Bank of America’s credit card options are reasonable in general. What sets them apart, however, is the bank’s Preferred Rewards program. The more money you have with BoA, the more you earn with their credit cards. While each tier has a variety of benefits, YMMV in terms of usefulness. We’ll primarily cover the credit card information in this article.
To enroll in Preferred Rewards, the requirements are simple: have a “qualifying” Bank of America deposit account (such as a personal checking account) and/or Merrill investment account(s), with a three-month combined average daily balance of $X or more. Depending on what X is, you’ll gain access to one of the below tiers. You don’t need to keep exact amounts since it’s a combined average.
Once you qualify for a tier, you’ll retain that tier status for at least 12 months. Your balance can temporarily dip without consequence. BoA goes on to say “If after a year you no longer meet the balance requirement, you’ll have a three-month grace period. If you haven’t met the balance requirement after three months, you’ll be moved to a lower tier or lose your Preferred Rewards benefits.”
Note that you have to manually enroll into the program to get any benefits. It isn’t automatically awarded to customers who may qualify.
There’s also a business version of Preferred Rewards with slightly different requirements and benefits.
SILVER (Unofficial Tier)
$0 minimum and 10% credit card bonus.
This isn’t specifically listed as part of Preferred Rewards, but Bank of America does give a small “10% customer bonus” if you have an existing non-credit account with them.
Their website states: “A 10% Customer Bonus will be added to the Cash Rewards you earn on Net Purchases if either the primary or joint cardholder has an active consumer (non-business) checking, savings or individual retirement account with Bank of America, N.A. (“qualifying account”), or is a client of Merrill Edge®, Merrill Lynch, Pierce, Fenner & Smith Incorporated or U.S. Trust (excluding 401(k) or other employer sponsored plans and some 529 plans).“
Base rate and new cash back rate:
- 3x = 3.3%
- 2x = 2.2%
- 1.5x = 1.65%
- 1x = 1.1%
GOLD
$20,000 minimum and 25% credit card bonus.
In terms of credit card earning rates, this tier is largely useless. The main benefits are incidental, such as small discounts on auto loans and mortgage origination fees. Some people may find these useful, but it’s highly subjective.
Note that at all tiers, the “savings interest rate booster” is a “benefit” that’s objectively worthless. Any high-yield savings account (HYSA) has better rates even with BoA’s “boost.”
Base rate and new cash back rate:
- 3x = 3.75%
- 2x = 2.5%
- 1.5x = 1.875%
- 1x = 1.25%
PLATINUM
$50,000 minimum and 50% credit card bonus.
At Platinum level, most credit card earn rates are comparable to the Chase Trifecta. Bank of America cards earning 1.5% cash back earn 2.25% on all purchases. This is reasonable overall, it’s just that Chase has the advantage. If you don’t have $50,000 to invest, you can get the same rate (or better) by combining the Chase Sapphire Reserve and Chase Freedom Unlimited. This can be a better deal for some people despite the $550 annual fee. YMMV.
Base rate and new cash back rate:
- 3x = 4.5%
- 2x = 3%
- 1.5x = 2.25%
- 1x = 1.25%
PLATINUM HONORS
$100,000 minimum and 75% credit card bonus.
This is the most worthwhile tier. Given the competition in the credit card world, other banks typically have stronger offerings than BoA at lower Preferred Rewards tiers.
Unlimited Cash Rewards and Travel Rewards earn 1.5x on everything, without an annual fee, which allows Platinum Honors customers to earn 2.62% cash back on every purchase. This is often an unbeatable option for general (non-category) everyday spending. Only in a few situations can people earn more cash back without category restrictions.
Premium Rewards also earns 1.5x on everything, except for travel and dining, where it earns 2x points instead. BoA says “That means you could earn up to 3.5 points for every $1 you spend on travel and dining purchases and up to 2.62 points for every $1 you spend on all other purchases.” The $95 annual fee is also offset by $100 in annual airline statement credits.
The only thing which may beat the Platinum Honors program, in our opinion, is the Chase Trifecta. With 2 cpp transfers, cardholders can earn 6% cash back on travel and dining, plus 3% on everyday spending. Bank of America does however have an edge in certain categories, through the Customized Cash Back Rewards Visa.
Base rate and new cash back rate:
- 3x = 5.25%
- 2x = 3.5%
- 1.5x = 2.625%
- 1x = 1.75%
DIAMOND
$1,000,000 minimum and 75% credit card bonus.
This tier doesn’t appear significantly different from Platinum Honors. They include a mortgage rate discount, “lifestyle benefits” and other minor perks. Bank of America includes example logos for Louis Vuitton, MyNextSeason consulting, NetJets, and Broadspire. Credit card earn rates are the same as Platinum Honors.
With Diamond status, you can get access to their new Premium Rewards Elite Visa Infinite credit card. It’s an alternative to arguably-better luxury cards. Options include the Capital One Venture X, Chase Sapphire Reserve, U.S. Bank Altitude Reserve, and American Express Platinum.
DIAMOND HONORS
$10,000,000 minimum and 75% credit card bonus.
This is far beyond the reach of most people, and is nearly identical to the Diamond tier. The only difference (at this time) is a 0.125% extra rate reduction for mortgages and home equity lines of credit.
CONCLUSION
Bank of America’s incentives may not be industry-breaking, but they’re decent bonuses for some people. Most people appear to gain Preferred Rewards status by having brokerage or retirement accounts with Merrill Edge. $VTI is a popular purchase. Keeping large amounts of cash in Bank of America’s checking/savings account is a bad idea, especially in high-inflation environments.
Ultimately, better options may exist, especially for people who are still in the wealth-building phase. If you’re working a 9-5 while just starting on the side business journey, you won’t have $100,000 to throw into stocks. The cash would be put to better use in those side businesses, once the 3+ month emergency fund is set up. The faster and easier route to take advantage of credit cards is to go elsewhere first. Maybe open BoA cards for the sign-up bonuses alone. For everyday spending, only a certain demographic can maximize BoA’s Preferred Rewards program.