Chasing 2.625% Cash Back with Bank of America: Worth It or Not?
With a portfolio of a few solid and some obscure credit cards, Bank of America is a strong card issuer behind Chase, Amex, and Citi. Like the other big banks, BOA has a reliable set of options for cash back in addition to travel rewards. My most recent activity with BOA has been through both flavors of Amtrak credit cards, and that goes back several years. Beyond those cards, I really haven’t focused much on BOA. That said, I’ve been focusing more on their cash back offerings of late. Here’s how I decided whether it’s worth chasing 2.625% cash back with BOA.
BOA Preferred Rewards and Achieving Status
BOA’s banking loyalty program is known as Preferred Rewards. PDX Deal Guy has written about this program previously here. The program has been around for years, and while some names have been changed and tweaks have been made around the edges, it’s still basically the same program. Here’s a quick refresher of the status requirement and levels:
Requirement: To earn status at the following levels you must maintain a 3-month average combined balance at the following levels in your qualifying Bank of America deposit accounts and/or your qualifying Merrill Edge® and Merrill Lynch investment accounts. Levels are:
Preferred Rewards Gold: $20k balance requirement. 25% rewards bonus on eligible BOA credit cards.
Preferred Rewards Platinum: $50k balance requirement. 50% rewards bonus on eligible BOA credit cards.
Preferred Rewards Platinum Honors: $100k balance requirement. 75% rewards bonus on eligible BOA credit cards.
BOA provides the full list of requirements and benefits for all levels here.
How to Achieve 2.625% Cash Back
In order to achieve 2.625% cash back on credit card spend, you must hold Platinum Honors status with BOA and obtain the Bank of America Premium Rewards Visa Signature card. (You can get 2.625% back in travel credit with the no fee BOA Travel Rewards card, too.) This credit card earns 2 BOA points on travel/dining spend and 1.5 BOA points on all other spend. With the 75% bonus, that’s 3.5 points on travel/dining spend and 2.625 points for all other spend. You can cash these points out at a 1:1 ratio into a Bank of America or Merrill Lynch account.
The 3.5% cash back rate on travel/dining spend is nice, but many of us focus much more of our spending in the “all other spend” category. It’s also worth noting that BOA’s Cash Rewards card can provide up to 5.25% cash back with Platinum Honors status, but it’s capped at $2,500 spend per quarter per account. Therefore, I will focus on the 2.625% cash back rate the Premium Rewards card provides for all other spend in this article, since a cardholder has the ability to comparatively scale this spend more significantly.
My wife and I each hold a Discover it Miles credit card, earning us 1.5% cash back and a 1.5% match at the end of the cardmember year. The card is effectively a 3% cash back credit card for all spend in the first cardmember year. There is no lifetime language in Discover it Miles credit card application. Long story short, we have obtained 3% cash back long term with new applications and accounts. This clearly provides better rewards to us than BOA would.
While not 2.625%, we effectively obtain 2.5% cash back with the Amex Blue Business Plus card (up to $50k spend per account) through the Amex Platinum Card for Schwab. Also, we value the PenFed Power Cash Rewards Visa card, which is a solid 2% cash back earner for us when we feel like using it in addition to the Discover it Miles card. The Citi Double Cash card also provides us 2% cash back and higher value for Thank You portal redemptions, including Disney World. None of these cards have stringent, high account balance requirements to obtain those rewards rates.
Obviously, the most significant part of obtaining Platinum Honors status is holding $100k in Bank of America checking/savings accounts or Merrill Edge/Merrill Lynch investment accounts. We do not currently hold funds in any of those accounts, so this would require moving funds from one of our other investment accounts. Our investment and retirement accounts are held with other entities, and we value the practices and principles of those groups. Frankly, we aren’t interested in moving $100k from those parties to Merrill Edge/Merrill Lynch or Bank of America. A credit card gimmick doesn’t move the needle for us, either.
2.625% is the Current Cash Back Rate
At the risk of stating the obvious, 2.625% is the current cash back rate for all spend on the BOA Premium Rewards Visa as a Platinum Honors member. There is no assurance that BOA will not change the qualification requirements for Preferred Rewards or devalue the 75% bonus at any time they choose. While this hasn’t happened recently, we have no control over Bank of America reducing their rewards or tightening their requirements.
We decided against chasing 2.625% cash back with BOA based on this analysis. Via Discover, we are continuously obtaining 3% cash back, far superior to BOA’s offering. We also value the 2.5% cash back play and Membership Rewards versatility of the Amex Blue Business Plus card over an extra 0.125% cash back from BOA. Also, we are maintaining our relationships with the retirement and investment firms that most closely align with our priorities.
Worth It For Some
Of course, many will find going after a BOA Platinum Honors level with Preferred Rewards and chasing 2.625% cash back with the Preferred Rewards Visa to be a worthy goal. I particularly think it’s worth considering if you are unable to satisfy your needs with the Discover it Miles card or other cards providing superior rewards. If you need significant spending capacity beyond what other more worthy cards provide, BOA is definitely worth exploring. And finally, this BOA play may be worth it for those of you who already have an existing banking and/or investment relationship with BOA/Merrill.
We focus our cash back rewards with Discover, Chase, American Express, and Citi. It’s always good to have other cash back options, though, and BOA provides strong cash back capabilities with a Platinum Honors relationship. Regardless of bank, look for the optimal cash back rates for your specific credit card spend. Do you take advantage of the 2.625% cash back rate with the Platinum Rewards Visa? Why or why not?