bank of America Premium Rewards Card bonus categories

This is where the card falls flat. The card offers:

  • 2x points for every dollar spent on dining and travel
  • 1.5x points for all other spend

That’s not terribly lucrative, since you’re earning at best 2% cash back. With a return like that, you’re much better off with the Citi® Double Cash Card, which offers unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases. The card has no annual fee, and you’re earning the best return offered by the Bank of America Card on all your spend.

The one thing that potentially makes the Bank of America Premium Rewards Card worthwhile

Up until now, just about everything about this card makes me ask “why bother?” Well, there’s one thing that could potentially make this card very worthwhile. If you’re part of Bank of America’s Preferred Rewards program, you’re eligible to earn additional points based on how much you have deposited with them:

  • If you have $20,000-49,999 in assets, you earn 2.5x points on dining and travel, and 1.875x points on everything else
  • If you have $50,000-99,999 in assets, you earn 3x points on dining and travel, and 2.25x points on everything else
  • If you have $100,000+ in assets, you earn 3.5x points on dining and travel, and 2.625x points on everything else

This card potentially starts to make a lot of sense if you’re in that top category. This is the equivalent of earning 3.5% cash back on dining and travel, and 2.625% cash back on all other purchases. That’s arguably the best return on non-bonused spend offered by any credit card, with the exception of The Blue Business℠ Plus Credit Card from American Express, which offers 2x Membership Rewards points on the first $50,000 spent annually. Of course you need to have $100,000+ with them, which is a pretty important detail.

Bottom line

The new Bank of America Premium Rewards Credit Card isn’t bad, but for the average person I don’t see a reason to switch to it. If it’s cash back you’re after, the Citi® Double Cash Card is more compelling. If it’s points you’re after but you don’t want to pay more than $100 worth of annual fees, I think the combination of the Chase Sapphire Preferred® Card and Chase Freedom Unlimited®, or just The Amex EveryDay® Preferred Credit Card from American Express, are significantly more compelling.

The one exception is if you’re eligible for the highest tier of the Preferred Rewards program, in which case this card could offer up to 3.5% cash back on travel and dining purchases, and 2.625% cash back on everything else. That’s potentially very interesting.

What do you make of Bank of America’s new Premium Rewards Card?

(Tip of the hat to View from the Wing)

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Comments

  1. One thing to note is that the asset threshold includes securities in a linked Merrill EDGE account. For example, you can hold an IRA or just a portfolio of mutual funds/ETFs/stocks, etc. to meet the $100k threshold. Not a horrible place to hold securities either, since you get 30-100 free trades a month depending on your account size.

    I happen to be a BofA/Merrill customer that meets the threshold anyways, so I’ll be signing up.

  2. not sure if I just convert my existing BOA travel rewards card to this one or apply new and cancel my old travel rewards.

    I will likely just convert if they let me. I am waiting on details of what counts for the $100 travel credit. I could use another global entry for the 3 year old as well .

    Of note bank of America’s travel catagory is the broadest I have seen. Amusement parks, wine, museums all seem to count as travel

  3. A decade or so ago, I had a BofA checking account. They made a $100 error (in their favor) that I didn’t catch until a few days after expiration of the 60 day limit for notifying them of an error. They refused to correct it. I canceled my account and I will not have anything to do with them again.

  4. @ James K. — From a sign-up bonus standpoint I agree, though keep in mind that the Barclaycard Arrival Plus has the annual fee waived the first year. My bigger issue is that the Barclaycard Arrival Plus actually offers a well rounded return on non-bonused spend and has Chip & PIN technology, while this card isn’t as rewarding for everyday spend. In other words, I could see the Barclaycard Arrival Plus actually being useful for spend, especially when traveling internationally, while I think there are other cards where you can do much better than the BofA card.

  5. @Lucky

    Those are fair points, but those seem very incremental, right? I don’t think most of us put much value in chip and pin (nice to have, but as long as you have a chip you’re good everywhere pretty much outside of train stations), the annual fee being waived is essentially moot if the travel credit works out as intended, and while it gets you a lower return on spend, 1.5x isn’t terrible. Also, BofA is typically a much easier approval than Barclay.

    Long story short, I think both cards are worth about $500-550 once you complete minimum spend, and neither is terribly compelling past that point. But for some reason the Arrival card is treated much more seriously.

  6. Just as an FYI, you can redeem for more than just a statement credit or into a Merrill Lynch account as the article states. You can also redeem for gift cards and travel!

