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30Sep 2018

5 Reasons You Should Get The Bank of America Premium Rewards Card – Forbes


Forbes has partnered with The Points Guy for our coverage of credit card products. Forbes and The Points Guy may receive a commission from card issuers.

Premium Rewards offers flexible spending and lucrative earning rates.The Points Guy

I usually recommend cash-back credit cards because of the simplicity they offer. For people who aren’t ready to learn the ins and outs of redeeming points, this can be a great way to still get value out of your credit card spending. But the Bank of America Premium Rewards card is a little different. With a small amount of work and planning, this might end up being the most valuable cash-back card in your wallet. Here are 5 reasons why I love this card:

Transferable points (such as Chase Ultimate Rewards and Amex Membership Rewards) are the key to unlocking fancy first class flights, but they can’t cover everything. For excursions, tours, taxes on award tickets, and those nasty “resort fees,”, cash is essential to keep your vacation running smoothly. You can even use the points from BoA’s Premium Rewards card to erase the cost of hotels and airfare if you find a low cash rate and decide to save your transferable points for a rainy day.

Now you don’t have to use these rewards for travel. You can redeem them as a statement credit for any type of purchase, or even cash them out directly to a linked Merrill Lynch investment account or 529 college savings plan.

Many credit card issuers offer some sort of travel credit as a way to offset premium annual fees and convince customers to pay $450 or more a year. These credits, if used fully, usually knock the out of pocket cost of a premium credit card down to a manageable range, such as $100-200 a year.

The Bank of America Premium Rewards card comes with a $95 annual fee, and a $100 annual airline incidental fee credit. That’s right, you’ll come out $5 ahead every year you keep this card open. And since the credit is issued by calendar year instead of cardmember year, you’ll likely get $200 in credits during your first 12 months with the card. While this credit doesn’t apply to airfare, you can use it for a range of incidental charges including seat assignments, baggage fees, lounge access and more.

You’ll also have access to a Global Entry/TSA PreCheck application fee credit. These credits are becoming so common, even on entry-level credit cards, that there’s a good chance you already have one. Just remember that the credit will work even if you “gift” it to someone else. You can pay for a friend or family members application fee and be reimbursed just the same.

Of course, one of the most important considerations when looking for a new credit card is maximizing the sign-up bonus you earn. The Premium Rewards card is offering 50,000 points to new members who spend $3,000 in the first 90 days after account opening. When you add in the $3,000 you’ll spend to get the bonus, at a minimum earning rate of 1.5% back, you’ll end up with $545 in rewards. That’s among the highest cash back bonuses I’ve ever seen from a personal credit card, and when you factor in the fact that it’s basically free (thanks to the $100 travel credit) this becomes a very solid value proposition.

In addition to 2x points per dollar on travel and dining purchases, the BoA Premium Rewards card earns 1.5x on all other non-bonus spending. This is a great start, but you can potentially do much, MUCH better.

If you’re eligible to join the Bank of America Preferred Rewards program, your earning rates will go up to the following amounts depending on your account tier:

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
Other Earnings 1.5x points 1.875x points 2.25x points 2.62x points

In order to join you’ll need an eligible Bank of America personal checking account and a 3-month average combined balance of $20,000 or more across your Bank of America, Merrill Edge and Merrill Lynch accounts.

If you already bank with BoA I’d say this card is a no-brainer. If not, it might be worth establishing a banking relationship with them (like I did earlier this year to turbocharge your earning rates.

Diversity is one of the most important and most underrated parts of a rewards strategy. It means different types of credit cards (personal vs. business, premium vs. entry level, cash back vs. points), issued by different banks, with different redemption options. This way, if you get hit with a black swan event like Chase shutting down all your accounts or Visa’s IT systems going offline for an entire day, you’ll be in the clear.

Bank of America has been historically overshadowed by the “big 3” (Chase, Amex and Citi), but now is the perfect time to consider adding a new bank to your wallet. With Chase’s 5/24 rule and Amex’s once per lifetime bonus restriction, many people are going to need to start considering other banks to help fund their future reward travel. Bank of America has made a compelling case for your business with the Premium Rewards card, and earned a permanent spot in my wallet.

The Bank of America Premium Rewards card isn’t trying to wow you with flashy perks like elite status or lounge access. Instead, it does the little things very well. It offers solid cash back earning rates to everyone, but really competitive rates to its loyal banking customers. It offers a reasonably sized travel credit that more than gets the job done and entirely wipes out the modest $95 annual fee. If you’re looking to build your rewards strategy outside of hotel and airline points and outside the big 3 banks, this card might be perfect for you.

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