Bank of America’s New Premium Rewards Card

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Bank of America just released a new credit card called the Premium Rewards Card. It comes with 50,000 bonus points for spending $3,000 on your new card within 90 days of account opening.

This is not a credit card you want to open for the purpose of flying free in First Class. Points are worth one cent, point blank. They cannot be transferred to airline or hotel loyalty programs and redeemed as airline miles or hotel points for outsized value on premium cabin flights or hotel suites.

Despite that fact, to me this card is a no-brainer to get–primarily for the sign up bonus, which is like a free $500.

Quick Facts

  • Sign Up Bonus: 50,000 bonus points after spending $3,000 within 90 days of account opening.
  • Value of Points: 1 cent each
  • Category Bonuses: 2x on travel and dining purchases, 1.5x on everything else. If you’re a Bank of America Preferred Rewards client with assets in a Bank of America/Merrill Edge/Merrill Lynch account, then you’ll earn higher category bonuses.
  • Travel Statement Credit: $100 in “airline incidental” statement credit to apply towards travel expenses every year.
  • Global Entry/TSA Pre✓ ® Credit: $100 credit to cover your application fee every four years.
  • Global Acceptance: Chip technology and no foreign transaction fees.
  • Annual Fee: $95, not waived the first year.

Credit card links have been removed from posts and added to the menu bar at the top of every page of MileValue under the heading Top Travel Credit Cards – Point Rewards Cards.

Sign Up Bonus

For spending $3,000 on the Premium Rewards Card, you’ll earn 50,000 bonus points. Points can be redeemed a number of ways. For example, you can redeem them in the form of a statement credit (on any purchase, not just travel expenses) or have them deposited in your Bank of America/Merrill Edge/Merrill Lynch account as cash. The bottom line is the same: they are always worth one cent each.

With the spending it takes to meet the minimum spending requirement, you’ll earn at least 4,500 points along with the 50,000 bonus points. That’s 54,500 points, worth one cent each, for a total return of $545.

While it isn’t marketed as one, this is essentially a cash back card. The difference between the Premium Rewards card and typical cash back card is that it’s got a few perks aimed at frequent travelers.

Category Bonuses

For the majority of you, the standard category bonuses apply:

  • Every dollar you spend on travel, you earn 2 points
  • Every dollar you spend on dining, you earn 2 points
  • Every dollar spent on anything else earns 1.5 points

These category bonuses are par for the course–not particularly competitive. Aside from meeting the minimum spending requirement for the sign up bonus of course, you’d be better off spending on the Citi Double Cash Card than Premium Rewards card if it’s cash back you’re after.

There are many cards better for non-bonused spend if you’re into actual travel rewards, like the Starwood Preferred Guest Amex card that earns points most people value well over 2 cents each, or the Blue Business Plus Amex that earns 2x Membership Rewards worth about 2 cents each for a total return of around 4 cents on the dollar.

The game gets more interesting, however, if you are a Preferred Rewards client with assets in a Bank of America, Merrill Edge, and/or Merrill Lynch account.

Learn more about Bank of America Preferred Rewards here.

Statement Credits

Global Entry / TSA Pre✓ ®

Every four years, you will get a $100 statement credit towards the fee to apply for either.

Airline Incidentals Statement Credit

You’ll get $100 in statement credits to apply towards travel expenses every calendar year. This means you could get $200 in travel statement credits before the second annual fee is charged (one $100 credit in 2017 and one in January – September of 2018, assuming you applied now).  So that’s pretty cool. But…

Look at how Bank of America defines “travel incidentals”:

Qualifying transactions are those purchases made on domestic-originated flights on certain U.S.-domestic airline carriers that include: preferred seating upgrades, ticket change/cancellation fees, checked baggage fees, in-flight entertainment, onboard food and beverage charges, and airport lounge fees affiliated with eligible airline carriers. Airline ticket purchases, mileage point purchases, mileage point transfer fees, gift cards, duty-free purchases, award tickets and fees incurred with airline alliance partners do not qualify. Airline incidental fee transactions must be separate from airline ticket charges.

