If you have a Bank of America® Cash Rewards credit card, there’s a new change you’ll want to take advantage of. And if you don’t have one, our review will cover why you might want to consider applying for this card.
Bank of America Cash Rewards Credit Card
- $150 introductory bonus
- Ability to select your 3% cash back category
- 0% introductory APR on both purchases and balance transfers for the first 12 billing cycles
- No annual fee
- There is a spending cap on bonus categories
- 3% foreign transaction fee
The Bank of America® Cash Rewards credit card has been around for a long time. Historically it has been underwhelming against its competition for other cash back credit cards. But now, Bank of America has made some significant changes in how you select and earn rewards. Will it be enough to make it a top cash back card? Find out below.
About the Bank of America® Cash Rewards credit card
The Bank of America® Cash Rewards credit card is often called the Bank of America 1-2-3 card. That’s because of its reward structure.
The card earns 1% cash back on your everyday purchases, 2% cash back at wholesale clubs and grocery stores, and 3% cash back on a choice category for the first $2,500 in combined grocery/wholesale club/choice category purchases each quarter. There is no annual fee, either.
- No annual fee
- $150 online cash rewards bonus after you spend at least $500 on purchases in the first 90 days of account opening
- NEW OFFER: Maximize your cash back in the category of your choice: gas, online shopping, dining, travel, drug stores, or home improvement /furnishings
- Now earn 3% cash back in your choice category and 2% at grocery stores and wholesale clubs (up to $2,500 in combined choice category/grocery store/wholesale club quarterly purchases), and unlimited 1% on all other purchases
- You can update your choice category for future purchases once each calendar month using the Mobile banking app or Online banking, or do nothing and it stays the same.
- No expiration on rewards
- 0% Introductory APR for 12 billing cycles for purchases AND for any balance transfers made in the first 60 days. After the intro APR offer ends, 16.24% - 26.24% Variable APR will apply. A 3% fee (min $10) applies to all balance transfers
- If you're a Preferred Rewards client, you can get a 25% - 75% rewards bonus on every purchase
Features and Benefits of the Bank of America® Cash Rewards credit card
- Signup Bonus. The signup bonus is $150 in online cash rewards after a $500 a minimum spend in the first 90 days of your account opening, which is a nice bonus.
- Balance Transfer Bonus. A lot of people get this card for the balance transfer offer, which is rather competitive. You’ll get an introductory 0% APR for your first 12 billing cycles for purchases, and for any balance transfers made within 60 days of opening your account.
Bank of America Preferred Rewards
The big advantage of this credit card is Bank of America Preferred Rewards. Basically, the more cash you hold with Bank of America and/or Merrill Lynch, the more you’ll get in cash back. If you’re a Bank of America Preferred Rewards client, you could increase your cash back bonus as high as 25 to 75%.
So for example, if you have up to $20,000 in total assets (including checking, savings, general investments, and retirement accounts) with Bank of America, you’ll earn at the standard 1%-2%-3% rate.
If you have between $20,000 and $50,000 in total assets, you’ll reach the Gold Level and receive a 25% bonus on your cash back. This means 1% is actually 1.25%, 2% is actually 2.5%, and 3% is actually 3.75%.
If you’re at the Gold Level, then the “everything else” category still doesn’t really make the card worth it. But for your choice category, wholesale clubs and grocery stores, it starts to get a touch more competitive.
With wholesale clubs, it’s pretty straightforward. If you have the Costco or Sam’s Club card, you earn 2% and 1%, respectively. So 2.5% with the Bank of America® Cash Rewards card, versus 2% or 1% with the wholesale club cards make it a pretty logical move.
For the grocery stores, I think really depends on how you use it. Some cards earn more than what this credit card will give you, but there are also more strict caps. The Blue Cash Everyday card by American Express, for instance, gets 3% cash back, but there’s a $6,000 annual cap.
That means if you spend at least $6,000 at the grocery store every year (or $500 per month), the Bank of America® Cash Rewards credit card starts to become a better deal. Otherwise, the Blue Cash Everyday card is a better option.
Moving up one level, you have Platinum. Platinum Level is reached once you have $50,000 to $100,000 in total assets with Bank of America and Merrill Lynch. The cash back reward boost at this level is 50%.
