If you have good credit and your monthly spending patterns aren’t always that predictable, the Bank of America Cash Rewards Credit Card is a good way to tailor your rewards to your biggest budget items. In any given month, you’ll get to choose one of several popular bonus categories to earn 3% cash back, and you’ll always earn 2% cash back at grocery stores and wholesale clubs.
While the 2% and 3% rates only apply to the first $2,500 you charge to your card each quarter, eligible Bank of America banking customers will get a rewards boost to help offset these limitations. Customers with a big enough deposit balance in Bank of America or Merrill Lynch accounts will get 25% to 75% more in cash-back earnings. (More on this below.)
Adaptable, competitive rewards rates
Not as simple (or potentially lucrative) as a flat-rate card
- Adaptable, competitive reward rates: You might see a higher top tier on other cash-back cards, but you may not be able to keep the category for longer than a quarter (if it’s a revolving bonus card) and chances are you won’t get a choice of categories. Plus, if you have a large chunk of money in Bank of America and Merrill accounts, you could earn up to 5.25% back in your top earning category.
- Solid bonus: Getting $200 cash back for spending $1,000 in your first 90 days isn’t half bad, and is comparable or better than competing offers.
- Earning caps: The 3% and 2% cash back rewards only apply to the first $2,500 you spend on those categories each quarter. Depending on your budget, this can drastically limit the rewards you’ll earn in these areas. (There isn’t, however, a limit on your 1% back earnings, which applies to all purchases once you’ve hit the threshold.)
- Not as simple (or potentially lucrative) as a flat-rate card: Plenty of cash-back cards give you 1.5% back on every dollar you spend, and there are even a few that offer 2%, under certain circumstances. This rewards scheme is more complicated. To get the most out of the card, you should anticipate where you’ll spend your money in the following month.
Bonus for New Cardholders
The $200 bonus on this card is competitive with other cash-back credit cards with no annual fee—though you’ll have to spend $1,000 within 90 days of account opening to get it, twice as much as some competitors require.
Earning Points & Rewards
The Bank of America Cash Rewards Credit Card lets you earn 3% cash back in a category of your choosing (gas, online shopping, dining, travel, drug stores, or home improvement/furnishings) and 2% back at grocery stores and wholesale clubs. Those rates are limited to the first $2,500 spent in both of these categories each quarter, and then you’ll get the same 1% back that applies to purchases in all non-bonus categories.
You’ll have the option to change your 3% category once per calendar month, and if you don’t, your last choice continues to apply.
While the 3% bonus is a solid reward rate, some cards offer 3% back in more than one spending area. What’s more, a card with one rewards rate is easier, and could potentially offer even more value, depending on your spending habits and the particular card. Let’s say your quarterly spending consists of $1,500 on dining out—your chosen 3% category—$1,000 at grocery stores or wholesale clubs, and $3,000 on other purchases.
In that case, you would earn $95 each quarter—$45 on dining, $20 at grocery stores and wholesale clubs, and $30 on regular spending. That’s $380 in rewards within a year. By comparison, if you spent the same amount on a flat-rate cash-back card that gives you 2% back on everything, you would make $440 in a year.
Then again, if you’re a Bank of America customer with at least $20,000 in deposits, you can boost those earnings. Here’s the breakdown, based on the average three-month combined balance in qualified Bank of America and Merrill accounts:
- $20,000 to $49,999 on deposit (Gold): Earn 25% more rewards
- $50,000 to $99,999 on deposit (Platinum): Earn 50% more rewards
- $100,000 or more on deposit (Platinum Honors): Earn 75% more rewards
This means you could get up to 5.25% back on the top bonus category (up to the $2,500 quarterly cap) and rival some of the highest rewards rates on other credit cards.
The Bank of America Cash Rewards Credit Card means it when it says it’s a cash-back credit card—there aren’t a lot of ways to redeem your rewards. You can’t cash them in for travel, for example, nor can you use them for gift cards or merchandise purchased through Bank of America. But, you may very well want a cash-back card to get cash. And it is, after all, the most versatile. Plus, your rewards won’t expire as long as your account remains open.
You do have the following options:
- Get statement credits in any amount
- Get a deposit to your Bank of America checking or savings account, or an eligible Merrill Lynch or Merrill Edge account in any amount
- Contribute a minimum of $25 in rewards to a qualifying 529 college savings account with Merrill Lynch or Merrill Edge
You can set up automatic redemptions of at least $25 into an eligible Merrill Lynch, Merrill Edge, or Bank of America account.
How to Get the Most Out of This Card
While the best way to maximize your earnings is to be in Bank of America’s Preferred Rewards program, we recognize the deposit requirements may be unrealistic for many. Luckily, earning the $200 cash bonus is quite a bit easier: just spend an average of $334 a month during your first three months.
From there, make sure you put all your purchases from the bonus categories on this card, at least until you hit the $2,500 quarterly limit for bonus points.
Bank of America gets average marks for customer service, but ranks third out of 11 issuers in J.D. Power’s 2020 Credit Card Satisfaction Study. It does have a popular mobile app that ranked second only to American Express in a separate J.D. Power study. Plus, you can get a free FICO score either online or through the app.
Bank of America offers standard security features for a credit card. It does let you set up account alerts so you’re updated about payments, due dates, and more. Those could help you spot fraudulent charges.
None of the fees that come with this card stand out from what competitors charge. Travel bugs should take note that there is a 3% foreign transaction fee, so you’ll want to use a different card for purchases in other countries.