  7. I’m Chase Private Client, which I joined to get the CSR. I’m over 5/24 but not hugely over. But I hear that CPC doesn’t exempt me from 5/24 anymore. So maybe I should switch to this card?

    The only problem is I couldn’t transfer my freedom UR for the extra value…

  8. Is there a chance the $100 incidentals for airlines could be redeemed for small denomination airline gift cards? If I can get 4 $25 gift cards, then this card is absolutely worth it.

  9. If one is has the maximum Preferred Rewards status with the 1.75 multiplier, and 100% of $10,000 annual spend is spent on travel/dining, the net return after the $95 annual fee is 2.55%.

    With the same conditions as above with 50% of $10,000 annual spend on travel/dining, the net return is 2.11% which makes the Citibank Double Cash 2.0 % return with no annual fee very attractive since the $100,000 account for Preferred Rewards status is not required.

    With maximum Preferred Rewards status, $20,000 annual spend, and 50% spend on travel/dining, the net return after the $95 annual fee is 2.59% with the BofA premium card.

    Now, with the BofA Travel Rewards credit card with no annual fee and $100,000K deposited in a Merrill ETF account, one earns 1.75*1.5% = 2.625% with no annual fee impact on all spend. This would seem like a nice way to augment the Chase Sapphire Reserve travel/dining spend with a backup card having no annual fee.

    Just a thought.

  10. They are denying for “too many cards opened recently”.

    Seems like the days of churning and burning are coming to an end….

  11. After reading all these comments, my view is that the signup bonus is great but the ongoing rewards program is mediocre, especially for those of us who have no other relationship with Bank of America. Has Bank of America unwittingly designed a card that encourages churning?

  12. Can your spouse use the TSA Precheck credit as long as it was paid for with this card? I have it already and would like for him to be able to get it. I don’t have this card yet, but I am considering it. Thanks!

  13. The real benefit of this card is to put 100k in a Merrill Lynch acct. The 50000 bonus points pays more than 5 yrs annual fee dues. The free trading, the money earned in investm/ stocks/ira is the same as if you invested in etrade or somewhere else. Bonus money for just initially opening a Merrill Edge account. Its just like getting 3.5% back on any dining travel bills. There is no reason for CDS or money market savings or any interest bearing acct, this is just free money for spending as usual and not even tieing up your money. ( If you are stock investor inclined anyway).
    There are more benefits for preferred rewards also, auto loans helocs etc. This is the wave of the future.

  14. I’d like the card if the travel credit will work with allegient and SWA (occasionally also fly delta, spirit). But while terms and conditions lists that only certain domestic airlines count, BOA can’t tell me if allegient and SWA are included. The separate transaction is also a tough sell given you’d have to book your initial flight plus extras then go back in for an extra bag (at double cost on allegient) or only use for something like food.

    Anyone try any these of airlines yet to know who’s excluded?

  15. I have checking and savings accounts with B of A. I don’t have Preferred Member Merrill Lynch 25k, 50k or 75k. (I wish

    I have BankAmericard Cash Rewards and the Bof A Travel credit card. I went into my local B of A for another reason but while there I looked for brochures for the premium card.

    I asked the banker about the premium card.

    “Have you been invited to apply for the card?”

    “No.”

    “You need to be invited to apply for the card.”

    I asked how one gets invited and was told one needed to be a Preferred Member at the 50K level, “And even some of them don’t qualify.”

    Good to know. No need to waste a hard pull.

    Later, I checked “My Offers” from B of A and I see the two cards I already have and the Premium card.

    So, utterly confused I call B of A and ask if “My offers” and being invited to apply for the premium card are the same thing and what about the 50K?

    The phone banker has to research the answer (fair enough new card) but comes back with there is no requirement for 50k Preferred Status and no invitation needed.

    That’s what I gleaned from promotional materials about the Premium card. I’m not sure who to believe. The onsite banker seemed to be more knowledgeable. (I asked about B of A 2/3/4 rule* and he knew what it was.

    On the other hand, if B of A is offering the premium card ONLY to *some* Preferred 50K members, shouldn’t B of A make this known to applicants? What possible benefit does an B of A get in processing ineligible applications?

    And why not be upfront with criteria?

    Nobody likes wasted HPs

    * No more than 2 Bof A credit cards can be approved in a month. No more than 3 B of A credit cards can be approved in 12 months. No more than 4 B of A credit card’s can be approved in 24 months.

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