This makes gas 4.5% cash back on your choice category, 3% cash back at grocery stores and wholesale clubs , and 1.5% cash back on all other purchases. The “everything else” category still doesn’t make enough sense from a rewards viewpoint. But the choice category, wholesale clubs and grocery store categories make plenty.
To provide some comparison, I’ll again draw on the Blue Cash Everyday Card from American Express. For grocery stores, both cards earn 3% cash back. In most cases, you’re unbiased because it’s the equivalent earning rate.
But remember that the Bank of America® Cash Rewards card has a higher overall cap $2,500 per quarter vs. $6,000 annually on the AMEX). So in this situation, it doesn’t make sense to get the Blue Cash Everyday card. Bank of America wins.
Platinum Honors Level
Lastly, those with at least $100,000 in total assets are considered to be at the Platinum Honors Level. This level comes with a 75% cash back boost, which means you get 5.25% cash back on your choice category, 3.5% cash back at wholesale clubs and grocery stores, and 1.75% cash back on all other purchases.
The only category that doesn’t make total sense here is the “everything else” category – merely because it’s still less than 2% (and you can find similar cards as I mentioned before).
But for cash back at wholesale clubs, grocery stores, and on your select category, this card becomes an excellent option. What you need to consider, though, is that a bunch of cash with Bank of America and/or Merrill Lynch is required to get the best cash back rates. Because of that, it might not be the best cash back credit card for everyone.
- Fraud Protection. Bank of America will prevent likely fraud if unusual spending patterns are detected on your card and let you know if they suspect fraudulent activity. You also receive a $0 Liability Guarantee for fraudulent transactions with this card.
- Securely Shop Online. You can generate a temporary credit card number using Bank of America’s ShopSafe service when you buy online. This way your actual credit card number remains totally hidden and protected to keep you completely safe.
- Chip Technology. Your Cash Rewards card will come with chip technology for extra safety and protection when shopping at chip-enabled terminals.
- Optional Overdraft Protection. You can link your eligible Bank of America checking account to your Cash Rewards card as an elective service so you can avoid having your purchase declined or check returned when using your checking account.
- Digital Wallet. The Bank of America® Cash Rewards card can be linked to Apple Pay, Google Pay, or Samsung Pay. This gives you more flexibility and security when you shop using your mobile device in-store or in-app.
- Online and Mobile Banking. Bank of America has an excellent online and mobile platform for banking. This allows you to bank on the go wherever you are safely and securely while using a user-friendly (and aesthetically pleasing) system.
- Custom Alerts. You can pick from different types of email or text alerts to stay on top of purchase activity, due dates, balances, and more.
- Text Banking. Bank of America likes to keep it old-school in some ways. With text banking, you can send a text and get a reply in a few seconds that tells you things like your balance or due date.
- FICO Score. Bank of America now offers an optional service for you to get an updated FICO Score given to you on a monthly basis for free. You can access it through your mobile app or via online banking.
How to Sign Up for the Bank of America® Cash Rewards credit card
You have to be at least 18 years old and have both a U.S. mailing address and a Social Security number in order to apply for the Bank of America® Cash Rewards credit card.
You can do an application online or over the phone, and you’ll need to provide the following information:
- Date of birth
- Home address
- Phone number
- Total annual income
- Your income source (i.e., employed, self-employed)
- Email address
Once your application is done, you can get a decision in as little as 30 seconds. In some cases, Bank of America may need more information or time to make a decision, in which case it can take a little longer.
Bank of America® Cash Rewards credit card Pricing
- Annual Fee: None
- Annual Percentage Rate (APR) for Purchases: 0% Introductory APR for the first 12 Statement Closing Dates following the opening of your account. After that, your APR will be 16.24% to 26.24%, based on your creditworthiness when you open your account. This APR will vary with the market based on the Prime Rate.
- APR for Balance Transfers: 0% Introductory APR for the first 12 Statement Closing Dates following the opening of your account for transactions made within 60 days of opening your account. After that, your APR will be 16.24% to 26.24%, based on your creditworthiness when you open your account. This APR will vary with the market based on the Prime Rate.
- Balance Transfer Fee: Either $10 or 3% of the amount of each transaction, whichever is greater.
