Review: Bank of America Cash Rewards Credit Card
Many of the credit cards we review on Savings Beagle tend toward travel rewards credit cards since that’s where outsized value can be found…if you’re a traveler, that is.
Truth be told, not everyone’s goal is to travel for little to no money.
For those individuals, a cash back earning credit card is the best route to maximizing the benefits associated with their daily spend.
We all know that saving money is the key to any sound financial plan, and the Bank of America Cash Rewards credit card just might be the money saver you want in your wallet.
Let’s take a look at why the Bank of America Cash Rewards credit card might be worth considering.
Bank of America Cash Rewards Credit Card
Sign-Up Bonus
The Bank of America Cash Rewards card currently has a sign-up bonus of $200 after making $1,000 in purchases within the first 90 days of account opening.
As with any sign-up bonus, this can change at any time. A quick Internet search can usually find the latest/best sign-up bonus for any credit card.
Annual Fee
No annual fee
Cash Back Earning
- Earn 3% cash back in the category of your choice: gas, online shopping, dining/travel, drug stores or home improvement/furnishings
- Earn 2% cash back at grocery stores and wholesale clubs
- Earn 1% cash back on all other purchases
You earn the 3% and 2% on the first $2,500 in combined purchases in those two categories each quarter after which each category will earn 1% until the next quarter begins.
So, as an example, if you select online shopping as your 3% category, you can spend up to $2,500 and earn the full 3% – $75 in cash back – each quarter.
If, however, you were to spend the full $2,500 on your 3% category, you’d only earn 1% on your grocery store and wholesale club purchases that quarter since those two cash back categories are combined in the $2,500 quarterly spending cap.
The 3% cash back category choice can be changed up to once per month should your spending plans change.
If you don’t choose a 3% cash back category, it will default to gasoline purchases.
The selected category will stay the same, month-to-month, quarter-to-quarter unless you change it.
Redeeming Cash Back
First off, the cash back you earn does not expire, so you can horde as much, or as little, as you want before taking advantage of what you’ve earned.
There is no minimum redemption requirement when using your earned cash back as a statement credit or for depositing into a Bank of America checking or savings account or an eligible Merrill Lynch or Merrill Edge account.
There is, however, a $25 minimum redemption requirement for other redemption options such as a check or a deposit into a 529 account with Merrill Lynch or Merrill Edge.
0% Introductory Offer
New cardholders are eligible for a 0% introductory APR for the first 15 statement closing dates following the opening of your account. This is for both purchases and balance transfers. After that period, your APR will be 16.24% to 26.24% based on your creditworthiness when the account is opened.
Some use a 0% introductory offer to “use the bank’s money” without interest for large purchases or other opportunities.
You should avoid at all costs using a 0% introductory offer if you don’t think you’ll be able to pay the balance off in full before interest charges begin being charged – 15 months (or less depending on the purchase/balance transfer date) in this case.
What Makes This Card Even Better
The Bank of America Preferred Rewards program allows Bank of America Cash Rewards cardholders to earn even more cash back depending on combined balances in Bank of America banking or Merrill investment accounts.
The B of A Preferred Rewards program offers a 25% – 75% bonus on top of the regular cash back rates you earn with the Cash Rewards card.
Here’s a look at the Cash Rewards card’s effective earning rates at each level.
Gold (combined balance required to qualify $20,000 to $49,999)
- Category of Choice effective rate – 3.75% cash back
- Grocery/Wholesale Clubs effective rate – 2.5% cash back
- All Purchases effective rate – 1.25% cash back
Platinum (combined balance required to qualify $50,000 to $99,999)
- Category of Choice effective rate – 4.5% cash back
- Grocery/Wholesale Clubs effective rate – 3% cash back
- All Purchases effective rate – 1.5% cash back
Platinum Honors (combined balance required to qualify $100,000+)
- Category of Choice effective rate – 5.25% cash back
- Grocery/Wholesale Clubs effective rate – 3.5% cash back
- All Purchases effective rate – 1.75% cash back
As you can see, if you have sizable combined balances between Bank of America banking and Merrill investment accounts, your cash back earning can increase substantially.
BankAmeriDeals
Additionally, Bank of America offers money-saving deals similar to Chase Offers and Amex Offers.
BankAmeriDeals offer a variety of cash back deals to retailers, restaurants and more.
As with the Chase and Amex Offers, you view available Deals on the Mobile Banking app or via the Bank of America Online Banking site. If you see a deal you like, add it to your account and pay with your eligible Bank of America credit or debit card…in this case, the Bank of America Cash Rewards credit card…and automatically earn the extra cash back associated with that deal.
Wrap Up
If earning cash back is your goal, then the Bank of America Cash Rewards credit card is a worthy contender for your everday spend.
That is especially so if you have significant monetary holdings in Bank of America banking and/or Merrill investment accounts.
One reason not to consider this card…if you’re going to spend significantly more than the $2,500 spending cap on the 3%/2% categories each quarter, then other credit cards might be more appropriate.
But if your regular spend falls roughly into the spending cap limits, and especially if you can take advantage of the Preferred Rewards bonus cash back levels, the Bank of America Cash Rewards card is worth a look.
