Card Review: Bank of America® Cash Rewards credit card

New And Improved Offer That's Bound To Turn Heads

Creditcards.org Team

| January 14, 2019

Whether you only want one credit card or want several to maximize rewards, the Bank of America® Cash Rewards credit card may appeal to you with its everyday rewards combination. If you’re already a loyal Bank of America customer, that loyalty could also net you more than the card’s base rewards without any extra effort on your part.

The Basics

The Bank of America® Cash Rewards credit card offers a simple 3-2-1 approach to rewards, but with a bold new feature. You’ll earn 3% cash back on the category of your choice including gas, online shopping, dining, travel, drug stores, or home improvement/furnishings purchases. Additionally, earn 2% back at grocery stores and wholesale clubs, and 1% back on everything else. Keep in mind that the 3% and 2% categories apply only to the first $2,500 spent in those categories per quarter.

Existing Bank of America customers get even more value out of the card when they redeem their cash back into a Bank of America checking or savings account. If you’re a Preferred Rewards client, you could get 25% to 75% more cash back.

Other redemption options include a statement credit or paper check, but keep in mind that the relationship bonus doesn’t apply when you choose one of these two options. This card has no annual fee.

Sign-up Bonus and Introductory Features

To add to the card’s value proposition, Bank of America offers an online sign-up bonus of $150 after you spend $500 in the first 90 days.

Rewards aren’t the Bank of America® Cash Rewards credit card’s only strong suit, though. The card offers a 0% APR promotion for the first 12 billing cycles for purchases and for any balance transfers you make in the first 60 days after you open your account. For balance transfers, the card charges a typical fee of $10 or 3% of the transferred balance, whichever is greater.

Pros

The new and improved 3% rewards category is bound to be a hit for those who appreciate customized savings. Using this card, consumers can save big in multiple categories. These category choice can be customized once per calendar month to fit almost anyone’s lifestyle. If tons of driving in the summer is something to expect, choose gas rewards as your 3% category before you embark on your road trips. If you have a home improvement project planned in the fall, change that 3% category to home improvement/furnishings prior to starting your project. This card can be tailored to your spending.

The Bank of America® Cash Rewards credit card’s biggest strength lies in its everyday rewards program. According to the Bureau of Labor Statistics, the average U.S. household spends $4,101 on food at home and $1,932 on gasoline per year. Between these two categories alone, this card would generate a minimum of $139.98 in cash back.

The card shines brightest for those who have other accounts with Bank of America or with Merrill Lynch, the bank’s wealth management division. If this describes you, here’s a quick summary of the potential cash back you could earn:

Preferred Rewards Gold (25% bonus)

  • Minimum balance of $20,000 with Bank of America and/or Merrill Lynch needed
  • Choice category rewards rate – 3.75%
  • Grocery/wholesale club rewards rate – 2.5%
  • Base rewards rate – 1.25%

Preferred Rewards Platinum (50% bonus)

  • Minimum balance of $50,000 with Bank of America and/or Merrill Lynch needed
  • Choice categoy rewards rate – 4.5%
  • Grocery/wholesale club rewards rate – 3%
  • Base rewards rate – 1.5%

Preferred Rewards Platinum Honors (75% bonus)

  • Minimum balance of $100,000 with Bank of America and/or Merrill Lynch needed
  • Choice category rewards rate – 5.25%
  • Grocery/wholesale club rewards rate – 3.5%
  • Base rewards rate – 1.75%

The card’s 0% APR is also helpful for people who need to finance a large purchase or transfer a balance from a high-interest credit card. Just make sure you’re making at least the minimum payment every month on time. Otherwise, you may lose the promotion.

Cons

Credit cards with a tiered rewards system are great for those spending categories that offer bonus rewards. But with a base rewards rate of 1%, the Bank of America® Cash Rewards credit card can leave some people wanting.

This may not be an issue if you’re a Preferred Rewards client; otherwise, you may want to consider cash back cards that offer higher base rewards rates like the Citi® Double Cash Card and the Capital One® Quicksilver® Cash Rewards Credit Card.

Another drawback to the card is that its bonus rewards are capped at $2,500 per quarter. That’s $833.33 per month, which should be ample rewards for most people. However, if you do a lot of driving or have many mouths to feed, you could end up earning just 1% cash back on some of your gas, grocery and wholesale club purchases.

Some people may feel that the card’s balance transfer fee is a drawback. However, since balance transfer cards that don’t charge a balance transfer fee typically don’t offer rewards, it shouldn’t stop you from considering the card. In fact, if you transfer less than $5,000, the sign-up bonus alone will cover the fee.

Bank of America® Cash Rewards credit card - $150 Cash Rewards Offer

No annual fee

Apply Now

Excellent/Good Credit Needed

Benefits & KEY FEATURES

    • 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, then, 16.24% - 26.24% Variable APR. 3% fee (min $10) applies to balance transfers
    • If you're a Preferred Rewards client, you can get a 25% - 75% rewards bonus on every purchase

View Details

The Bottom Line

The card’s 0% APR promotion can also help save you money as you’re trying to pay down debt. The ability to customize the category in which you earn cash back is a compelling new offer, especially with common categories like gas, dining, and travel. It’s a card that can fit needs of almost any consumer as is one of our favorites on the market today.

If you need a top-of-wallet credit card to use on everyday purchases, the Bank of America® Cash Rewards credit card is a top contender. The card’s bonus rewards are even more impressive if you bank with Bank of America or invest with Merrill Lynch.

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