Update June 2020: In response to COVID-19, the Bank of America Travel Rewards Credit Card has expanded the eligible categories of spending against which you can get their 1.5% to 2.62% back from only Travel purchases to include Grocery Stores, Dining, and Takeout. This applies through December 31st, 2020 and applies retroactively to qualifying purchases made within the last 12 months. This should make it much easier to redeem your points for optimal value. Here is the fine print:
Travel Statement Credit Expanded Category Offer. Now through 12/31/2020, you can also redeem Points for a statement credit in U.S. dollars to offset qualifying grocery store and dining purchases. This will apply to all qualifying purchases that posted to your account in the last 12 months, but is limited to the most recent 2,500. Eligible purchases for this statement credit offer include those made in the following merchant category codes (MCC): Grocery Stores/Supermarkets (MCC 5411), Freezer/Meat Lockers (MCC 5422), Candy/Nut/Confection Stores (MCC 5441), Dairy Product Stores (MCC 5451) Bakeries (MCC 5462), Misc. Food Stores (MCC 5499), Eating Places and Restaurants (MCC 5812), Drinking Places (Alcoholic Beverages), Bars, Taverns, Cocktail lounges, Nightclubs and Discotheques (MCC 5813), and Fast Food Restaurants (MCC 5814). Excluded from this offer are wholesale clubs, superstores and smaller stores (like drug stores and convenience stores) that sell groceries and other products. We do not determine which MCC a merchant is assigned.
Full card review:
Here are the highlights of this card:
- Earn unlimited 1.5 points per $1 spent on all purchases, with no annual fee and no foreign transaction fees and your points don’t expire.
- 25,000 online bonus points if you make at least $1,000 in purchases in the first 90 days – that can be a $250 statement credit toward travel purchases.
- Redeem points for a statement credit to pay for flights, hotels, vacation packages, cruises, rental cars, or baggage fees
- 0% Introductory APR for 12 billing cycles for purchases.
- Get an additional 10% customer points bonus on every purchase when you have an active Bank of America® checking or savings account.
- If you’re a Preferred Rewards client, you can increase that bonus to 25% – 75%.
Let’s consider the options. Bank of America’s interest rates on cash accounts tend to be lower than highest-available outside banks, so moving cash over to qualify may reduce your interest earnings. Merrill Lynch advisory accounts also usually come with management fees. However, if you have brokerage assets like mutual funds and ETFs, moving them over to Merrill Edge won’t incur any additional fees and they charge the same $0 per commission as the other major brokers.
I recently did a partial transfer of a little over $100k of brokerage assets (Vanguard funds) over to Merrill Edge to qualify for Platinum Honors. I should mention it may take a while for your “3-month average combined balance” to actually reach the $100k level and officially qualify for Platinum Honors. Only after that will the 75% rewards bonus on credit card rewards kick in.
(Side note: Stack this offer with their
Not all Bank of America consumer credit cards qualify for Preferred Rewards. Another card that does qualify is the
Cash Back Rewards Tiers for Preferred Rewards
This card has a relatively simple rewards structure; you earn 1.5 points per dollar spent on all purchases. 1 point = 1 cent statement credit against any travel purchase made on the card (flights, hotels, vacation packages, cruises, rental cars, or baggage fees). As long you as you travel at least occasionally, I feel it is okay to value them at 1 cent per point, which means you could call this a “1.5% back on all purchases, if applied towards travel purchases” rewards card. Here’s how the bonuses then work out:
- Platinum Honors: 2.625% back, if applied towards travel, or 2.625 points per dollar spent on any purchase (75% bonus).
- Platinum: 2.25% back, if applied towards travel, or 2.25 points per dollar spent on any purchase (50% bonus).
- Gold: 1.875% back, if applied towards travel, or 1.875 points per dollar spent on any purchase (25% bonus).
Note that the terms state “The Preferred Rewards bonus will replace the customer bonus you may already receive with the card.”, which I interpret to mean that you will lose the 10% bonus for redeeming your cash back into a Bank of America® checking or savings account.
For more details, here are my
Their plan is working because Bank of America has managed to convince me to go from only having a checking account with them to now also having a Merrill Edge brokerage account and a Bank of America credit card. I definitely realize not everyone will have this level of assets to move around, and so this is somewhat a restricted offer. But if you do then it is worth considering. Both Platinum and Platinum Honors levels allow you to reach tiers that effectively give you over 2% back on all purchases, with the important caveat that your rewards must offset previous travel purchases on the card.
Bottom line. If you are able and willing to keep enough brokerage assets ($50k/$100k) at Merrill Edge, it will qualify you for their Preferred Rewards program. By using investment assets and not cash balances, it won’t cost you any potential interest from elsewhere. This allows the Bank of America Travel Rewards Credit Card to earn up to 2.6% back on ALL purchases in the form of statement credit offsetting any travel purchases within the last 12 months.
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