Bank of America Cash Rewards
No annual fee
15,000 points
$500 initial spend
($140 net value, .29/$)
Signup Bonus Chart3-5.25% on 1 category of your choice
2-3.5% Groceries and Wholesale Clubs
1-1.75% Everything Else
3%% Foreign Transaction Fee
For anyone who can move $100,000 in investment or retirement assets to Merrill Lynch, this card earns a 5.25% reward rate on your choice of bonus categories (Gas, Online Shopping, Dining, Travel, Drug Stores, and Home Improvement + Furnishings). Online shopping can be particular valuable. You can even change your category every month.
If you can't qualify for the higher reward rates, the reward rate is 3% and the card is much less interesting.
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Bank of America Cash Reward Card Options
Bank of America offers a number of other credit cards that are essentially identical to the Cash Rewards card: the Susan Komen, World Wildlife, and U.S. Pride cards, and a card for every baseball team. Each variation has the same reward rates, signup bonus, and benefits. There is a also a student version of the Cash Rewards card. Bank of America Card Listing.
Bank of America also has a Business Bank Rewards card, but it offers bonus rewards on completely different categories, and requires separate assets held in business accounts to qualify for the bonus rewards. Bank of America Business Cash Card Webpage.
Bank of America Preferred Rewards Program
Bank of America's "Preferred Reward" program provides extra benefits based on the total amount of assets you have at Bank of America and Merrill Edge. Among the most valuable benefits is a boost to the rewards earned from many of Bank of America's credit cards. Preferred Reward Program.
If you have over $100,000 in assets, you'll achieve Platinum Honors status and get a 75% reward bonus. If you have between $50-100,000 in assets, you'll get Platinum status and a 50% reward bonus. And if you have at least $25,000 in assets, you'll get Gold status and a 25% reward bonus.
This can make a big difference in your Bank of America rewards rates, compared to the competition. For example, the Bank of America Unlimited Cash Rewards card earns 1.5% on your purchases, which is less attractive than the best no-annual-fee cashback cards. However, if you have $100,000 in combined assets at BOA and Merrill, you'll receive a 75% reward bonus, and the card will earn 2.625%, which is the best rate of any no-annual-fee card. With a 50% reward bonus, the rate would still be 2.25%.
Even if you have that much money available, you probably don't want to keep it in a low-interest checking account. But you don't have to. If you have an existing retirement account or other investment assets that you can transfer over to Merrill Lynch, you can qualify for the extra rewards without any substantial additional expense. Your existing mutual funds, ETFs, bonds, stocks, and other investments should transfer over, without having to sell them, you won't incur any fees, except potentially a small account transfer or closing fee at your existing broker, and there is no tax implication. Rates for any future sales or purchases are comparable to what is available elsewhere. And you don't need to move over all your assets, just enough to qualify.
Collecting the Signup Bonus
- This card is primarily interesting for its bonus reward rate on the category of your choice, not for its signup bonus. The typical signup bonus is $200. After subtracting the opportunity cost of using the card for $1,000 of spending, the calculated net value for the initial year is $185 (19 cents per dollar spent).
- There are restrictions to earning the signup bonuses multiple times. You aren't eligible for the Cash Rewards Card if you already have the card, unless you've had it for at least 24 months. But you don't need to cancel it in order to apply for another card.
In the past, we would have recommended signing up for the Premium Rewards card (for its 50,000 point bonus) and converting it to a Cash Rewards Card. But with the new restrictions on getting the Premium Rewards Card, you are more likely to have to apply for the Cash Rewards Card directly.
Regardless, you are still subject to BOA's overall rules of two new cards every three months, three new cards every year, and four new cards every two years.
Notable Benefits
- Access to Mastercard luxury hotel program. When you book at one of the participating hotels, you'll get an number of valuable benefits, like free breakfast, a $100 hotel credit, a room upgrade, and late checkout.Take Advantage of Luxury Hotel Programs for Valuable Extra Perks
- Free ShopRunner membership. Like all World Elite Mastercards, your card entitles you to a complimentary ShopRunner membership, which provides free two-day and return shipping from around 150 of the largest online retailers. ShopRunner
- DoorDash and Hello Fresh discounts. Cardmembers who have a DoorDash membership get $5 off their first two orders each month when paid for by their Mastercard. If you don't have a free membership from Chase, you can get your first three months membership for free through Mastercard. You also get a 5% credit back on each HelloFresh purchase.
- Free museum entry. As with all Bank of America credit cards, you'll get free admission to hundreds of museums on the first weekend of every month. Admission is for the cardholder only. Guests are not included, nor are any special exhibitions and other ticketed shows. Museums on Us.
- BankAmeriDeals. Bank of America has a shopping discount program that works like Amex Offers. To get each discount, you'll need to "activate" it through their website. Once activated, discounts are automatically applied when you use your card for the corresponding purchase. Most deals are cash-back based (typically 10%). BankAmeriDeals.
Bonus Categories
The Cash Rewards Card earns 3% in a your choice of one of the following categories:
- Gas
- Dining
- Drug Stores
- Home Improvements & Furnishings
- Online Shopping
- Travel (and Rent)
At the maximum Preferred Rewards level, the 3% reward rate turns into 5.25%. You can even change your category every month, so you could earn 5.25% on online shopping in one month and 5.25% on Home Improvement in another.
However, bonus rewards are capped on the first $2,500 of spending each quarter. Given that a Platinum Honors member can earn 2.625% on any purchase with the Travel or Premium Rewards Card, the Cash Rewards Card earns up to an extra 2.625% on its bonus categories. The maximum amount of extra rewards you can earn with the Cash Rewards is $262.50 per year.
Since the bonus rewards are capped, it can be useful to get multiple cards. It is also generally better to use the card for categories like online shopping and home improvement, rather on categories like gas and dining where you can already earn high reward rates from other cards.
Keep in mind that most rent or homeowners association charges are classified as part of BOA's travel category and for many people will be an easy way to qualify for the 3-5.25% reward rate.
The card also earns 2% at grocery store and warehouse clubs, which turns into 3.25% at the Platinum Honors level. But since spending in these categories counts against the cap, you'll want to focus on the the choose your 3% categories and only use the card at the 2% categories to fill in any remaining cap space.
Getting Rid of the Card
- Make sure to cash out your rewards balance before you cancel your card.
- If you cancel your card, you may not be able to easily get it back. Bank of America limits your ability to get more than 4 cards every 24 months and 3 cards every 12 months. And you can't get one of their cards if you've gotten more than 3 personal credit cards from any bank in the last 12 months (7 cards for BOA banking customers). If you are signing up for bunch of new credit cards, you won't be able to get new Bank of America cards. Furthermore, you explicitly can't sign up for the Cash Rewards Card if you already have one.
- If you aren't currently using your Cash Rewards card, consider keeping it anyway. You aren't paying an annual fee and, sometime in the future, you may decide that you are willing to make the extra effort to maximize your rewards with its flexible bonus categories.
- You might be able to receive a retention offer to keep your card. It could be enough to make it worthwhile to keep the card.