- Cash Advance Fee: Either $10 or 3% of the amount of each transaction, whichever is greater (for direct deposits and check cash advances); either $10 or 5% of the amount of each transaction, whichever is greater (for ATM, over-the-counter, same-day online and cash equivalent cash advances).
- Foreign Transaction Fee: 3% of the U.S. dollar amount of each transaction (1) made in a foreign currency, or (2) made in U.S. dollars if the transaction is made or processed outside of the United States. This fee will be in addition to any other applicable fee.
- Late Payment Fee: Up to $39
- Returned Payment Fee: Up to $28
What Changed In January 2019?
Currently, with the Bank of America® Cash Rewards credit card, you get different cash back rates for different categories (as I described above) and you have a $2,500 cap per quarter. The big change is that in January 2019 Bank of America now allows you to be able to pick your 3% categories.
Instead of having an everyday rate of 3% cash back on gas, you now also have dining, drug stores, home improvement, travel, and online shopping to pick from. That means six total categories you can rotate in and out of if you so desire.
For someone who has their assets with Bank of America and Merrill Lynch, you’re going to qualify for higher multipliers depending on how much money you have. At the top of the list is a 75% cash back boost, which means 3% is really going to be 5.25% of the categories.
An official statement from Bank of America reads as follows:
“We understand that consumers’ lives and spending priorities change constantly, and clients tell us that they want the power to choose how they are rewarded,” said Jason Gaughan, credit card executive at Bank of America. “Clients can choose which categories best align with their life priorities, allowing them to maximize the rewards they earn.”
Selecting your bonus will be easy too. According to Bank of America, you “can easily change the 3% category for future purchases once each calendar month in their Mobile Banking app or in Online Banking, or make no change and it stays the same,” while the “3% cash back category will initially be set to gas.”
This changes the game for many people. Without this change, I’d rate the card as mediocre, but this puts into contention with some of the better cash back credit cards now. That being said, let’s look at some of the pros and cons:
Pros and Cons of the Bank of America® Cash Rewards credit card
- The introductory bonus of $150 is simple to get – requiring only $500 in spending in the first 90 days of opening.
- You can select from six different 3% cash back categories. And it can be changed each month if you desire.
- If you have assets with Bank of America or Merrill Lynch, you can boost your cash back earnings.
- You get a 0% introductory APR on both purchases and balance transfers for the first 12 months.
- There is no annual fee.
- Even with the new changes, you’ll earn 3% and 2% cash back on the first $2,500 in combined choice category/grocery store/wholesale club purchases each quarter, then earn 1%; so you’re capped.
- The card charges a foreign transaction fee of 3%. Many competing cards don’t charge this fee.
- There are no additional perks like purchase protection.
- Depending on how you spend, you may be better off getting a straight 2% cash back card, like the Citi Double Cash Card.
Should You Sign Up for the Bank of America® Cash Rewards credit card?
The 1% and 2% cash back options aren’t that great because there are other cards out there that will get you a flat 2% back on all of your purchases. Cards like the Citi Double Cash Card come to mind.
The 3% back on a choice category also isn’t astounding, because there are credit cards that give you 5% back on select categories and also don’t have annual fees.
Notwithstanding all of this, the Bank of America® Cash Rewards credit card is a solid beginner’s cash back card. And with the new changes, it might even become the best card in your wallet, depending on how you spend.
The $150 signup bonus is a rather good deal, but other cards give you the same bonus and give you several choices for exchanging that bonus.
Plus the Bank of America® Cash Rewards credit card doesn’t come with any extra perks, like an extended warranty option on purchases, purchase protection, or added travel protection.
So the card doesn’t really give you anything special.
This card is also a good option if you don’t want the hassle of having too many cards and you just want one. But again, if you’re willing to hack your wallet a bit and have several different cards, you can get much more value.
Overall, I don’t think it’s a bad card. I think it’s a rather good beginner card. It’s a reliable card to keep in your wallet, but if you don’t have the $100,000 in assets, it doesn’t make much sense to be your only card.
Once you have the assets, you don’t mind mixing and matching cards, or you just want to get the most cash back in particular categories, then the Bank of America® Cash Rewards credit card is fine as your primary card.
So the short answer to all of this?
It’s not the best cash back credit card, but the new changes make it better. My advice would be to keep it in your rotation of credit cards and use it strategically when you can get the full 3% cash back.Topics: Credit Cards • Reviews