That’s pretty crappy in my opinion, discounting things like cash flights and award fees.

Even though I don’t typically spend much on things they list as incidental expenses, I wouldn’t be surprised if I spent $100 on those things spread out over a year. It’s a bit more of a stretch than calling the travel statement credit from a card like the Sapphire Reserve cash, but I’d still consider the Premium Reward’s to be like cash as well.

Fees

You will not be charged foreign transaction fees when using this card abroad or on purchases with foreign merchants. There is a $95 annual fee, and it is not waived the first year.

Should You Get This Card?

There’s always an opportunity cost to consider when you could be spending towards more a lucrative bonus, i.e. one that gives you a heap of airline miles or transferrable points you can book First Class with. But if you’re a points omnivore who isn’t working towards another large bonus right now and/or can manufacture spend, I don’t see a reason not to apply.

For the first year of card membership, I see the Premium Rewards Card as a free $550…possibly a free $650 if you haven’t gotten Global Entry Yet and want to.

Where did I get those numbers from?

  • Value of sign up bonus: $500
  • Minimum value of points earned from meeting minimum spending requirement: $45
  • Travel Statement Credit: $100 (I could count the value of this in the first year as $200, as it is possible to get $100 in 2017, and another $100 in 2018 before the second annual fee. But since Bank of America’s definition of ‘travel incidentals’ is pretty limiting, I’m not going to. I doubt I’d spend $200 on those things between now and September of 2018…but I bet many of you would)
  • Annual fee: -$95

$500 + $45 + $100 – $95 = $550

If you value the global entry credit at $100, then you can see where I got $650 from. And if you are the type of person that would spend $100 between now and December on ‘travel incidentals’ like seat upgrades and checked bags, and another $100 between January and September of 2018, then this card’s worth an additional $100 to you. That would bring the total to $750.

So, if you’re a points omnivore, I do think getting this card and keeping it open at least a year is worth it. You will profit a significant amount for only spending around $3k.

Photo by Mike Mozart
Photo by Mike Mozart

Looking Towards the Second Year

If you think you’ll continue to spend $100 a year on travel incidentals not covered elsewhere, then really, there’s not much of a reason to close the Premium Rewards Card. The travel statement credit outweighs the annual fee. You don’t have to use the card–it can sit in your sock drawer while the account ages for the sake of your credit score. Unless you have a lot of money in accounts tied to Bank of America’s Preferred Rewards Program, I don’t see a compelling reason to move it to the front of your wallet.

Agree? Disagree? Tell me what you think. 


Editorial Disclaimer: The editorial content is not provided or commissioned by the credit card issuers. Opinions expressed here are author’s alone, not those of the credit card issuers, and have not been reviewed, approved or otherwise endorsed by the credit card issuers.

The comments section below is not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved, or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all questions are answered.

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4 COMMENTS

  1. Hmm, 529 plans and IRAs are included in the calculation for the higher tiers.

    If you have $100k total to play with, this could become the One Card You Use.

  2. Just applied and got approved today. I’m a preferred BoA customer and therefore would benefit 50% additional points. I been using Barclay Arrival+ for over 4 years now. In last year I’ve been able to get a total of $1400 of travel credit. Yes I do charge everything (almost) on my card. However, $1400 is at least one international ticket in high season. I believe that BOA card is a better option especially for someone that is already a BoA client.

  3. But you also have to consider the opportunity cost of the $100k. They pay almost nothing on savings compared to 1.2% at Ally. On $100k that’s $1,200 difference. So only worth it if you have $100k in stocks/mutual funds to park in a brokerage account, and if their stock fees aren’t bad.

    It’s a lot simpler to use the Alliant cash back card which gets 2.5% on all spend (3% first year).

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